From Bookkeeping to Boardroom: The Evolution of Financial Outsourcing

Outsourced finance and accounting services have evolved dramatically over the years. Where earlier they were only focused on bookkeeping tasks, they have transformed to deliver value throughout the finance and accounting (F&A) lifecycle. Whether it is Order-to-Cash, Procure-to-Pay, Record to Report, Human Resource Support Services, or Digital Transformation, financial services outsourcing delivers labour and cost arbitrage to every accounting activity of the finance department in your organisation.

However, to see outsourcing as a money-saving approach is limiting in nature; you must think of the strategic benefit it brings to the table right from bookkeeping to the boardroom. The boardroom makes various financial decisions that affect the business’s present and future. These decisions include debt planning, annual budgets, capital expenditures, mergers and acquisitions, performance metrics evaluation, compensation definition, regulatory compliance evaluation, and more. Outsourcing has transformed into offering skill sets that can help in many aspects of boardroom decision-making. Let’s dig deeper into this evolution.

Competition Amongst Finance and Accounting Outsourcing Companies

There was a time when there were very few service offerings when it came to providing outsourced finance and accounting services. So, you could only outsource basic finance activities such as bookkeeping. But as demand increased, so did the number of outsourced providers who are now competing with one another by offering an ever-growing portfolio of services that cut across the finance and accounting spectrum, including credit control, accounts receivable, accounts payable, treasury management, audit support, VAT compliance, P2P reporting and much more. This means you can choose from a literal smorgasbord of services that you feel need to be made more efficient and can be strengthened by adding highly qualified talent to your internal team, and that too cost-efficiently.

Leaner Can Definitely be Meaner

Businesses are suffering from a lack of readily available talent. The UK suffers from a shortage of accountants, so you will be hard-pressed to add new and highly skilled accountants to your team to scale it up. Scaling your team will also be expensive because accountants are in great demand, and you must pay handsomely to recruit and retain available talent. The boardroom will ask you to do more with less, stretching your team thin. Moreover, the boardroom expects your accounting team to move beyond regular bookkeeping tasks and harness the power of data to leverage data-driven insights to strengthen the business’s financial footprint. Rather than staying a pure support function, F&A must transform itself into a business growth driver.

You can do much more with a leaner team when you outsource finance and accounting. Your internal team of accountants will no longer scramble to get the job done. Still, it can now move to other strategic tasks such as financial strategy, financial modelling, scenario planning, forecasting, and driving financial transformation. They are now in a position to help the boardroom with data-driven decision-making backed by real-time and insightful financial information.

However, there is yet another element to how outsourcing can meaningfully contribute to the boardroom’s expectations. What if your accounting team lacks the necessary expertise in financial risk management, compliance, financial reporting, financial planning, analysis, and other vital areas of financial management? The answer is financial services outsourcing, which can support your finance and accounting team with its knowledge in these strategic areas.

How Outsourcing Can Help the Boardroom Look Good?

The biggest benefit of outsourcing is getting multiple efficiencies at a lower cost. You can add to your team of accountants without increasing employee overheads, which is a big win for the boardroom. The move contributes to improved cost savings and becomes an essential cog in improved financial performance.

Another significant benefit is that reputed finance and accounting outsourcing companies can help usher in a new digital transformation era in your finance and accounting function. The integration of automation and bleeding-edge technologies, such as AI/ML-accelerated accounting processes, improves accuracy and helps decision-makers harness the power of real-time financial information and reporting to speed up outcomes-focused decision-making; this ensures the boardroom has all the information on hand needed to make impactful financial decisions and holistic financial judgments.

Money Saved Can Be Put to Good Use

The money saved with outsourcing can be invested in different business growth initiatives. Firstly, the CFO can think about investing money saved in technology. It is important to note that technology is evolving fast. You must continuously step up the technology game to stay one step ahead of the competitor. Savings from outsourced finance and accounting services will help you update your accounting tech stack, which enables you to make the finance and accounting process even more robust and efficient. We have discussed a problem that some CFOs can face: the accounting team not having comprehensive expertise in specific strategic tasks vital for the boardroom. The money can also be invested in employee training and development and increasing the recruitment budget (if needed). The decision-makers in the boardroom will appreciate your proactive efforts to improve the F&A framework in the organisation and make it future-proof with the people, process, and platform approach. At the end of the day, this move helps them.

Outsource Finance and Accounting to the Right Firm

So, what do we mean by the right firm? In this case, the right firm, especially when thinking of accruing strategic benefits from outsourcing, doesn’t mean the one with the most affordable rates. It would be best to choose a firm with focused expertise in all areas of finance and accounting, strategic or otherwise, and who can scale your team with people with the most qualified accounting talent. They also must have a proven track record of working with businesses of diverse sizes and requirements in your domain, and they should be able to show the tangible value delivered through their association with a particular company.

QX is helping businesses in the UK centralise their finance and accounting operations and optimise their processes to build a finance Centre of Excellence. We facilitate their finance and accounting transformation through a comprehensive digitization process and more intelligent automation. We are also helping the finance teams to contribute significantly to boardroom decision-making by timely, accurate, and insightful business reporting.

Originally published Jun 06, 2024 05:06:19, updated Jun 18 2024

Topics: Finance and Accounting Outsourcing Services, Finance and Accounting Transformation