Beyond the Basics- Finance and Accounting Outsourcing

Outsourcing your accounting functions to a third party service provider has benefited the businesses in both the short run as well as the long run. Cost saving in the initial phase as well as opportunity to grow in the long run is what outsourcing offers. Accounting outsourcing is being increasingly adopted among multiple small medium firms across countries. It is a growing trend and firms have seen the benefits of outsourcing their accounting. Traditionally accounting functions most commonly outsourced were accounts receivable, accounts payable and general accounting. But a growing trend has been seen in today’s outsourcing market. Businesses are willing to go beyond the traditional outsourcing concepts and moving further in actually outsourcing higher end services. Emerging process trends in finance and accounting outsourcing are financial planning and analysis. This particular branch has been present for the past few years but it is outsourced less frequently as it has not yet penetrated the market compared to the more popular ones. A recent study by Everest Institute suggests that financial planning and analysis has a substantial movement in terms of finance and accounting outsourcing contracts. Another study suggest an interesting trend, outsourcing accounting contracts are slowly and steadily moving towards transactional pricing, however, gainsharing and outcome-based activities are on the increase. Both buyer and provider are working a model whereby services can be priced by transaction, it will allow flexibility for the buyer to have the knowledge that only pays for what it uses, and enables the provider to invest in more scalable, repeatable process workflows that can be developed across multiple clients. Accounting outsourcing in the early days was considered only for large organizations. But now increase amount of interest is seen, particularly from the small-midsized businesses. Studies estimates that, more organizations are now intending to move toward an accounting outsourcing model over the next year, with strong motivation coming from small-midmarket organizations. These are some of the benefits small to midsized entities can enjoy by employing an outsourcing service provider. Some companies may view outsourcing as "giving up control" of a vital part of the business. In fact, it is really a way to gain control by managing the day-to-day operations of the organization and paying someone else to report the numbers. More and more companies are recognizing the need to stay focused on what they do best - their core competency or process. To business entities that means keeping up with what is going on in the organization with the clients, customers and staff. Outsourcing accounting means one less internal function that takes time and resources away from what really determines a company's success. The growing significance of accounting outsourcing is testimony to the significant impact this phenomenon can have on company’s accounting costs and processes. This reason makes it even more important to entrust your work to that outsourcing vendor who guarantees the security, safety, and timely submission of your work.