The current economic climate, marked by reduced deal activity, persistent inflation, and general uncertainty, puts pressure on companies to cut costs without sacrificing operational integrity.
Many are urged to “hunker down” and look for ways to conserve cash. Outsourcing, and Consero’s unique Finance as a Service (FaaS) model, are increasingly popular strategic answers to these concerns.
Recent data underscores the critical role outsourcing plays in the overall market. With 44% of businesses outsourcing the finance function, finance is now the 2nd most outsourced function among corporations, only behind IT.
Consero’s own research shows this is even more common in the mid-market, with 79% of investor-backed CFOs working with a third-party finance and accounting partner.
Mike Dansby, former CFO of Consero, has over 35 years of combined CFO and consulting experience in multiple industries, including software, tech, and services. He shares his unique perspective on the value of FaaS, having both provided the service and been a consumer of it.
FaaS vs. The Challenge of Building In-House Finance Teams
Many businesses, especially those with less than $200 million in revenue, struggle to invest in the necessary people, processes, and technology to build and maintain a fully competent in-house finance team. This often leads to relying on the “heroic efforts” of a few individuals.
Finance as a Service (FaaS) is an outsourced model in which Consero integrates people, processes, and technology into a turnkey solution, handling everything from transactional accounting and technology implementation to higher-level financial analysis.
This approach is gaining traction, particularly among small to mid-sized businesses that aim to reduce overhead costs while strengthening their financial operations. FaaS can be a quicker and more efficient way to execute a finance transformation project, compared to the months or even years it might take for a company to do it themselves.
Companies often see 20-50% cost savings by leveraging a FaaS model compared to building a comparable internal finance team.
Implementing mid-market ERP systems internally typically costs six figures or more, whereas FaaS often has lower up-front fees (e.g., $30,000 for a full implementation).
The Impact of Economic Downturns
The current economic climate is marked by challenges such as bank failures, a decrease in PE deals, and investors advising companies to conserve cash.
While some macroeconomic statistics like unemployment rates may not fully reflect these challenges, many companies are feeling the pressure to cut costs.
As Dansby notes, “PE deals are down 60% over the previous year…and I suspect a lot of our investors are telling us to hunker down, conserve cash.”
While this environment won’t last forever, FaaS helps businesses that are trying to go to market, or secure additional investment, stay lean while also remaining prepared for growth opportunities.
Key Takeaways:
- Private equity (PE) deals have dropped by 60% over the previous year.
- Companies face mounting challenges—bank failures, inflation, and conservative investor sentiment.
- FaaS helps organizations remain audit-ready and prepared for sudden shifts, including financing or M&A.
In a $10 billion company, better finance practices can save $51 million, which is about 0.5% of EBITDA—a figure with significant implications for company valuations.
The Rise of FaaS
The rise in outsourced finance is partly driven by larger companies outsourcing their internal finance groups to create captive shared service groups, often offshore.
Smaller companies, especially those under $500 million in revenue, often struggle to invest in their own captive outsourcing, which is where Consero comes into play.
Consero offers technology and process investments, as well as staff management, which can save companies time and allow them to focus on their core business.
Turn Your F&A Department into a Strategic Growth Engine
Get the playbook we use to help hundreds of growing businesses streamline their back-office.
Schedule Consultation
Cost Efficiencies and Improved Performance
In the current economic environment, companies are looking to cut costs, particularly in administrative areas.
As Dansby observes, “in this environment companies are looking where they can cut. (They) don’t want to cut core capabilities, sales, or development. So they’re going to come looking to the admin side of the house.”
FaaS isn’t simply outsourced bookkeeping. It is a holistic approach encompassing technology (e.g., ERP systems), operational accounting (AP, AR, payroll, etc.), and higher-level financial roles (controller, CFO, FP&A) for a robust and efficient finance solution.
“FaaS is more than just sending accounting out to a bookkeeper…it’s robust, mid-market ERP, a full set of processes, and a dedicated team,” notes Dansby.
FaaS Benefits:
- Technology & Automation: Cloud-based ERP platforms (like Sage Intacct) allow fast, repeatable deployments.
