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6 Factors that Influence Finance & Accounting (F&A) Outsourcing Success

BPO firms.

Find below the top 6 factors that influence F&A outsourcing success:

  1. The pricing model

It is important to get the pricing right, for reasons more than one. While talking to the outsourcing firms, too low a pricing, if sought or negotiated upon, would lead to lapses or non-seriousness in following procedures by the outsourced firm, thus complicating the workflow and leading to loss of face, fines or non-completion of tasks at hand. Too high a price, and you would not be able to justify the outsourcing and improvement of the process as it would impact you the returns on investments, bottom line and profit margins.

Here there are two models primarily on offer. A Full-Time Employee (FTE) model is based on time and assets usage by the service provider, thus fixing the price based on usage of resources. A Transaction Price model is priced and charged based on the number of transactions which may vary from time to time. As a business, it is important you analyse both the models at hand to come to a conclusion as to what best suits your process. Ideally, for most firms, a combination of the two is a win-win agreement. There are certain firms that would also be willing, in fact happy, to work on a gains model where a certain percentage of gains is shared with the service provider. Whatever you decide, the pricing model remains the most important factor in taking a call of outsourcing and this would have long and short-term effects on the flow of your business, the flow of processes, and the gains you hope to seek with the arrangement.

  1. Methodology adapted while outsourcing

The pertinent question is why to outsource. Based on your answer to this, it is important to get the method right. If you are outsourcing for cost benefits and focusing on your core business offerings, you are ideally placed to outsource the entire Finance and Accounting process, while if you are looking at process improvement in certain areas then it might be apt to only look at outsourcing a part of the process. This decision is another major factor in the success of the said arrangement with an outsourced service provider.

  1. Location of the service provider

Choosing the right location of the outsourcing partner would impact you in multiple numbers of ways. Nearshoring or finding a service provider near your own location could prove detrimental if the aim is to get skilled labour at lower costs. Too far a location and you risk increasing the costs of logistics and related exchange of physical information. The right location, with trained employees, and know-how of processes is an important factor in the decision making process for the firm looking to outsource.

  1. Bespoke solutions

Custom solutions, based on the specific needs, are an important factor in taking a call on outsourcing F&A. Blanket solutions or one-size-fits-all solutions are best avoided. The needs, compliances, rules and regulations are never the same for different organizations; hence a solution needs to be different too! Flexibility and elasticity in plans and processes a long time would be needed, hence it is important to understand if the service provider has the bandwidth to offer in such cases when required.

  1. Security of data and information

The service provider would need to have multiple levels of security to help prevent data loss, leaks, or pilferage of important information related to business processes, arrangements and sensitive dossier. Having the right firewalls to protect against hacks and to have multiple layers of access for the range of employees at hand would be some basics that the service provider would need to display before the arrangements are discussed. How information is accessed by outsiders or how frequent internal and external audits are conducted, would be some questions you would need to seek before one takes a call on outsourcing.

  1. Returns

The main aim to outsource of often costs, hence that is something that would be safely assumed to be happening. Improving efficiency of processes, enhancing timely deliveries of processes and ensuring compliances are the returns you should actively seek. Inversely, if not achieved, this could lead to losses that weigh greater than the advantages of reaching out to a service provider for outsourcing Finance and Accounting processes.

Taking the above factors in consideration during your negotiations and then finalising finance and accounting service provider for your F&A process outsourcing is a key to the success of the efforts and trust you lay on the service provider. Knowledge of the above factors while analysing your choices at hand could prove crucial to the success of the idea to outsource.

For More Information On How MAX BPO Will Deliver Value To Your Business Through Our Finance And Accounting Outsourcing Services Please Contact Our Team On IND +91 01204322810 And USA +1 949-281-6905 Or Write Us At [email protected]

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