Finance and Accounting

Beyond outsourced accounting: How “finance as a service” provides decision-driving insight for CEOs

The finance function in a business involves a multitude of activities like bookkeeping, procure to pay, accounts payable, accounts receivable, etc. Outsourcing some of these tasks like bookkeeping, etc., is a common practice among finance companies or finance departments within organisations. 

However, the CFO's office has a lot more to handle and this raises tactical challenges!

Some of these include:

• Recruiting, onboarding, and training the right professionals.
• Identifying and leveraging the best technologies for finance and accounting services.
• Assimilating data from disparate sources.
• Limited access to real-time data.
• Limited capabilities of on-premise systems.
• Lacunae in data analysis and forecasting.
• Slow and error-prone processes.
• Managing frauds.
• Operational inefficiencies.

The good news is that CFOs do not have to deal with all these problems on their own! Enter (FaaS) finance-as-a-service!

Businesses now have the option to strategically outsource their finance and accounting departments to a third party while maintaining a core finance team. Finance-as-a-Service firms leverage advanced cloud software, and scalable systems alongside standardised operating procedures to provide customised finance and accounting services. 

FaaS is a futuristic model that deploys robust financial operations management and advanced technologies like cloud-based ERPs, AI (Artificial Intelligence), ML (Machine Learning), etc.

Features of finance-as-a-service model

• Unifies data from disparate sources to provide a single source of truth that can be accessed by all stakeholders facilitating better collaboration and reducing delays.
• Provides real-time financial data and insights that help improve cash flow, forecasting, planning, and financial management.
• Cloud-based ERP makes data accessible from remote locations. Cloud-based systems can respond quickly to the changing needs of businesses. Hence, they make finance and accounting more agile.
• Despite the ERP licensing cost, FaaS models reduce the fixed finance operating costs. 
• Features like subscription-based pricing coupled with the flexibility to ramp up/down according to variations in business needs, make FaaS a scalable solution.
• FaaS eliminates technological and process barriers to provide better control and governance, reporting, and innovation.
• FaaS models deploy cutting-edge technologies to provide customised solutions that boost the efficacy of finance and accounting.

Key technologies deployed in FaaS models

Cloud

Cloud computing facilitates data storage without on-premise IT infrastructure. This technology hosts automation solutions because back-end processes and functionalities do not require on-premise infrastructure. Cloud services can be accessed 24/7 from remote locations. It also maintains data privacy.

RPA (robotic process automation)

RPA bots take over rule-based financial tasks like journal entry, reconciliation, etc. They can be scheduled to function according to the needs of the business. These bots deliver error-free results without missing deadlines.

AI (artificial intelligence)

AI and its subsets like ML and (NLP) Natural Language Processing make automation intelligent. AI can analyse structured and unstructured data to provide valuable insights. ML algorithms streamline financial forecasting. NLP can gather and understand human language. It extracts data from voice sources, processes it, and provides it to RPA bots. RPA bots generate financial reports, P&L statements, tax reports, etc., based on the inputs provided by NLP.

Document automation tools

Document automation tools deploy OCR (Optical Character Recognition) technology to create electronic documents like invoice issuance in accounts payable, tax filings, etc. Document automation software extracts sales data from ERP systems like CRM, order management systems, etc. It can create invoices in real time.

Blockchain

Blockchain decentralises finance by offering a distributed ledger system for recording financial transactions. It enhances transparency and security of data thereby reducing instances of fraud.

In addition to these, there are several other digital technologies like process mining tools, orchestrators, and workload automation tools that power finance as a service.

How does FaaS provide decision-making insights to CFOs?

FaaS service providers help businesses determine, monitor, and disclose financial and non-financial insights for all stakeholders. FaaS services provide CFOs insights and services that support compliance and evolving financial requirements. They offer transparent financial systems to support better decision-making. They deploy financial data analytics tools to foster innovation.

Working with a FaaS service provider helps your business meet changing market conditions, demands for greater transparency, and changing regulatory needs. 

The role of the CFO has evolved in the past few years, it has become more strategic. Their in-depth knowledge of the financial management of the business helps them provide support to CEOs, boards of directors, and management teams. Finance and accounting insights foster better decision-making to enhance business outcomes.

How can Infosys BPM help?

Infosys BPM provides end-to-end finance and accounting services that can be tailored according to the specific needs of your business. Our state-of-the-art solutions leverage cloud computing and deploy the latest technologies to offer scalable finance and accounting services.