CFO Service Finance & Accounting

6 Key Factors That Affect Your Business’s Outsourcing of F&A

Lately, a lot of businesses have taken to outsourcing their F&A ( Finance and Accounting) functions to other third-party companies. This is because for businesses, that do not have an internal accounting department, outsourcing those sorts of services is way more practical and timely. Your business can save money and even keep more accurate accounting records if they utilize outsourcing of Finance and Accounting Functions. Outsourcing F&A to other companies also gives you more energy to focus on other business operations. So if you are the owner of a small business, then you need to seriously consider outsourcing F&A functions right now.

F&A outsourcing has become a big business in its own right. This sort of multi-billion dollar industry is highly successful. Many businesses that choose to deal with a business outsourcing F&A operation can receive a lot of advantages in the long run. For example, a smaller firm may gain a competitive edge in whatever market that they are in. And in addition to that, F&A outsourcing can even give that small firm more money, since outsourcing their financial record keeping is actually more affordable than hiring their own internal record keeping department. Thus, for the most part, F&A outsourcing can be highly successful for a lot of business.

But that is not true for all F&A outsourcing operations. There are a ton of factors, such as the professionals, systems, and even accounting processes that are used, which all can contribute to the success of the F&A in the first place. So what are those key factors that can affect F&A outsourcing deals for your business? If you want to get the most out of F&A outsourcing then you need to pay close attention to these key factors.

1. Table of Contents

   Way of F&A Outsourcing

There are a bunch of different models for F&A outsourcing, such as comprehensive outsourcing and shared services. Each type of method has got its own pros and cons, depending on the needs of your business. For example, multi-sourcing your F&A needs can help you save money, as you are delegating each financial and recording keeping function to a different service provider. But this method of outsourcing can also take a lot more work to keep track of. You may want to do a bit more research on the different methods of F&A outsourcing so that you can choose the best one for your business.

2. Cost of the Service Provider

Naturally, you have also got to think about the pricing that the service provider will charge you with. After all, if you want to get the cost and savings advantage of outsourcing your F&A labor, then you need to make sure that the service provider charges accordingly as well. But you have also got to keep in mind that you are also paying for the quality of service as well. So try and choose a service provider based on what you can practically afford for long-term outsourcing of your F&A functions.

3. The adaptability of Service Plans

There is no one size fits all service plans when it comes to fulfilling your F&A functions. That is why you may want to work with a service provider that can offer customizations on their plans. This is because if you can customize the plan that you have with them, then it is much easier to find a service that can fit the unique needs of your business. Therefore, it could be a good idea to work with a flexible service provider, who can adapt their plans to their customer’s needs.

4. Where is the Service Located?

The actual location of the service provider should also be considered. This is because their location could give you a clue as to the quality of the F&A services that they can provide you with. The location of the Finance & Accounting service provider will not only affect the skill level and competence of their professionals but the cost of hiring them as well. So you need to carefully choose the location of the service provider, based on their quality of service and the prices that they will charge you with.

5. Savings or Returns

It is already widely accepted that businesses will outsource their F&A because they want to get savings. However, you should carefully weigh the cost to benefit ratio if you want to get the most return on your investment.  You should conduct an initial cost to benefit ratio analysis if you want to see if the F&A service is even remotely worth getting into. And in addition to that initial benefit analysis, you should also conduct regular cost and benefit analysis as well, on a regular basis. This sort of regular analysis can help you determine whether or not the service is still worth continuing.

If you measure the benefits that you receive on a continual basis, then you will also know what sorts of improvements to implement, so that you can get even more returns from the outsourcing processes.

6. The Security of the F&A Service

One of the most crucial factors that you need to take into account, is the kind of security measures that the outsourcing service has got. You are, after all, giving very sensitive financial information to that service provider. And you have got to make sure that all of your financial records, such as your customer information is kept safe with them. If they have some kind of breach in security, then it could cost you some money, which defeats the purpose of outsourcing F&A in the first place.

If you consider all of these factors before choosing a company to outsource your F&A functions to, then you can get the most benefits out of the deal. Just remember, that just because a BPO company looks good on the surface, does not mean that you should jump in and hire them right away. It would be a good idea to carefully dig a little deeper into the background of the company and check out whether or not these key factors can be applied to the BPO Company itself. If you do take into account these key factors before you sign an F&A outsourcing deal, then you can be in a much better position.

By choosing the proper service for F&A functions, you can also ensure that your deal will become more successful. If you know about these factors before you choose an F&A service provider, then you can get a much better experience from their service.