The Outsourcing Dilemma: Addressing Common Concerns (+ Insights for CFOs)

Outsourcing has been a hot topic of debate in the CFO realm over the past few years. In fact, the finance and accounting outsourcing market is expected to reach $75.2 billion by 2030. This can leave you wondering if outsourcing is the best route for your growing finance team. To truly consider finance outsourcing, you must first debunk the common problems with outsourcing that frequently worry CFOs. We’ll address the top ten outsourcing problems in this article, demonstrating how to confidently leverage the benefits of a finance partnership.

Debunking the Top 10 Problems with Outsourcing

1. Outsourcing is for Large Enterprises

   One of the most common outsourcing myths is that outsourcing is reserved for large enterprises. This is the opposite of true. Every business, regardless of size or industry, can leverage finance partnership benefits, like lowering costs and streamlining operations. Recent data suggests that 83% of small and medium businesses plan to maintain or increase their budget for outsourced services.

   Whether you are looking for help transitioning your small business into a larger enterprise, or simply need help with your back office support, finance outsourcing might be the solution you’ve been searching for. Make a list of tasks that commonly get pushed off and use this as your starting point for pursuing finance outsourcing.

2. Outsourcing Compromises Securities

   Another top CFO outsourcing concern is the security of sensitive information. All businesses store some type of confidential information, such as customer names, identifying numbers, or payment data. Ensuring this information remains secure is not only a good business practice, it’s required under laws like the Gramm-Leach-Bliley Act and the Fair Credit Reporting Act.

   Countless CFOs believe that outsourcing finance tasks opens the door to security issues. Would you be surprised to learn that most outsourced finance companies have high-end security features and preventive measures in place? From secured servers and document transmissions to robust internal vetting processes, this outsourcing myth shouldn’t hold you back from leveraging the benefits of finance outsourcing. Ask your prospective finance outsourcing provider about their security protocols and make sure they are aligned with your expectations.

   Find out how to maintain airtight security when you outsource. Get Data Protection Tips.

3. Outsourcing Means Sacrificing Control

   Some CFOs avoid outsourcing because of a fear of losing control in key areas of their company. Contrary to what you might believe, finance outsourcing enhances oversight and transparency. Having a fresh set of expert eyes completing tasks can catch errors and identify opportunities. Similarly, by having a finance professional complete mundane and time-intensive tasks, you have the ability to improve your oversight and control by verifying everything at a high level.

   Moreover, outsourced finance contracts provide clear terms, including who the outsourced professional reports to, the tasks the professional will complete, and the terms of the agreement. This not only provides clarity in your partnership but also defines your expectations.

   Regain control through strategic outsourcing practices. Find the Keys to Success.

4. Outsourcing Reduces Collaboration

   Another outsourcing myth is that outsourcing reduces collaboration. If you’re a CFO who likes fluid communication with your team members, this might be one of your top CFO outsourcing concerns. Outsourced finance teams don’t operate in isolation. Instead, they work as an extension of your team, communicating with you and other staff members on a daily basis.

   Structuring your operating model to facilitate seamless communication between your in-house employees and your outsourced team might take trial and error at first. However, after you have guidelines established, you won’t notice a difference in collaboration. For example, you might decide to set up a team-wide check-in meeting each week. This keeps everyone on the same page and improves efficiency in your workflow.

5. Outsourcing Comes with Cultural Problems

   Outsourcing myths often assign cultural issues as a barrier to pursuing outsourcing. However, cultural issues can be challenging to overcome in any organization, regardless of whether your workforce is in-house or outsourced. Before you hire an in-house team member, you likely conduct a thorough interview and complete due diligence behind the scenes. The same processes should apply to onboarding an outsourced finance professional.

   Throughout the due diligence process, you might uncover cultural differences. For example, different holidays and cultural norms are common with overseas outsourced labor. Like any other in-house employee, recognizing and respecting these differences is important. In most cases, your outsourced finance professionals will let you know about something important well in advance, such as a day off for a holiday.

   Navigate cultural differences by choosing the right location. Discover the Philippines Advantage.

6. Outsourcing Hinders Flexibility

   Outsourcing does impact your flexibility, but not in the way you might be thinking. Outsourcing gives you the backend support to scale up or down, depending on the business season you’re in. For example, if your business experiences an influx in demand and finance tasks during the end of the year, you can easily onboard another finance professional to ensure work is being completed timely and accurately. Even better, you might choose to work with an outsourcing agency that has a team on standby.

   Since outsourced finance professionals only work when there are tasks to be completed, you don’t have to worry about paying expensive in-house employee wages during periods of low work. Not only does this save your business money, but it also gives you ultimate flexibility. Flexibility is an important aspect of effective business management, which is why finance outsourcing is appealing.

7. Outsourcing Lowers Work Quality

   The goal of outsourcing is to improve work quality, not skimp on processes and projects. Would you be surprised to learn that most outsourced finance professionals have extensive experience and education in finance and accounting? One of the top finance partnership benefits is access to an improved work product.

   For example, if your internal employees are swamped with work, they might forget to close the month-end properly or forget to enter an important invoice. Shifting work to an outsourced professional reduces workplace stress and ensures every task is being completed accurately and according to defined procedures. Furthermore, if you aren’t happy with your outsourced finance professional’s work quality, you can easily let them go and search for a new partner.

   Guarantee results and maintain exceptional standards while outsourcing. Discover 5 Quality Rules.

8. Outsourcing is Irreversible

   Outsourcing myths also define the outsourcing process as irreversible. Bringing on outsourced help doesn’t mean current jobs are at risk or that you’ll never have the ability to return to an in-house workforce. In fact, outsourcing certain roles and responsibilities in your finance function might help you keep current employees satisfied. Recent data found that workers who are burned out are three times more likely to search for a new job.

   For example, if your current finance employees dread going to work, they are more likely to search for alternative employment opportunities. By shifting work around, you can ensure that employees aren’t overworked or nearing burnout, increasing your retention rates. With high retention rates, your company avoids costly recruitment and placement fees.

9. Outsourcing Has Time Zone Problems

   While this outsourcing myth does hold some truth, it shouldn’t be one of your CFO outsourcing concerns. Hiring a workforce overseas will have time zone differences; however, most outsourced finance employees understand the needs of business owners. Instead of working during their time zone schedule, they will adapt to your schedule.

   For example, if you are located in the United States, you can expect your outsourced employees to be active during normal business hours. Setting expectations for work hours during the hiring process is the best way to avoid debilitating time zone challenges. Let your outsourced finance professionals know when you need them available. If they are unable to accommodate your needs, search for a different outsourced partner!

   Learn how to navigate time zone differences successfully. Time Zone Truths Revealed.

Alleviating Your CFO Outsourcing Concerns

Scrutinizing these ten common outsourcing problems is important to see the finance partnership benefits your organization can leverage. Like any new business process, there will be growing pains. However, taking each hurdle and challenge as a learning lesson allows you to refine your approach to finance outsourcing and take full advantage of the benefits. To get started on your finance outsourcing journey, reach out to one of our team members today to schedule your free consultation.