Finance as a Service (FaaS) is quickly becoming one of the most popular ways for Professional Service firms to save money. Professional Services organizations, such as Marketing & Advertising, Business Consulting, Educational Services and Wellness & Healthcare can use FaaS to eliminate the need for costly in-house technical staff while still having access to all the benefits of these services.
The following article will discuss what FaaS are and how they work, along with some of their key benefits.
What Is Finance as a Service?
Finance as a Service (FaaS) is a type of agile service delivery model. It makes use of the best finance operation management practices by leveraging some of the most advanced technologies. These include things such as Artificial Intelligence, Machine Learning, cloud computing, automation, and more.
The Professional Service industry has grown by leaps and bounds in recent years. This is because it provides a wide range of services that are valuable to many organizations, including but not limited to marketing & advertising, business consulting, education service and health & wellness to name just a few.
Organizations are grappling with the challenges of high operational costs and low margins. This is causing some to move away from product development and focus on services only to compensate for this challenging business climate that they are facing.
Finance as a Service (FaaS) offers Professional Services organizations the opportunity to grow their business while reducing operational costs and increasing margins through automation, increased scalability, cost savings, and more.
The Benefits of FaaS for Professional Service Firms
Partnering with outsourced finance and accounting service providers creates tangible benefits for companies and intangible benefits for business owners. FaaS can help those in the Professional Service sector by providing benefits like cost savings, scalability, financial visibility, CFO assistance, and more.
One of the most apparent benefits of FaaS is in terms of cost savings. Professional service firms are all about delivering a high-quality product. But to do this, they need to invest in their people and infrastructure. FaaS helps these companies spend less on the finance & accounting department by outsourcing back-office functions such as processing accounts receivable, accounts payable, and utilizing enterprise-grade finance & accounting software.
Cost savings come about via multiple processes that FaaS can provide. Among these, we can include things such as:
- Automating many manual and repetitive processes.
- FaaS providers can customize and address their clients’ unique needs, determining the best processes to tackle their needs.
- Increased financial reporting capabilities.
- FaaS providers also have trained and skilled finance experts that their clients can leverage.
When companies don’t have a CFO, they’re always left without actionable financial reports and analytics. In simpler terms – without better reports or data, the business can be difficult to maintain, let alone grow and expand.
This also enables businesses to understand the financial health of their company, which is used to make better decisions for business needs. Organizations in the professional service sector will feel a sense of relief when they use a Finance as a Service provider. With these providers, companies can benefit from enterprise-level finance software that allows an organization to save time and engage with data and reporting for better understanding.
FaaS providers are structured for specific tasks and provide the right level of resource accordingly. FaaS providers can jump in and help quickly, allowing your company to be more scalable (having a higher capacity) than it would be with an in-house department.
Finance as a Service helps streamline scalability by providing the resources and tools necessary to operate your Professional Service business. FaaS providers help you avoid understaffing or overstaffing, which can lead to unnecessary costs.
The benefits of scalability include being able to accommodate new opportunities quickly as they arise without having any significant setbacks in other areas of your Professional Service company.
FaaS can provide CFO assistance to Professional Service organizations. Many Professional Services firms are structured in such a way that there is no one person with the primary responsibility for financial management and operations, which often leads to what we call “spreadsheet hell” or lack of focus on numbers. There may be several people managing spreadsheets because they don’t have time to do it themselves or nobody wants all the overhead involved with being responsible for accounting and other complex tasks like reporting.
This means that many Professional Services organizations miss out on opportunities when it comes to financial visibility, risk analysis, cost control, etc., without realizing any benefit from their analytics efforts – both financially and operationally speaking.
In contrast, FaaS service providers can assist by providing Professional Service organizations with the information they need to make critical decisions. Professional Services organizations that outsource their Finance as a Service will benefit from improved financial visibility, reduced risk of financial penalties due to missed deadlines, and lower costs required for IT infrastructure maintenance.
Finance as a Service enables companies engaged in the professional service industry to save money, manage finances better, and more. Consider Consero for CFO support – an expert financial advisor who can help provide advice on your expenses.
