FAO, an acronym of Finance and Accounting Outsourcing came as a distinctive trend. Companies facing absence of workforce capability choose FAO as an option to have their internal accounting functions streamlined.
Considering that recruitment of fresh accountants, their training and onboard placement are time-consuming and budget-jeopardizing processes, companies, especially the startups unwilling to prioritize such an alternative, choose FAO as a relatively better option to have their in-house accounting functions handled efficiently.
Not to gainsay that outsourcing has its own pros and cons. However, given the distinctive advantages brought by it, the outsourcing remains a key driver behind standardizing non-core functions of any organization.
The article narrates top 5 reasons for startups that why FAO for them is the best way to go.
1. Efficiency Improvement
In contrast to the popular belief that the key prioritization behind FAO lies in the benefit of attaining cost reduction, FAO, as a matter of fact, is sought by companies for efficiency improvement in their non-core accounting functions.
In a survey conducted by Ovum of 150 large organizations from Canada, US and UK came surprising revelation that driving efficiency is the key reason behind companies externalizing non-core processes (some or whole processes).
This signifies that startup companies, unable to afford exorbitant recruitment, go for FAO.
2. Standard and Simplified F&A
A startup company faces the pressing need of standardizing and simplifying their F&A processes in order to mitigate the cycle time of closing books and to improve financial processes, essential to fulfill regulatory compliances. Also if you outsource more than one function, you not only get the transaction component value improved, but also help your company garner the benefit of cash on-hand together with streamlining internal F&A processes.
3. Cost Reduction
It goes without saying that startup companies wade through issues on the front of budget, which is why we witness calculated and spend-thrift approach in their way to implement a strategy in the interest of their business.
When it comes to handling non-core accounting functions, startup companies take a calculated risk regarding financial investment. FAO stands the best alternative in their strategy of saving costs on staffing and operation. Cost reduction advantage dwells with saving money. Means, FAO doesn’t require you outsourcing whole processes, but rather those portions you can’t handle. Hence, through FAO, you are liable to pay for what you’ve outsourced – nothing more or less.
In this perspective, FAO sounds as a cost-effective approach of saving money.
4. Attention to Core Functions
How many times have you witnessed your internal accounting functions being disrupted? Has one of the disrupted F&A processes cost you time to focus on core functions?
Believe it or not, most startup companies, which do not have requisite workforce to handle their internal F&A processes, prefer to externalize some parts just because they can have enough time to address core functions.
More often than not, overlooking the core functions cost competitive advantages for startup companies.
This may sound a very little enthusiastic benefit as compared to the aforesaid, as a matter of fact, best FAO is regarded by the virtue of its reliability and confidentiality. Perhaps, every organization planning to externalize a part of their internal business activities is doubtful as to whether or not their precious data will be safe in the hands of their outsourcing partners.
Thankfully, outsourcing companies have an uncompromising loyalty tied to the reliability and confidentiality of data of their clients. This has subsequently increased the popularity of FAO.
Additional Reasons behind Choosing FAO:
If you outsource non-core F&A processes to a vendor, you get an access to its vast resource of talent pool ready to serve your needs with satisfaction.
Outsourcing bookkeeping (one of the parts of F&A processes) may drive efficiency in the context of accuracy, standby, expertise, fraud protection and faster turnaround time. Starting and running a business is possibly one of the most crucial things for an entrepreneur. It is time-consuming, stressful, risky, and it has fair chances of eventual debacle. Hence, best strategies are always taken into consideration to minimize the business risks.
For startup companies, externalizing F&A processes is one of the best strategies to save money, get the processes streamlined and to avail quality time for handling core activities, thus minimizing the business risk to a larger extent.
Get to know more about Acelerar’s Business Process Outsourcing (BPO) services.
Contact us to learn how Acelerar can help your company streamline and standardize its operational efficiency through ever-changing BPO.