How Finance & Accounting Outsourcing Companies are Looking Beyond Transactional Efficiency

Imagine a conversation between a finance & accounts outsourcing company and a business in the UK five years ago.

“My main objective is to reduce the cost of finance operations and not have to worry about staffing issues. Can you make this happen?” the CFO or the Finance Manager would ask.

How would the F&A outsourcing services provider respond? They will demonstrate their capabilities in service delivery, maybe share a couple of case studies, and show exactly how much money the client can save by outsourcing a specific finance function.

Over the last few years, as the F&A outsourcing services sector matured, cost savings via labour arbitrage became the minimum, obvious outcome. To differentiate themselves from the competition, the tier-1 and tier-2 players in the sector honed their ability to streamline processes, introduce process standardization, and improve transactional efficiency.

As the BPO/KPO sector continues to evolve and grow in response to changing customer expectations and a rapidly evolving technology landscape, these too are now just basic expectations and not differentiators. RPA, intelligent automation and availability of improved data analytics software have expanded the horizons of what’s possible within the industry.

While the key focus remains on reducing the costs and improving productivity gains, the ‘lift-and-shift’ models are giving way to more selective and value added outsourcing engagements. F&A service providers possessing industry expertise, ability to implement technology and introduce process rigour are ruling the roost and often functioning as the de facto centre of expertise for their clients. On the other hand, companies that are unable to adapt to the new reality and that continue to bank on labour arbitrage risk being disrupted into oblivion.

Emerging F&A Outsourcing Trends: Automation Technology and Data Analytics

So, what exactly are SMEs and enterprises looking for in finance & accounting companies? Apart from the cost gains (which in some cases come through robotic arbitrage) and transactional efficiency, companies are leaning on their outsourcing partners to 1) Improve productivity gains and reduces costs using technology and 2) Improve TAT, accuracy and relevancy of reporting.

Digitisation and automation: Outsourcing partners have been helping their clients to move from paper-based processes to digital systems for quite some time now. While this trend continues, companies that have already met their digitisation goals are looking at RPA and other automation technologies to aggressively chase productivity and efficiency improvements.

In response to these rising expectations, mature F&A outsourcing companies are developing industry-specific RPA solutions. Recognising that gains from RPA or intelligent automation technologies come from scaling, the service providers are also learning how to effectively push the solutions across the client’s business.

Reporting and data analytics: Service providers are already helping businesses to improve reporting by standardising reporting, optimising processes, improving the TAT for data collection, and analysing the data. Many providers are taking the next logical step and helping their clients to assess and implement a range of tools for data mining and AI & statistical analysis. By taking this step, the service providers are truly moving up the value chain – from processing centres to the brains of the business.

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In addition to the above, as outsourcing relationships mature, businesses are beginning to rely more and more on the service providers to think innovatively and actively solve problems. In some cases, the offshore teams are strongly integrated with the clients business and play a key role in helping the clients accounting team delivery a better customer experience.

With over a decade of experience in the field, QX is one of the leading F&A outsourcing companies serving business in the UK. If you’d like to learn more about what an outsourcing partner can do for your business, please get in touch with us.

Originally published May 31, 2019 09:05:16, updated Dec 08 2021

Topics: Finance & Accounting BPO