It May Be Time to Consider Outsourcing Finance in your companyEmma
What would you do in your business if you had more time?
It’s a thought that business owners daydream about. Many business owners have, in their quest to create more time for themselves, been lured by the idea of outsourcing. The Businessdictionary.com defines outsourcing in the following way:
“The contracting or sub-contracting of noncore activities to free up cash, personnel, time and facilities for activities in which a company holds a competitive advantage.”
What is the most productive way in which you and your staff members could be spending their time, if they didn’t have to spend an obligatory portion doing admin and other non-core activities? Would you be selling, strategizing, chasing a growth target?
If you have answers to any of these questions, then you might consider outsourcing finance in your company. Doing so could save (or earn) you money.
“Companies having strengths in other areas may contract out [certain aspects] of their business to concentrate on what they do best and thus reduce average unit cost”, says businessdictionary.com.
The outsourcing sector is becoming more and more prolific. At the same time, it is becoming more complex than ever before. According to globalizationx.com, several factors are playing into this. They include globalization, the consolidation of companies, supply chains and functions, and conversely, the diversification of various industries.
“Traditional outsourcing models are crumbling more quickly than we could have anticipated,” says globalisationx. Gone are the days of appointing a large, disconnected and separate institution to fulfill in-house accounting duties. Instead, companies are outsourcing finance to niche finance houses which specialize in responding to particular financial needs. The overall trends of outsourcing finance are also evolving at the same time. Some of the current outsourcing trends, according to globalisationx, are as follows:
The Managed services model: This model is one popular way of outsourcing finance. The outsourced service is managed and monitored by an external source, or alternately by a manager in-house. This approach allows the alignment of business strategies with the goal of the outsourced service. “As firms mature their outsourcing strategies, they are evolving their relationships with service providers beyond the traditional client-vendor relationship to that of a business partnership,” says globalisationx.
And the way in which the success of the outsourcing finance partnership is measured has changed as well. “Effectiveness of sourcing relationships is now increasingly measured by its impact on overall business related outcomes and not just on cost or efficiency improvements.” In other words, how strong is the relationship that binds the company with its outsource partner? How does the relationship help the company to achieve its overall strategy?
Nearshore rather than offshore: Another rising trend in outsourcing finance and other services is to keep it local. Where certain services (think call centre type roles, for example) have typically been farmed out to far-off locations, these are now increasingly being handled by local sourcing partners. The local input gives the company a more authentic feel, and locals have an appreciation for nationally-specific nuances and sensitivities. In the case of outsourcing finance, this is made even more relevant by the need to understand local tax and accounting laws that will affect the planning and operations of the business.
One outsourcing finance solution that is on point with both of these trends comes from The Finance Team. The company has a large network of locally qualified and experienced finance professionals, who are trained to assess and assist your business’s outsourcing finance needs. If your company needs particular financial assistance, The Finance Team can provide it on an ad hoc or temporary basis, according to your requirements.