In today’s highly disrupted and unpredictable business environment, operating a company, be it a startup or a multinational organization, will come with its series of challenges and rewards. Not surprisingly, finance plays a considerable role in all business operations. From monthly accounts payable/receivables to payroll and everything else in between, an optimized accounting operation is needed within every business.
This is why energy, capital, and resources are spent on training staff, investing in the right tools, and employing qualified accounting professionals to manage these tasks effectively. That said, maintaining in-house finance teams can often prove a costly investment, especially when it comes to middle-market and high-growth businesses.
It’s under these circumstances that outsourcing with Finance as a Service (FaaS) has come into existence, providing businesses with flexible solutions capable of fulfilling their specific needs and requirements while also fitting neatly into their budgets. By outsourcing financial operations, companies are avoiding the large costs associated with hiring additional staff and have access to a dedicated team of financial professionals that are perfectly able to handle daily accounting core functions and more intricate financial tasks.
Outsourcing the finance and accounting function to an expert team of professionals will provide a high degree of flexibility when responding to market volatility and when dealing with cash flow management. It also eliminates the additional cost of training an in-house team or spending on expensive accounting or ERP software.
As businesses grow and scale their operations, they will also have to expand their accounting team, which, in turn, leads to more infrastructure and resources being needed to facilitate the extra team members. These increasing costs can, however, be mitigated by using the services of an outsourced provider,
Another benefit of outsourcing the finance function is that it will help reduce the operational and continuity risk, providing more control over other aspects of the business. Moreover, professional outsourcing firms have the necessary experience in financial planning that can perfectly fit into your other business decisions.
What is Finance as a Service?
Financial and accounting services outsourcing allows businesses to transfer their financial tasks to third-party organizations to focus more on core aspects of the business. Outsourcing financial responsibilities is also an effective way of lowering overhead costs, freeing the company from dealing with processes such as recruiting, hiring, onboarding and training accounting service providers.
A third party will take over all of the time-consuming financial activities for a lower price than the total overhead costs of an in-house team. This is precisely what outsourced financial services are all about. It allows business owners and other team members to focus on adding value and growing the business while getting all of the full-scale services of an entire in-house finance department at only a fraction of the price.
But unlike the traditional outsourced accounting services, Finance as a Service (FaaS) goes a step beyond. A FaaS organization leverages standard operating procedures and combines them with scalable systems, and advanced cloud computing with digital workflows. It increases their agility to meet the specific needs of their partners while also providing easy-to-read financial dashboards and statutory and custom reporting capabilities.
What Outsourcing with FaaS Has to Offer
With the recent technological advancements, the traditional way of doing things may not necessarily be the best way of tackling the company’s finances. By outsourcing their accounting tasks, companies will make use of a professional finance team that’s perfectly able to handle all accounting activities, relieving the organization from the drawbacks of having full-time employees while still enjoying the benefits. But what exactly does Finance as a Service have to offer?
- Finance Professionals – As mentioned, businesses that use FaaS will also have a professional team of finance providers that can assist them at any given moment. There is on-demand access to the expertise and experience of the entire team without having to rely solely on a handful of in-house individuals. Additionally, FaaS also allows companies to customize the services they need, allowing them to cover any accounting gaps that they might have.
- Access to the Latest Finance Services and Processes – For those looking to use state-of-the-art systems and processes while also reducing their operational costs, outsourcing services are the way to go. In today’s digital environment, paper-based processes are more of an obstacle than anything else. A professional Finance as a Service provider will be using the right digital tools to eliminate these processes, improving efficiency while also allowing core staff members to focus on more critical business tasks.
- Cutting-edge Technology – Similar to the point above, an outsourced accounting service provider will surely embrace modern software solutions in the form of cloud computing, artificial intelligence, and advanced analytics, among others. These types of accounting software will eliminate the need for any non-integrated digital tools and traditional spreadsheets. Instead, there will be numerous dashboards that will generate easy-to-understand business intelligence in real-time.
- Timely Reporting – Outsourcing providers also means that there will be a dedicated team ready to handle financial reporting. By combining it with integrated systems that track all metrics and key performance indicators, organizations will have immediate insight into the business finances, wherever needed.
The Benefits of Outsourcing Financial Services
Outsourcing with Finance as a Service can bring numerous benefits to the table. The most common of these benefits include the following:
FaaS providers are structured in such a way so they can always allocate the right level of resources to every specific task. By helping companies set up the right systems and streamline their internal controls and processes, FaaS accounting providers can quickly and effectively jump in and help with any accounting activities, allowing the organization to become more scalable in the process.
Many startups and small and medium enterprises (SMEs), don’t have a Chief Financial Officer (CFO). If this is the case, some FaaS providers, such as Consero, can offer CFO support. This is a financial expert who will become part of the company’s team and provide financial guidance. With the FaaS model taking care of many of the repetitive tasks that go into finance and accounting, the company’s financial leadership can focus more on analysis. The CFO comes in to help steer the attention towards the organization’s future growth and provide a more strategic planning trajectory.
Improving Financial Visibility
Spreadsheets and paper-based systems are not only time-consuming but also increase the incidence of human error. As the business grows, leadership needs to gain a bird’s-eye view of the situation on all aspects and segments of the organization. FaaS provides them with financial reporting that presents the current opportunities and challenges facing the company. By improving their financial visibility, companies will better understand their financial situation and better monitor cash flow, make informed business decisions, track their account profitability, monitor customer acquisitions, and more.
FaaS services can bring on significant cost savings to the organization by comparison to an in-house finance department. And as organizations continue to grow, FaaS cost-effectiveness is only expected to increase. It does this by automating many repetitive tasks, reducing errors related to manual entry and providing a big pool of trained and skilled financial experts, among other such cost-effective benefits.
Additionally, the improved reporting capabilities provided by FaaS can drive business growth. This data is used to drive better decisions, eliminate inefficiencies, and take advantage of the opportunities that may arise.
What to Expect from Finance as a Service?
Outdated systems, inefficient processes, and the wrong team can grind any company’s gears, stifling its potential for growth and success. For many new and/or small organizations, their finance and accounting departments can rarely deliver accurate information to provide any clear insight into their performance. Yet, without this data, business leaders can rarely make the right decisions.
Through strategic finance, businesses can maintain their mission for growth and where their decisions have long-term effects. It’s by responding quickly to today’s unpredictable business environment that organizations can hope to remain relevant. And it’s through forward-looking reporting, precise financial data, and a thorough understanding of the right key performance indicators that business leaders can keep their company on the right track. At the same time, they still need to stay on top of more mundane things such as payroll processing, risk management, cash flow management, documentation automation, and more.
This is why finance and accounting outsourcing can prove to be a cost-effective option. Finance as a Service goes beyond simple accounting outsourcing, delivering process automation, advanced integrated technology, strategic CFO guidance, data analysis, and more. Consero offers services that will give an overview of your financial capabilities, enabling you to plan for the long term.