Trends in Outsourcing Financial Decisions

 

As your business grows, so too does the need for resources to manage that growth.  Often when the workload exceeds the capabilities of current resources, companies look to outsource work.  This is nothing new.  Companies have been outsourcing customer-support services and marketing for decades, but increasingly, businesses are outsourcing their most trusted and central departments in order to cut costs while increasing business quality.

The finance department is a critical part of any business.  It determines the financial health, stability and future decisions in a company, providing up to date reports, analysis, accounting information and tax files.

But establishing a full finance department can be time consuming and expensive. For businesses operating on a shoestring budget, it might be hard to find the required resources to set up a new department, and it might be time to consider outsourcing.

The first few years of business are the most crucial, and financial mistakes when venturing into new markets are common.  Outsourcing companies such as TempCFO’s outsourced CFO do not just compile reports and file taxes but ensure companies achieve financial success and independence. There is a lot to gain from an outsourcing company, including helping to create and formulate business plans, procedures, policies and financial relationships. CFOs will take care of internal and external audits as well as help in soliciting funds. Here are some of the emerging trends in the field:

Demand for virtual CFO services will rise

Because of the need to cut down costs, companies will shift from hiring a full time chief financial officer and outsource the work to reputable persons with accreditations fitting the position. This will bring in the experience, skills, and authority required to carry out the accounting responsibilities and at the same time cost much less than hiring permanent staff to occupy the position.

Outsourcing entire financial functions

This trend will see companies scrapping the financial department altogether. The outsourced company will handle all money related decisions and transactions from billing, payments, records and filing taxes. This is important because companies can get professional financial services and at the same time not have to worry about getting qualified workers to accomplish the tasks.

On the same note, financial decisions are sometimes hard to make. This can consume much of the company’s time and energy. When companies do not have to get involved with money decisions, they have more time to deal with other needs in the company.

Note that marketing and production are vital areas that need a lot of attention, as does customer care. It is crucial that you take care of the areas of the business that are generating income. These are the lifeline of the company. For instance, ensuring the clients’ needs are met and service delivery improved will not only retain the existing clientele but will also attract new ones.

Outsourcing Complex Functions

Many companies will shift their complex functions to more experienced firms. This will improve the quality of financial decisions and results. This means that firms will only employ staff to handle simple, recurring tasks such as billing and making payments. Anything the company deems too complicated will be outsourced.

Evolution of Cost Saving Modules

One of the roles of a CFO is checking and suggesting ways that can reduce the cost of production and overall expenditure in the company. Establishments will not just want to outsource the financial responsibilities but will want to work with a firm or CFO who will make the experience better, cheaper and manageable. This means that CFOs will need to concentrate on better service delivery, faster processes, elimination of unwanted processes, reduce production costs and in general, transform businesses.

To motivate CFOs, companies can share the gains with them that are as a result of their effort in cutting down costs. To achieve this, CFO’s and the outsourced companies should go beyond their typical responsibilities to pave the way for business transformation. They have to understand the outsourcing companies in depth, get to know their operations, and production costs. This way, they will establish ways to cut down costs, unnecessary processes and get cheaper but quality products including raw materials.

Automation and Standardization of Processes

For companies with multiple branches, managing finances gets complicated leading to errors, increased management costs, and vague results. Outsourcing companies will help standardize all the accounting processes, including consolidating all the information and managing the operations from one central place. This will reduce costs because there will not be a need for a complicated accounting process or multiple accounting units. Managing the finances and accounting information will be easier, which will also reduce errors.

Future trends will also see more companies moving towards automation and cloud financial solutions. These platforms will be cheaper and easier to operate and can be managed remotely.

Demand for Detailed Managed Services

Business Process Utility will grow in demand because of the need for detailed managed services such as reconciliation and invoicing, which require BPU. These services require skilled and sophisticated technology to enable automation. With BPU, human managed and supervised processes will not be necessary.

Other than cost reduction and a chance to have experts handle your financial issues, outsourcing has other benefits. As an establishment, you will stay focused on the vision, spend less time processing financial information and have more accurate reports and insights.

In the end, companies benefit more when they bring in an outsourcing company. They are less likely to make financial mistakes or wrong economic predictions. They can have the right products for their market at the right time. This will lead to business growth and expansion. In fact, future trends will demand that companies seek advice from outsourcing companies before making any financial move.

With this in mind, the big task will be getting CFOs who will be passionate, enthusiastic, well informed and ready to learn your business operations, mission and goals in order to give the right insights and solutions. Make sure your business spends enough time with the outsourcing company or CFO informing them of the fine details and letting them familiarize with the business operations before they undertake any project.

 

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