Finance and outsourcing accounting was one of the first processes that companies outsourced, and the practice continues to boom: Ed Thomas, an analyst for Ovum research, found the number of F& An outsourcing projects valued at $1 million or more increased in 2012 compared to the year before. outsourcing bookkeeping services and accounting have most important for business growt
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As the market matures, companies contracting for outcomes are exploring fresh ideas and seeking new answers to streamline F&A processes. Expanding outsourcing to new areas of finance and accounting, new industries, and new sizes of companies than in the past
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Bookkeeping Services: Outsourcing Finance And Accounting
Driving efficiency is a high priority for CFOs who want to Bookkeeping service, according to an Ovum study of 150 large companies in the United States, United Kingdom, and Canada. Most survey respondents saw the main strategic aim of the accounting department as delivering efficiencies. That is within the department itself or across the company as a whole
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“This is a wider trend in outsourcing as a whole,” Thomas explains. “Cost reductions are staking companies require what else their outsourcers can do to make their processes run more efficiently.”
The most commonly Outsourcing Accounting are payroll accounting, accounts payable, and accounts receivable. The Ovum study found companies are “moving up the value chain” in the types of F&A functions they outsource
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“Relatively basic transactional processes, such as accounts payable to more strategic functions, like budgets, forecasts, and internal audits. “More than a third of respondents had outsourced internal auditing, which is a high-level function.”
Simplifying and standardizing F&A processes is a key characteristic of well-run companies, and by instilling good F&A processes these companies can achieve a variety of good outcomes—such as more information, more service, and more cash. By simplifying their F&A processes, companies have found they can reduce the cycle it takes to close books, and they can develop better benchmark and baseline financial processes to help them meet regulatory requirements
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Expanding the scope of outsourcing can multiply such benefits, some experts say. “One simple example is accounts payable and receivables,” says Jag Dalal, managing director of thought leadership at the International Association of Outsourcing Professionals (IAOP). “If you outsource only one function, you limit your benefits. If you outsource both, you get value beyond improving the transactional component. The outsourcer can see when cash comes in and goes out. That can help the company take the best advantage of the cash-on-hand and optimize internal processes.”
Companies look to leverage the power of their data, by turning to outsourcers with expertise and technology resources than they have in-house. “An outsourcer is going to have access to the state-of-the-art technology, and experts who use those software packages every day,” says Greg LaFollette, a spokesperson for CPA2Biz
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More and more, companies are looking for end-to-end F&A capabilities from outsourcers. Consider how outsourcing can help a company get a better handle on its pay-to-procure process. Powerful analytics can help a company better understand their spending through the entire supply chain. In order to control budgets and standardize procedures company-wide
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This approach allows companies to identify cost savings through supplier consolidation and duplicate payment analysis. Automating the process can improve policy compliance and reduce order errors by ensuring employees around the world. Order what they need when they need it while enforcing business rules and limits that prevent employees from making mistakes
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While CFOs of large companies are focused on Outsourcing Accounting to improve far-flung global operations, smaller companies, who have typically eschewed outsourcing of F&A, are beginning to embrace it as well. Outsourcers have expanded their offerings to the small- and mid-size company segments and developed solutions targeted toward specific vertical industries
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Expanding the Scope
A recent report from the Association of Chartered Certified Accountants (ACCA) found that companies using F&A outsourcing believe they will reduce costs but lose control. However, as they realize the advantages of quality is rising because benchmarks are being applied to their performance. In the end, the report concludes, companies could see control was improving, too.
“Many companies don’t realize going in that they manage an outsourced provider more stringently than their in-house resources were managed. Dalal says Outsourcing Accounting outcomes are more likely to use clear metrics, such as savings and service-level achievement. That allows a company to have continuous improvement in their accounting and finance operation. The company itself can focus on its core competencies
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