How Financing and Accounting Outsourcing are Reshaping the Future of Business

Posted: 05.17.2019

Outsourcing has become commonplace in business at large, whether you’re hiring contract manufacturers or outsourcing your IT department. It is becoming more common in the financial services area. It is also increasingly important for businesses of all sizes to remain ahead of the game. Let’s look at how financing and accounting outsourcing are reshaping the future of business. We’ll also discuss the factors driving these trends and their likely long-term impact on business.
 

The Executive as a Service Model

The Executive as a Service is a new form of consulting model. The Executive as a Service has a top-level practice that provides expertise on demand. You can retain the person for high-level strategy planning but don’t have to keep them on the payroll as a full-time employee. However, they’re more than an outside consultant. They provide strategic thinking and leadership. They may work one or two days a week for as long as you need them. They’re there until you’ve pivoted your firm in a new direction or completed the new business market rollout. Then they’re gone. You only pay for what you need from this C-suite level professional. These consultants tend to be an outside Chief Financial Officer or Chief Technology Officer.

This consulting model is driven by the cost savings and the increasingly frequent need to bring in niche experts for particular business transformations.
 

The Outsourcing of All Financial Services

It is expensive to maintain an in-house accounting team, especially for small and medium-sized businesses. This has fueled the growth of financial services outsourcing. This allows businesses to hand over payroll and general accounting to professionals whose cost is shared by several other clients. The cost of training staff or licensing accounting software is likewise divided among their clients, so the cost to your business is proportionally lower.

Another benefit of financial services outsourcing is that you can readily tap into the expertise of experts as required. For example, financial services that outsource to lower cost talent around the world can find someone qualified to answer your questions on international business. Financial experts should consider earning credentials that allow them to move up the ladder. Online learning facilitates this because you can take classes from home or on your lunch break. Furthermore, you can study the topics you need to know to become more valuable to your business. For example, Suffolk University's Online MBA in Finance program helps you learn about corporate finance, investment banking, and international finance.

For many firms, the ability to reliably predict future overhead costs is reason enough to outsource financial services. If your business grows, you don’t have to hire additional staff. Your contract is simply scaled up based on the size of the organization or you move up to the next tier. You won’t have to pay for more computing infrastructure and resources.

Businesses have other reasons to make this change than the lower overall costs. One is consistency. You know what you’re going to be billed for handling your payroll and business accounting. Accounting and overhead become an entry on the budget that you can predict and plan for. You don’t have to worry about coming up with the money for consulting with an expert as required. This is invaluable if you need help with demand for a VAT return. If there is an upcoming deadline or influx of new accounts, the outsourcing firm handles the work instead of you paying your team overtime. This allows your firm to prepare year-end accounts in a timely fashion.
 

The Growth of Value-Added Services

Accounting outsourcing services typically have a list of services they can offer you at a price. If you hire them to handle your bookkeeping and payroll, it isn’t difficult to sign up for them to handle your tax returns. Or you can sign up for additional services like secretarial services and preparing year-end accounts. You can expand or contract the service agreement as your company’s needs and budget allow. This allows your business to dedicate staff to your own core competencies. It also frees up management to focus on long-term planning and decision making. This managerial flexibility, the ability to outsource as much or as little as you want, is hard to achieve without strategic outsourcing.
 

Conclusion

Financial services are essential for any business. An array of novel services has appeared to allow businesses to access the services and expertise they need at an affordable rate so they can stay in business.

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