Modern global market is highly competitive whereby companies give finance and accounting outsourcing (FAO) serious prioritization in order to have their internal F&A functions standardized, streamlined and fully functional.
Given that dilatory and inefficient F&A management is contributory to a slow-paced performance growth; accounting outsourcing services are thoughts that most CFOs contemplate. Be it reviewing financial statement, developing operating budgets or cash flow management, they want quality services on lower financial investment from their outsourcing partners in order to materialize remarkable efficiency results in their F&A functions.
So, what is the future for FAO? Will it surge or face an eventual downfall?
The first and foremost thing to understand is the inmost need for CFOs. As a matter of fact, benefits such as notable cost reduction, increased revenue growth and streamlined processes lay firm in the dominating agenda of CFOs together with the insight that externalizing non-core business activities will benefit them with fully functional business structures.
The surge in the number of FAO global-wide signals its bright future, albeit those providing customer-centric, cost-compliant and quality services would stay longer in market.
What Drives Industries To FAO?
There are certain (cliché-ridden) phrases, such as cost reduction, improved process, access to best talent resource, focus on core competencies and faster turnaround time which essentially drive industries to FAO consideration.
1. Cost Reduction
Industries have long attributed imprecise and cost-burgeoning aspects of financial functions to their failure to understand the importance of FAO. To state otherwise, industries believe that if they had externalized accounting processes in the early stage of their business, they would probably have reduced operating costs and improved business productivity level significantly.
2. Efficiency-Driven Results
To say the least, FAO really drives the efficiency and improved business performance to any organization. Due to the increasingly tough outsourcing market worldwide, outsourcing companies face the pressing need to adopt latest technologies and client-satisfaction-centric business strategies. In view of the circumstances, client companies can expect efficiency-driven results for their outsourced projects, as vendors can’t afford the risk of losing clients by providing substandard services.
3. Access to Best Talent Pool
Undoubtedly, if you externalize an accounting process to a vendor, you invariably get an access to vast talent reservoir, effective and useful for your business to scale up. Start-up, small and medium-size organizations usually make a cost-efficient business strategy involving externalization of internal F&A process so as to get their accounting functions streamlined.
4. Faster Turnaround Time
In brief, outsourcing enables an organization to get quality services within the deadline, thus helping it many ways. A client gets service within the deadline as its outsourcing partner has all requisite resources essential to streamline client specified accounting process with faster turnaround time.
5. Focus on Core Competencies
As a rule of thumb, when a client outsources process, it actually gets relieved from the tension of concentrating on that particular project… Thus, it saves ample time to actually focus on its core competencies.
6. Cost Savings
Since accounting processes are too complicated yet very substantial parts within an organization, staffing an entire account department with the new workforce will involve budget-draining recruitment and training processes. To avoid this, an organization outsources entire or part of the whole accounting functions to save a considerable amount on operating costs.
What conclusion we could make out of the aforesaid narrative deduces that FAO doesn’t seem to have any danger of being doomed in future. The only thing that matters in the whole aspect of FAO is the fact that the future will be extremely competitive for companies offering FAO services.