12 июля 2018, 23:03

Finance and accounting outsourcing

The terms 'offshoring' and 'outsourcing' are often used interchangeably but
have different meanings. Essentially, they distinguish between the location
management of shared services.  
• offshoring — fixed to the location. If control
of the process is in the hands of in-house management
is said to be 'captive'.   


Most companies are wary of outsourcing. Where they have outsourced, IT and HR business processes have been outsourced more available than Finance and Accounting processes. None core and high volume, low value processes have the most likely to be outsourced. More recently, some businesses have begun outsourcing at a more strategic level .

This is being driven by a number of factors: 

1. Competitive and budgetary pressures  
• Decreasing budgets have forced businesses to evaluate strategies that
reduce costs in non-core processes. 
• Businesses are then better able to focus their more limited resources
on core competencies and activities
2. Advances in technology and communications  
• Operations are more independent of location than ever before. This is
due to rapid infrastructure improvements and cheaper communication
• Globalisation gives access to resources and talent world-wide.   
• The internet provides new opportunities to collaborate with other
businesses on a global scale. 
3. The need to transform the finance and accounting function  
• As an overhead, the finance and accounting function has come under 
scrutiny. It is challenged to become more efficient and more effective.  
• CFOs must demonstrate adherence to proper accounting principles
and disciplines. 
• Outsourcing can be used to reduce costs in a routine office
processes and increasingly in higher value support services. 
• Outsourcing can be used to achieve step changes and streamline 
unnecessarily complex business processes, systems and structures. 

In terms of offshoring, India continues to lead the global market for
outsourcing services. This is despite the apparent shortage of Indian graduates
with the cultural compatibility to work in shared service centers
inflationary problems. 
Locations in Eastern Europe and others such as China, Mexico and the
The Philippines are emerging at low cost and language advantages. The trend
is likely to continue as demand for knowledge workers in developed
economies outstrips supply. 
There has been a rise in near-shoring and on-shoring, particularly for customer
facing processes by global companies. The UK's public sector has become a
significant outsourcer, usually preferring onshore providers. For further
information on providers, referring to the Brown-Wilson Group's annual
publication, The Black Book of Outsourcing. 


Outsourcing the finance function in practice 

In the past, companies pursued outsourcing as a means to achieve better
service at lower cost. Today, many organizations are moving beyond this to
to make progress in their performance
managerial style of the company itself. Outsourcing financial operations can
encourage businesses to be more innovative and focused on value creation. 
A key consideration is which finance and accounting processes should be
outsourced. Transactional processes (such as accounts payable, travel and
entertainment, accounts receivable, billing, cash management, etc.) tended to 
be the most popular to outsource. More recently, with improvements in
provider capabilities, there has been a move to outsourcing higher end or
higher value services such as statutory / regulatory accounting, financial
reporting and tax. In some cases, more strategic processes such as
management accounting, budgeting & forecasting and financial analysis may
be suitable for outsourcing. 

Outsourcing is a major transformation project for any organization.
A key lesson learned from the experience of companies who outsourced
processes is that it requires the proper level of resources to ensure proper
governance, project management and change program management,
otherwise it will not yield the intended benefits.