Finance and Accounting
Addressing Key Challenges in Outsourcing Accounting Functions with Proven Strategies for Success
The outsourcing of accounting processes is no longer the exclusive purview of large multinational corporations. The last few years have seen a growing number of small and medium-sized businesses opting to hand bookkeeping duties over to third-party accounting service providers. Modern technology has made it possible for specialised third-party vendors to deliver financial services in an efficient and streamlined manner. This is encouraging more and more business owners to optimise their bookkeeping operations by partnering with a reputable account outsourcing service provider.
Widespread digitisation and the advent of technologies such as cloud computing, automation, and AI have made it extremely convenient and cost-effective for organisations of all sizes to outsource accounting functions and processes. Other benefits of using financial outsourcing solutions include access to a team of highly trained accountants at a fraction of the cost of hiring in-house financial professionals, reduced chances of non-compliance, and better protection against fraudulent activity. While the advantages of outsourcing accounting functions are evident, certain concerns must be addressed to get the most out of your financial outsourcing solution. We have highlighted below a few common accounting outsourcing challenges and suggested strategies for overcoming them.
Lack of uniformity across processes
Not having properly structured processes in place with transparent KPIs to work towards can severely disrupt your workflow and lead to issues with productivity. It can also make it harder to accurately assess the accounting outsourcing service provider’s long-term effectiveness.
Overcoming this challenge is simply a matter of doing your due diligence when selecting a partner to handle your bookkeeping duties. Ensure that the processes they use are up-to-date and properly structured, and look into how they standardise
routine tasks. It's wise to address small issues early before they grow and to monitor KPIs to ensure you consistently receive what you paid for.
Inability to deliver the expected results
It is possible that you aren’t experiencing the cost savings, support, and streamlined accounting processes that you were expecting. This situation can be extremely frustrating and make the entire outsourcing exercise seem like a futile waste of time and resources.
An excellent way around this challenge is to clearly convey your specific requirements to prospective vendors long before you engage a partner. Once you have established the scope of your requirements and made clear which functions will remain in-house and which functions need to be handled by the third party, selecting the most compatible vendor becomes a lot easier. If you have already engaged an account outsourcing services provider but aren’t completely happy with how they are handling your finances, it may be time to consider reviewing your arrangement.
Data security risks
Accounting firms manage a large amount of sensitive financial information, which can raise valid concerns about data security. A breach can irrevocably damage an organisation’s reputation.
Data security concerns can be laid to rest by choosing to work with an accounting outsourcing service provider that has stringent confidentiality protocols in place. Include comprehensive non-disclosure agreements in your agreement and employ encrypted data-sharing protocols that are extremely secure. Most prominent third-party accounting services will implement various modern data security measures to keep your sensitive data secure from unauthorised access or any other type of misuse.
Inconsistent quality of work
Maintaining a consistent standard in outsourced work is essential for any third-party service provider, and this is even more important for accounting firms that handle sensitive financial information for their clients. Inconsistencies in the services delivered can have expensive repercussions and, hence, must be avoided at all costs.
The only way to address quality control issues with an account outsourcing service is to have a rigorous quality control process in place. This includes establishing acceptable quality standards, scheduling audits on a regular basis, and maintaining open lines of communication with the vendor to issue specific instructions. By taking these steps it becomes possible to ensure that your service provider consistently meets your expected quality standards.
How can Infosys BPM help?
Selecting the right accounting outsourcing service to manage your organisation’s accounting functions and processes is extremely critical, and this is where the suite of Infosys BPM Finance and Accounting Outsourcing Services comes in. This cutting-edge virtual accounting solution offers end-to-end CFO support by harnessing the latest digital technologies to deliver accurate and consistent accounting processes. Reach out to know more about how Infosys BPM can add value to your business.
