Outsourcing is an invaluable option for companies with budget and manpower constraints that make it hard to handle their finance and accounting processes. Apart from ensuring error-free bookkeeping services, there is a host of other benefits that make outsourcing finance and accounting services appear lucrative.
Building a finance and accounting services firm that is totally unconstrained in meeting the global and cross-functional business requirements is the primary challenge of new age CFOs. Various challenges such as compliance and limited budget, add immense pressure on the resources. Acquiring the right talent and navigating the ever changing market scenarios with a single dimensional strategy can only account for temporary reprieve. Hence, a multiple dimensional operational model that integrates the various factors such as technology, workforce and talent can provide sustained results.
The advent of globalization has led to a surge in the growth of the outsourcing market. While many operational functions are outsourced by organizations, the most common of them include Finance and Accounting services like Payroll, Financial analysis, and Bookkeeping. This is because, in the highly competitive market, companies tend to give more emphasis on finance and accounting outsourcing (FAO), as it helps them in standardizing and streamlining the F&A functions internally and also minimize the costs. Moreover, the complex nature of the accounting processes requires an organization to outsource a substantial part of their F&A operations to leverage maximum benefits. This helps them to save heavily on upfront costs like staffing and infrastructure. Subsequent costs like training and development can also be a drain on capital. Outsourcing helps companies to altogether avoid these expenses and save a considerable amount of operating costs.
The inflexibility in traditional ethos and complexity in regulatory structure being some of the primary reasons, the financial services sector hasn’t been able to fully exploit the growing benefits of social media. But with changing business landscape, the realm of financial services has made a head-way to maximize the role of social media into its integrated operations and services. Having lagged behind other industries for a long time, financial institutions today are looking to utilize social media to gain a competitive advantage, while at the same time trying to mitigate the threats posed by it. The emergence of Financial Technology (FinTech) as a unique industry in itself is a proof of this rejuvenated approach. Finance firms are quickly moving to adopt a strategy that can enhance and optimize their systems and structure to adapt to their social media initiatives. While comprehensive adoption of social media is an ideal way to move forward, financial institutions can categorize their initiatives into the following effective ways, when it comes to leveraging its advantages.
Massive transformations have been the order of the day in the Finance and Accounting (F&A) domain. The dynamics of the marketplace have been altered, such that, there are opportunities galore for all the main players in this arena — Providers and Enterprises. Given the phenomenal manner in which it is impacting the scope of operations, the F&A outsourcing sphere is increasingly viewed as being more than a mere method to reduce costs and risks reduction.
There are many reasons Big Data can no more be considered a mere buzzword, as it has already turned into a business imperative. The huge opportunities it offers to extract value from business-information can no longer be ignored by organizations. For instance, financial services firms can use Big Data tools to create new customer-centric products to grab decisive opportunities in extending market-leadership. They can also analyze their data on customer-behavior to derive the buying patterns, which then can be used to recommend the products and services to the customers, precisely at the right time. Not only can this help the firms to enhance customer experience, but also enable them instigate newer market trends. However, there are many challenges that financial services firms have to cope before they can get to leverage the several Big Data advantages.
The remarkable growth of Information Technology has ensured its impact on every sphere of business. This has compelled organizations to recognize the significance of automation when it comes to achieving growth and expansion. It comes as no surprise then that the domains of Finance and Accounting have also been influenced by automation. This is apparent by the fact that most of the core financial processes have been automated to large extent. Yet, automation has mostly been deployed to the level of transaction-based calculations rather than the whole process of accounting. However, the disruptive technologies are gaining ground and, the evolution of innovative application coupled with the advent of cloud technology is all set to rejuvenate the status quo. We are set to experience a new era in Finance where every component in a financial process, like half-yearly or annual closing, will be sequentially linked with primary tasks like balance sheet, P & L Statement, etc. This will enable total visibility along with seamless control leading to high-levels of accuracy and integrity. When financial operations are streamlined through automation, increasing transactional volumes can be handled more efficiently. Some of the many such affects of automation are discussed below-
Finance and accounting are going through a sea change thanks to advancement in technology and increased the desire for change as expressed by all stakeholders. The field of finance and accounting consumes a huge chunk of time and resources for any company and it literally pays to handle the things in the most optimal fashion.
Small and medium enterprises today are in a much better position thanks to advancement in technology and the rise of globalization. Hence today it is conveniently possible to outsource any particular domain to a competent entity anywhere in the world and gain a definitive business advantage. Finance and accounting outsourcing has caught top management’s fancy at some of the most progressive brands in the world for the sheer amount of value that it can add to the company’s bottom line.