Topics: Back-office Outsourcing Services, Finance & Accounting Outsourcing, Outsourcing, Record-to-report cycle

Ready to Transform Financial Planning & Analysis? Leverage Outsourcing’s Triple Advantage

Posted on September 22, 2023
Written By QX Global Group


Let’s get right down to it. Outsourcing FP&A can help take your business’s financial planning and analysis to the next level. But before we get into how outsourced finance & accounting departments can drive business transformation by maximizing the potential of your FP&A function, it is essential to understand the nitty gritty.

What is Financial Planning and Analysis?

Financial planning and analysis (FP&A), is a process that facilitates accurate planning, forecasting, and budgeting that helps drive the implementation of business decisions and strengthen and secure the financial health of a business. Planning and analysis includes many sub-activities including planning, forecasting, scenario modeling, performance reporting, etc.

While FP&A is a critical component of the more extensive finance and accounting process, there is no doubt that it is the key driving force behind ensuring that the financial health of a business doesn’t suffer because of the business’s growth-centric decision-making and that the company doesn’t just survive but also prospers.

Those organizations that consider planning and analysis an essential finance and accounting activity and lay stress on maximizing its potential are setting the stage for sustainable long-term profitability.

Why is Financial Planning and Analysis Important?

One of the crucial reasons companies are even considering finance and accounting outsourcing is because they realize the huge role it plays in transforming their finance and accounting (F&A) function. Why is this transformation necessary, and how is FP&A a mission-critical arm of F&A?

Businesses, irrespective of size, scale, or scope, need to combat uncertain economic scenarios and the pulls and pressures of the market. If they can address these challenges quickly, they can build a solid advantage over their competitors.

E.g., the businesses’ confidence in the UK economy has plummeted. Two risks business leaders are concerned about include labour shortage, and increased cost of living, directly impacting business sales. If such insights are up for consideration during planning, forecasting, and analysis, it enables businesses to set a financial course that can navigate these challenges and fuel growth despite these trying to act as a barrier.

Today, FP&A is not an option that you can choose or decide not to incorporate as a part of finance and accounting, but it is a necessity and has a huge role to play in determining and meeting growth targets, reducing costs, and making sure the business has enough flexibility to respond to market supply and demand fluctuations.

How Does FP&A Help Businesses?

Let’s look at a five-pointer on the tangible benefits that FP&A delivers:

  1. Informed financial decision-making that segues into better growth-oriented decisions
  2. The ability to gain visibility into how future scenarios can impact financial growth and enable strategic forecasting that helps set better sales targets and offers clarity on revenue generation across a pre-determined timeframe
  3. Exploit new growth opportunities for businesses, whether growing in newer markets or investing in a new service or product line or more, without impacting the bottom line
  4. Improve returns on balance sheets and investment and better business profitability
  5. Better financial compliance, fostering customer and investor trust and confidence

Every business wants to experience these FP&A benefits and ensure they are sustained over the long term. In that case, they need to optimize this process, and in a manner that is easy to maintain and within the prism of cost optimization.

RELATED BLOG: Building a Robust FP&A Process: Best Practices and Key Considerations

What is Financial Planning & Analysis Outsourcing?

The FP&A process is critical for a business, and we have told you why. But the process itself can get repetitive, time consuming and the nature of the process involves a continuous cycle of collecting and analysing data.

Moreover, when your business grows in newer markets and increases its customer bases, the data volume increases proportionally, which demands a bigger team and more time spent on data collection and analysis. Furthermore, the market volatility, evolving regulations, and a rapidly changing market scenario add complexity to the proceedings, calling for even more granular analysis.

Some of the critical steps in the FP&A process include:

  • Data collection, consolidation, and verification
  • Planning and Forecasting
  • Budgeting
  • Performance monitoring and analytics

F&A outsourcing encompasses the entire gamut of financial operations, delegating them to an external team of specialist accountants. On the other hand, outsourced FP&A zeroes in on a strategic partnership with third-party experts. This dedicated team, armed with industry know-how, extracts and delves deep into data from pivotal business functions. Their primary aim? To discern and drive strategic initiatives that amplify business growth. Intriguingly, this specialized approach often proves more cost-efficient than expanding an in-house accounting team solely for FP&A tasks.

What is the Financial Benefit of Financial Analysis Outsourcing?

The word ‘outsourcing’ immediately has people thinking of ‘affordability’. Both are undoubtedly intricately linked to one another, which is why businesses outsource their in-house functions to a third-party services provider.

From the financial analysis perspective, outsourcing helps you benefit from cost arbitrage. It is cheaper to get a particular job done from a third party in the same (maybe) or) in another geography at a much cheaper rate than the same job done in-house. With the pay rate for accountants rising in the UK, outsourcing ensures you can control your overheads and still get a strategic task done without compromising on quality.

RELATED CASE STUDY: Improved financial reporting through process standardisation and consolidated group budget template

Finance and Account Outsourcing – Transforming FP&A

You have to take an important call regarding outsourcing that is whether you want to outsource or not. Finance is a highly strategic business function; within this function, financial planning and analysis are the first among equals when it comes to tasks of strategic importance. The answer to whether you should outsource, lies in how outsourcing can help you drive FP&A and transformation:

1. Leverage Expertise

Your financial planners must keep track of the latest industry trends, economic headwinds, and tailwinds, apart from the intrinsic functional responsibilities, to execute their duties well. For this to happen, they need to be experts in this field, with ideal experience in financial planning and analysis. With the accounting domain facing a severe skills shortage, finding the right talent with perfect industry expertise is challenging. An offshore FP&A team helps you access the right talent with all the skillsets necessary to take care of FP&A and harness its potential to promote seamless business growth.

2. Scalability is a Given

How can you scale your team as and when needed when it is difficult to search for accountants, and they do not come cheap? It’s not just about cost optimization but about adding headcount to your team to meet your business’s growing financial planning needs. Partner with a financial analysis outsourcing provider and this can happen quickly. This scalability is also sustainable and seamless.

3. The Technology Advantage

A respected financial planning & analysis outsourcing provider not only possesses established expertise with the software your company employs, but they might also be using a more updated version of that software. Furthermore, if desired, they can assist in implementing advanced financial planning tools and ensure seamless integration with your current accounting technology infrastructure.

You can also leverage the benefit of advanced technology for FP&A that the financial and accounting outsourcing provider uses, without incurring IT infrastructure costs. When it comes to technology, you get to decide the benefits you think are essential for your business and the F&A function.

Overall, this can introduce more sophisticated analytics, forecasting, and reporting capabilities without your business needing to invest heavily in technology or consultation.

Making the Right Decision with Confidence

With QX Finance and Accounting, you’re choosing a trusted partner to extend your accounting capabilities. QX prioritises data security, adhering to the industry’s strictest standards. Alongside, they offer a comprehensive suite of services designed to optimise your financial planning and analysis functions.

Originally published Sep 22, 2023 07:09:05, updated Jun 20 2024

Topics: Back-office Outsourcing Services, Finance & Accounting Outsourcing, Outsourcing, Record-to-report cycle

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