The FaaS model is appealing for many service providers because it reduces repetitive tasks, freeing up time and resources to focus on the data. A CFO provides perspective and helps you focus on the growth of your business.
Increased Financial Visibility
When using paper-based systems and collecting their data in spreadsheets, professional service organizations set themselves up for all sorts of human errors and time-consuming tasks. The result is often a lack of visibility into the organization’s financial performance.
Professional service organizations can use FaaS solutions to make their business more efficient by automating back-office operations, providing better tools and reports for managing finances, and decreasing time spent on data entry.
Professional services providers can access real-time reporting without paying for expensive subscriptions or hiring staff members with extensive IT experience.
The FaaS model facilitates a clear view of the future and present-day challenges offered by easy-to-read reports. Improved financial visibility will help companies by:
- Providing a bird’s eye view over cash flow and current financial position.
- Tracking ongoing account profitability and customer acquisition costs.
- Demonstrate performance gains to potential investors.
- Identify errors and potential fraud faster.
- Better utilize your current and future investment capabilities to make better financial decisions.
- Evaluate service lines in real-time.
With a bird’ eye view of your company’s performance, you can better mitigate risks and future-proof your strategy. With financial visibility to ensure all data is connected, you’ll be able to zoom in on the details as well.
Otherwise, depending on data stored in multiple disconnected systems prevents you from getting a view of unified information, which is crucial for making decisive decisions.
CEOs of Professional Service organizations usually bring business decisions without seeing what is happening across the entire business. Better financial visibility is vital in understanding and managing the organization’s progress better. As a result, they are less successful than companies with employees who can offer support, such as Finance as a Service (FaaS).
Finance as a Service can help Professional Services firms and account for their operations more quickly. This is because FaaS eliminates the need to manually input data, which speeds up processes that typically take hours or days by reducing them down to minutes or seconds.
Financial visibility of transactions in real-time allows Professional Services firms to adjust pricing models on the fly with increased accuracy, making it easier for clients to predict what they will be charged in any given scenario.
Professional Services companies can focus on developing new services rather than spending valuable resources worrying about reconciling invoices and payments from providers who charge hourly rates, etcetera.
When it comes to a company’s problems in finance and accounting, they often follow the same procedure – looking for an organization that researches systems and then picks one that fits their needs best. Next, they configure the system and implement it. This process takes longer to complete because most organizations need 18-24 months to optimize their finance function. One of the leading challenges that Professional Service organizations face is time management. They need to dedicate a lot of time and energy to get their systems up to date, which takes away from managing daily operations and provides less time for core functions.
The FaaS model is perfect for finance teams looking to spend less and get going faster. With the FaaS solution, in 60 days or less, you can:
- Optimize your finance function more cost-effectively than with an in-house department.
- Save time upfront as well as long-term time spent on business growth initiatives.
- Get access to resources like tax experienced CFOs, FP&A experts, controllers, and more to see a #1 differentiator from our competitors.
Increase Efficiency and Reduce Fraud
In a company growing in size, trying to stay productive and accurate using paper-based or excel-driven workflows while maintaining control over everything can be challenging. Fraud and error-prone manual input by staff is a significant risk. Instead of spending their time on value-adding activities, they waste their time undertaking manual tasks that result in errors.
By integrating financial management systems, FaaS offers help with tasks such as reducing duplicated listings and repetitive actions.
A consolidated financial platform that unifies all your data and eliminates paper-based processes will improve financial reporting, expedite collections, and reduce the chance of fraud. Furthermore, segregated duties and critical performance metrics are supported by integrated financial management, which leaves your staff with more time to focus on their core tasks.
Finance as a Service can provide plenty of benefits to Professional Service organizations that use them. Professional Services organizations that use FaaS can lower their costs, provide scalability and financial visibility to make the decision-making process easier for CFOs, and receive assistance from a qualified professional in finance.
FaaS is also flexible and provides more control over finances than traditional accounting systems. Professional service firms can spend less time on administrative tasks thanks to Finance as a Service. They eliminate the need for manual data entry, work cycle delays caused by waiting for accounts payable or payroll department approvals, and any other variables which lead to lost productivity hours spent on compliance issues related to bookkeeping.