By: Adolfo Paredes | Business Development Advisor.
We all know that administrative, financial and accounting functions aren’t considered value-generating services for end customers, but they are vital and necessary to company operations. Over the years we’ve seen how outsourcing these functions can positively impact your operations and trigger savings, and we have a few key insights to share regarding when it makes sense to consider this option.
Benefits of BPO for Accounting and Finance
Payroll, AP, AR, financial reporting, bank reconciliation and tax preparation and financial reporting are all outsource-able functions in accounting and finance, with numerous benefits.
• Cost effectiveness. We have saved our clients significant amounts in operational costs, and the savings can then be applied to other areas, particularly core business activities.
• Advanced technology. Keeping up with the latest technology, software and equipment can be a costly investment, so why not leave it with your outsourcing partner? This is a smart way to tap in to cutting edge capabilities without making the cash outlay yourself.
• Accuracy. Check your outsourcing company’s accuracy levels - some can be as high as 99% or above. As specialists in accounting and finance, the right BPOs make the process very efficient (saving you the headache).
• Saves time. Accounting and finance are time-consuming tasks, no matter the size of your business, but outsourcing them can greatly cut down on processing times.
• Quick status reports. Your outsourcing company should be able to provide instant snapshots of all accounting and finance information, allowing you to know the status of the operations and better understand your financial position at any time.
• Expert assistance. With a company that specializes in their field, you’ll benefit from expert service and even consultation and advice when it comes to these all-important functions and how to scale them up or down according to company growth.
When to outsource
These are just a few of the measurable benefits of BPO, but it’s not as easy as just
hiring a company to perform these activities. Today’s executives understand that the benefits of BPO come with some loss of control, and that a certain level of involvement from the team is still necessary in order to maintain a firm grasp on what is going on and make informed decisions.
Accounting and finance are commodity tasks; functions that are easily defined and monitored and readily available from service providers. The next step is to figure out when it makes the most sense to contract them out - when should you start your search for efficient service providers? When should you take the plunge and form those partnerships?
One of the ways we help evaluate the situation is by performing a cost/time analysis, and it usually becomes pretty clear when outsourcing is a viable solution. You may be able to keep your accounting and finance functions in-house with the right software and staff but it takes time and resources to get to that point. It may be far more cost-effective to outsource in the meantime; BPO can be a short or long-term solution depending on your needs - and a tailored plan is necessary for every different client.
A productive outsourcing relationship depends on a number of factors, and we provide consultation to help foster a sustainable connection right from the beginning. You’ll need to consider things like the structure of your BPA agreements and contracts, clear and effective communication with your outsourcing partner and strategic, measurable objectives.
As we’ve seen here, BPO in accounting and finance has uncovered an area of opportunity, as departmental functions such as reporting, analysis and data input are easily transferable to a trusted outsourcing partner. The benefits of BPO are certainly clear, and in a broader sense, BPO provides your team with the flexibility to concentrate on areas that create more direct value to your customer and facilitate growth.