When considering outsourcing your finance and accounting function, you probably have questions: How does it work? How do we transition to an outsourced team? How should we start? The process can seem overwhelming. Never fear. All it takes is a solid organizational foundation (and a stellar and experienced partner of course). Read on to answer the top six questions we get when talking with prospective clients and find out everything you need to know about Finance and Accounting Outsourcing.
How Does it Work?
If you’re considering outsourcing your accounting function, you may be wondering how it actually works. Simply put, your provider builds a qualified team of accountants in an offshore delivery center to your specifications, and then transitions your transactional tasks from your in-house team to your outsourced team. A good provider will offer you the opportunity to be completely flexible, creating a customized solution and not a rigid one. You should be allowed to be as hands-on as you wish in the development of your team and the transition to an outsourced provider.
Where Should We Start?
The accounts payable function is the most frequently outsourced process in the finance and accounting departments of organizations and is a great place to start in your outsourcing journey. While it is an essential part of operations, it is a non-core business activity that requires extensive and expensive work. This is why outsourcing this process is not only a tactical move, but a strategic one as well.
What About the Transition?
Your outsourcing provider will review your existing process documentation such as job descriptions, instruction sheets, Excel-based accounting schedules and reconciliation sheets. If necessary, your provider will help to create process manuals, checklists, and notes covering vendor specific instructions, expense allocations, and accounts used for different type of expenses. Next comes training. This can be done in one of two ways.
- A member of your provider’s supervisory team can head to the U.S. for a ‘train the trainer’ scenario.
- You can send your own trainer or team of trainers to the delivery center to train the team, just as if you were training your own in-house staff.
Which Technology Will be Used?
If you choose to outsource utilizing your existing technology, remote access must be granted to your provider. Depending on the technology option chosen, either a remote connection is set-up for accessing the accounting software hosted in client premises or web access is provided for a cloud-based online accounting software. If you aren’t yet using a cloud-based service, your provider can migrate your data to a cloud-based platform to deliver services to make things more streamlined.
What Should We Look For in the Initial Phase of Outsourcing?
During the first few weeks following the transition, your provider should be working closely with your team to ensure the process is flowing smoothly. During this initial period of go-live, you should expect your team to be in touch frequently for guidance and feedback as they put the process into delivery and fine tune it. The feedback generated from the pilot phase is used to assess needs for additional training, corrections in the process or staffing changes. After successful completion of the pilot phase, your provider will begin handling regular work volume.
Where Do We Go from there?
Once your transition is successful and you are comfortable that services are being delivered as expected, you can begin looking at other transactional areas to outsource such as accounts receivable, general accounting and payroll. From there, some organizations take their outsourcing relationship one step further and choose to receive support in areas that are more knowledge-based such as management reporting & analysis, budgeting and forecasting, and regulatory reporting and compliance.
Outsourcing your finance and accounting function can save you around 50% on average while offering you the opportunity to focus on the growth of your business. If you’re interested in Personiv’s scalable finance and accounting services, check out our web page. Still unsure if outsourcing your back office functions is right for you? Download our white paper to find out.