There is an upward trend of outsourcing in every area of business, supported by an improving economy and rising revenue in the human resource, finance and accounting, customer relations management and insurance sectors. All provide a large portion of BPO business.
In particular, the finance department has become a popular area for outsourcing. According to Consero’s CFO Survey, 79% of investor-backed CFOs report working with a finance and accounting partner. What explains the rise in financial outsourcing?
Compared to building finance departments in-house, outsourcing F&A can offer companies superior software infrastructure, advisory and analytical support and cost effective transactional back office services. All of this can provide companies with more accurate and insightful financial information as well as scalable back office infrastructure to support the growth of the business at a fraction of the cost and time that would be required to build an in-house finance department.
We’ll cover these benefits in-depth as we explore why financial outsourcing is on the rise.
1. Scalability at a Lower Cost Point and in Less Time
Outsourcing your F&A work reduces costs. Many companies have jumped on the bandwagon to outsource basic tasks and take advantage of superior technology and a lower cost global labor pool. F&A tasks are no exception. Through a provider who offers a combination of local high-level resources that liaise with and support the business along with a global back office team, customers are able to get the best of both worlds — local business context and domain expertise at a lower cost. Through established software platforms with workflow automation, companies also receive greater efficiency and scalability without the time and effort of building out their own infrastructure.
Jeff Hotz, CEO of TESTco needed a more structured process in place for roll-ups and reporting. “I like knowing the financial status of my company,” explained Hotz. “But I don’t like to spend time managing all of the invoicing, reconciliations, recording of expenses and so forth.”
Outsourcing with Consero helped TESTCo gain critical reporting around their business while reducing operational costs and improving efficiency.
2. Outsourcing Helps Business Stay on a Fast Track
Managing the day-to-day F&A activities, while trying to gather new insights from financial data to drive business growth is a struggle for every company. The big issue for fast-growth companies is: how to move as quickly as possible from where you are to where you need to be.
An outsourced partner can clear obstacles that would otherwise slow growth and divert your time away from focusing on strategic objectives and executive growth initiatives.
More than 50% of a typical CFO’s time is spent on tactical F&A issues rather than making strategic decisions. By eliminating the need to build out finance infrastructure and people management, CFOs and other Executives can strictly focus on addressing strategic objectives that add value to the business.
3. Obtain Insightful and Accurate Reporting
Companies are prevented from making forward-thinking decisions using financial data because their systems and processes don’t allow them to see the bigger picture.
Manually gathering historical data not only takes time to organize, it also has a short shelf life.
A managed solutions partner can help you understand what leading companies look at to drive their businesses forward and more quickly get you the financial data you need.
Scott Bonnallie, President of Danemiller stated, “I’ve been around long enough to be sure that you don’t know what you think you know regarding product or client profitability until you actually see the financial data. Consero was able to streamline our finance function and provide me with customized, granular client and product level P&Ls that I need to ensure we are making the right decisions as a business.”
The right outsourced partner can also provide KPIs, manage controls and reduce risks, and provide insight into issues ranging from pricing to production—all while assisting with formulating, executing, and supporting high level corporate strategy.
Summary
It is critical to put in place the processes, information and support needed to be able to provide the most effective insight, control and efficiency. More companies are now evaluating managed F&A service solutions as an alternative to the cost, time and headaches of building their own solution to build smarter operations and drive agile growth.
If you’re in need of:
- More insightful and accurate reporting so you can make the best business decisions
- Scalability in your financial operations to quickly and cost effectively support the growth of your company
- A managed finance solution that supports all of your F&A needs while freeing you to focus on strategic initiatives in your business
Consero’s proven Finance as a Service (FaaS) model provides the systems, processes, and people to quickly operationalize your finance function to produce reliable, board-level reporting powered by our AI-enhanced platform.
Our team can also work within your existing system and general ledger through Consero’s FlexFinance service. We manage the back-office F&A function from end-to-end process, including closing the books. When you need skilled talent, we can supplement your F&A team via our FlexResources.
No matter your need or stage of growth, Consero has the flexibility and expertise to meet your needs.
