Topics: Finance & Accounting Outsourcing

Pay premium for finance & accounting services – 3 perspectives that explain why

Posted on March 30, 2020
Written By QX Global Group

Pay premium for finance & accounting services – 3 perspectives that explain why

The global finance and accounting outsourcing marketing is expected to touch US$16.5 Billion by the year 2025. This figure illustrates that outsourcing the F&A function has become a globally accepted practice.
However, there is a problem and it is a big one.

Amidst the many reputed companies offering F&A services, there are also those companies out to make a quick buck and offer bottom of the battle rates for even the most comprehensive and complex of finance and accounting tasks.

The golden rule of an offer that appears too good to be true is that it isn’t true. The same goes for such companies. So, it is imperative that you only work with reputed companies active in the finance and accounting services domain for a substantial length of time. And for that to happen, you must be prepared to pay a premium for their services. Why? The question can be answered by taking a look at three different perspectives.

1) CFO Perspective

TCS 2020 CFO Study clearly underlines the expected responsibilities of a CFO in the next five years. Transformation is the keyword here, and it’s expected that a significant chunk of capital is invested in digital transformation. The same study states that CFOs need to ensure agility in their processes to become more competitive.

Also, data driven insights will be of critical importance when it comes to forecasting, ascertaining and analysing competitor landscape and strategising to meet customer demands. Advanced finance rears its head in terms of blockchain technology as well, wherein it is regarded as ‘proving ground’ for implementing this technology.

It is imperative that CFOs drive the strategic implementation of technological excellence by digitisation of the more manual, monotonous, yet time intensive F&A tasks. The idea is to get the most out of capital investment and drive strategic growth by leveraging advanced technology. Business critical processes need to be scaled up, secured and made an essential part of the business’s growth objectives.

If you are a CFO and are under pressure to leverage digital transformation and business intelligence to push growth, one of the ways this can be done is working with world-class finance and accounting services companies to outsource your finance and accounting function. With this move, you can access the best of technology and expertise to take care of certain F&A processes.

But outsourcing isn’t enough. You must ensure that the outsourcing partner you are working with is making use of cutting-edge infrastructure and processes to speed up key activities, is able to provide more meaningful data collection and analysis (providing competitive intelligence), and whose processes subscribe to demanding security protocols so that you data is protected at all times.

This means signing up for premium F&A services from a premium services provider.

2) Functional Perspective

The ‘Solving the UK Skills Shortage – Accounting and Finance’ report offers some interesting insights. 51% of the accounting and finance professionals who were surveyed as a part of the study said, they anticipate skills shortage to a moderate extent; and the expertise levels of available candidates is ‘adequate’.

This isn’t good news for the sector and the CFOs we talked about in the above point. If your organisation’s finance and accounting department is understaffed or doesn’t have the right amount of skillsets, you are in trouble. Tasks like accounts payable, accounts receivable, credit control, treasury management, statutory compliance, payroll processing and more, require a fair degree of accuracy and are skills dependent. These are also data intensive and result in the creation of intelligence that offers insights into problem areas and those that require growth focus.

The nature of these tasks, the attention to detail required as well as the need to use diverse software to process these tasks means you cannot work with just any finance and accounting BPO for your needs. You need to work with a BPO that knows the F&A function inside and out and has a history of working with enterprise level businesses, meaning they can offer their services at scale. You must also choose a service provider that leverages its advanced tech infrastructure to take care of your requirements. This results in accuracy, data integrity and faster deliverables. And this comes at a cost.

3) Business Perspective

An outsourced finance department helps you experience a competitive advantage and drives profitability. The key to successful business growth is achieving business growth and controlling overheads at the same time. This is only possible if you are able keep your infrastructure and staffing costs in check. Business critical functions like F&A demand proven skillsets and a substantial investment in digital transformation.

By outsourcing your F&A to a company specialising in finance & accounting services, you can achieve up to 50% savings on accounting operations costs. The money saved can be invested elsewhere in other revenue generation activities. But this is only possible if you are working with a company that has a successful track record of optimally managing outsourced F&A services of an organisation in a way such that it results in process efficiency and fuels sustainable business growth.

To sum up

These are just some of the broad reasons why your organisation must not think about working with an inexperienced finance & accounting BPO company.  If you want high ROI, paying premium for premium services is a big help always.

Originally published Mar 30, 2020 10:03:21, updated Jan 29 2024

Topics: Finance & Accounting Outsourcing

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