Companies are beginning to outsource its financial operations more frequently now that the yearly cost of outsourcing is typically less than the pay of one financial executive. Cutting overhead is crucial to the success of small business and start-up companies.
Companies should consider the following five topics when determining on if financial outsourcing is the right answer for their company.
Handling a full-time staff can oftentimes be challenging especially to small business owners. A company that outsources its financial team eliminates the headache of managing multiple people and in turn receives the benefit of hassle-free timely financial statements to reflect the company’s progress and activity each month, quarter, or year. The company also eliminates the need to manage vacation time, sick leave, or any other workplace disruption. With an outsourced financial team will eliminate such potential issues by having other staff on the team work to meet client deadlines, so the client does not experience any delays with expected deliverables produced by the financial team.
Quality, some say is the most important piece to consider when finding an outsourced financial team. Quality of team members and quality of work are both equally as critical to clients considering outsourcing its financial department. Current and previous client testimonials as well as the reputation of the firm can help potential clients determine the overall quality of the team. It is important to remember that most outsourced financial teams will produce top-level deliverables because the reputation of the team depends on the team’s success which is determined by the client retention rate and client testimonials.
Keeping a competitive advantage in the marketplace is what drives outsourced financial teams to use the latest technology available that allows for the most efficiencies. Finding a cloud-based financial team is crucial to a client’s mobility and success. With cloud-based software programs the client will be able to access financials, general ledger reports, AP and AR aging, outstanding bills, and other items relating to its financial status all within a web-browser or mobile app depending on the software being utilized. This type of mobility also allows executives to have the most real-time financials as possible instead of having to wait one to two weeks for the month to be finalized and books to officially be “closed.”
Protecting confidential documents and ensuring the proper internal controls are in place can be challenging and costly to a company. With an outsourced financial team, the client automatically receives the protection from the outsourced team’s internal IT department at no extra charge to the client. The client also is able to use the secure file sharing software licensed by the internal IT department, so that the company can file share outside of the secure server. For example, via email with an outside party.
With an outsourced financial team the pricing of the monthly fees are typically always scalable to the amount of work expected to be completed each month. Most monthly fees are a flat fee which enables the client to properly budget for the year with the comfort of no “surprise” charges accumulating throughout each month. The total yearly fees often are equal or less than the pay of one full-time employee that the client would have to employ if the client chose to have internal operations instead of outsourced operations; which is typically not a scalable option for start-up or small businesses due to the high amount of overhead needed to support an internal department.
Learn more about our Outsourced Financial Management Services.