- Transaction Processing & Controller Support: Ensures accurate monthly closes, reconciled balance sheets, and consistent compliance.
- Fractional CFO & FP&A: Provides high-level financial strategy without hiring a full-time resource.
- Scalability: FaaS teams absorb growing transaction volumes without forcing companies to staff up in large, costly increments.
Some FaaS providers process tens of thousands of transactions per month for multiple clients, allowing economies of scale and a fractional resource model for specialized roles.
Hackett Group estimates a half-percent of EBITDA can be saved by optimizing the finance function—potentially adding millions of dollars to a company’s valuation.
Real-World Examples and Case Studies
Many organizations across technology, healthcare, and other service-oriented industries leverage FaaS for speed, efficiency, and cost-effectiveness.
Dansby reviewed several case studies that demonstrate the model’s transformative impact.
Case Study Highlights:
Software Company (100M+ Revenue)
- Migrated off a poorly implemented system
- Gained robust accounting support and timely financial statements
- Kept costs lower than hiring an in-house team
Multi-Location Healthcare Enterprise
- Saw a one-third reduction in finance costs
- Achieved a fast ERP implementation (~$30,000 vs. typical six-figure cost)
- Prepared for an exit smoothly, impressing investors during due diligence
High-Growth Tech Firm
- Employed fractional CFO services for M&A readiness
- Smoothly handled acquisitions without building a large internal team
Dansby recalls, “We basically saved (the healthcare company) one-third…and we were very integral to that exit process…we always show well in due diligence.”
- One CFO reported that switching to FaaS allowed his company to finish an overdue audit and secure crucial bank financing in only three months—far faster than an internal re-build.
- Another company canceled a five-year paid-up software licensing agreement because FaaS was more attractive despite that sunk cost.
Best Practices for a Successful FaaS Partnership
Even though FaaS providers manage day-to-day tasks and implement proven processes, the client’s involvement, particularly during onboarding, is crucial to lasting success.
- Embrace Partnership: Treat the outsourced finance team as a true extension of your business, not just another vendor.
- Invest in Onboarding: Set aside enough time in the first 2–3 months to align on goals, processes, and reporting needs.
- Maintain Engagement: Regular check-ins, sharing company updates, and providing relevant context help the FaaS team deliver quality results more efficiently.
- Recognize Scalability: Expand resources fractionally rather than hire entire in-house teams whenever your transaction volume grows.
Dansby summarizes, “What I’ve seen is…the ones that are really good…treat their [FaaS] team as their own and not just some other vendor.”
Embracing FaaS for Finance Transformation
FaaS offers a streamlined, cost-efficient way to achieve sophisticated finance operations without the burdens of a large, in-house staff.
Consero’s model leverages technology and automation to improve efficiency. This includes using RPA, machine learning for analytics, and efficient workflows for data and report management. These technologies can save companies time and resources, as most companies do not invest in these tools themselves.
“Smaller companies aren’t going to make big investments in financial technology, whereas we’re able to leverage these investments over all of our client base. We’re going to automate the processes through RPA, we’ve brought machine learning to our analytics, going through monthly variance analysis.
“It cuts a lot of the time out of what it takes to go and put that type of analysis together. We have our workflows and we can move data around and move reports around in a pretty efficient manner.”
Navigating Uncertainty
Especially in navigating economic uncertainty—when companies must stay lean yet high-performing—turning to FaaS can offer transformative results and position organizations for growth or eventual exits.
- Cost savings free up resources for R&D, sales, or other core competencies.
- Being audit-ready and due-diligence-ready at all times becomes simpler with standardized, repeatable processes.
- Businesses can tap specialized expertise (CFO support, FP&A, M&A support) on a fractional basis instead of paying for full-time hires.
“Tough economic environments require top performance from your Finance function…implementing FaaS can lower your costs significantly and improve performance.”
By integrating people, processes, and technology through Finance as a Service, organizations can reduce expenses, stay agile, and be fully prepared for audits, fundraising, or exits—critical advantages in today’s turbulent economy.
Request a consultation with our team to explore customized solutions for your needs.
