To Outsource or Not to Outsource
Today, outsourcing extends far beyond traditional accounting and bookkeeping services. Companies are increasingly leveraging outsourced finance functions to drive strategic initiatives, streamline operations and enhance operational efficiency, and mitigate risks.
In this rapidly evolving landscape, companies need to stay agile and proactive, partnering with trusted outsourcing providers to navigate change, seize opportunities, and drive success in this dynamic world.
Over the last 9-10 years Bridgewey Limited has been responsible for handling the outsourced finance functions of a number of SMEs in a variety of sectors including recruitment, alternative asset management, precious metal and professional services. In our role as outsourced provider, we play a pivotal role in the finance function, undertaking activities ranging from the capture of financial data, through to the production of management and statutory accounts.
When a company looks at how it delivers its finance function (internal or external) it should take into consideration, the size and complexity of the business, the activities to be outsourced, cost implications and the expertise required to deliver the function.
Common activities outsourced include the payroll function, supplier management and accounts payable, cash control, treasury management, accounts receivable, tax compliance, bookkeeping & financial reporting, .
You will need to evaluate the cost savings versus the investment. In doing so consider both direct costs (being the fees to the provider) and indirect costs (being transition and management time).
Expertise of the Provider and its Reputation accounts for a large part of the selection criteria. Due Diligence is a Must, you should assess their expertise, technology, security measures, and where possible gain feedback from current or previous clients on their performance.
A question to satisfy yourself about is whether the provider complies with the relevant regulations and do they have robust data security measures in place to protect your sensitive financial data?
The benefits of outsourcing should outweigh the potential challenges faced of doing so. Expected benefits include cost savings, gaining access to skills and experience not in-house and the ability for the company to focus on its core activities and scale up is operations; Whilst challenges faced could be getting over that uncomfortable feeling of relinquishing control over the finance function, possible integration issues with the provider, and concerns over the quality of work delivered and how these are addressed or prevented.
Outsourcing finance functions can be a powerful strategy for improving efficiency and gaining a competitive edge. However, Outsourcing requires careful planning, execution, and on-going management to realise the full benefits while mitigating potential risks.
