Finance and Accounting
The fundamentals of F&A outsourcing: A complete guide
Finance and accounting (F&A) is one the most outsourced business functions besides IT services. The main reason is that in several organisations, the finance teams lack access to resources or expertise required to implement digital finance services, which simplify the F&A function. This is true for many small businesses. As a result, 37% of the organisations rely on outsourcing finance and accounting services for their accounting functions.
Questions such as ‘Is F&A outsourcing right for my business?’ ‘What financial services should I outsource?’ or ‘How can I select the right F&A outsourcing partner?’ can make availing of financial outsourcing services daunting. So, if these questions haunt you, here is your complete guide to F&A outsourcing.
Financial outsourcing trends in 2022
The first thing you need to do when deciding whether digital finance solutions outsourcing is the right step for your business is to understand where the industry is heading and the current market trends. Some of the popular F&A outsourcing trends observed this year are:
- Real-time finance and accounting: The F&A industry is gearing towards implementing fully integrated digital accounting solutions. These digital solutions simplify updating financial reports and accounting books with each transaction in real time.
- Secure audit preparation: Audits are integral to the F&A industry. Digital solutions categorise and organise all aspects of an audit function to streamline the process.
- Advanced financial modelling: Technological advancements have made it easier to build accurate financial models that help your organisation avoid surprises or problems.
- Highly-sophisticated automation: Failure to adopt digital financial services or to automate F&A functions can lead to disorganised and slow processes, vulnerability to manual errors, and potential employee burnout. F&A outsourcing can help you harness the power of machine learning and artificial intelligence solutions to eliminate manual processing and automate workflows for better efficiency and accuracy.
- Personalised F&A packages: As more businesses become customer centric, unique F&A needs for each business have started emerging. This customisation approach allows you to pick only the services you need from a host of digital finance services and maximise the accounting team's value. And with access to a global pool of experts, financial outsourcing services are capable of offering customised and personalised F&A packages suitable for your business needs.
Some of the most commonly outsourced F&A functions are:
- Management accounting
- Tax accounting
- Accounting audit
- Forensic accounting
- Financial accounting
- Payroll services
How to choose an F&A outsourcing service provider?
Once you have decided on outsourcing the F&A function, you must follow a checklist that can help you make the right decision:
- Determine the F&A functions to outsource before approaching an outsourcing provider.
- Evaluate your budget — considering how much you can spend, what services you need, and the value the outsourced services will deliver to your business.
- Narrow down the potential outsourcing providers based on available infrastructure, internal controls and security compliance, speed to market, efficiency, and financial reporting capabilities.
- Check the outsourcing provider's reputation and cultural fit with your organisation for better alignment and synergy.
- Work on a trial project to evaluate compatibility, communication, performance, efficiency, and value.
For organisations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed organisational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like living organisms will be imperative for business excellence. A comprehensive yet modular suite of services is doing precisely that. Equipping organisations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organisations that are innovating collaboratively for the future.