Financial Services

Financial services outsourcing broadly refers to the outsourcing of several finance and accounting functions.

This usually includes back-office tasks like:

• Financial analysis
• Managing accounts payable and accounts receivable
• Bookkeeping
• Risk management

In a nutshell, most companies outsource financial services for several reasons like:

A. Financial Processes Are Usually Complex
Processes like accounting and supply chain finance management require tons of expertise and experience. That’s why many companies prefer to outsource them to a dedicated financial institution instead of putting inexperienced in-house staff on the job.

B. Keeping Up With the Latest Technology
Outsourcing services usually have the latest software for performing the finance function, allowing you to benefit from their constantly updated infrastructure.

C. Improved Efficiency
By outsourcing complex finance tasks, you can dedicate your time and resources to your core business activities instead.

D. Operational Resilience
As you can upscale or downsize your outsourced processes at any point, outsourcing acts as a shield against the operational risk of a volatile market or unforeseen circumstances like COVID- 19.

Now that you have a rough idea of why companies outsource their financial activities, let’s take
a detailed look at three key benefits that form the basis for all the benefits we discussed above:

3 Major Benefits of Financial Services Outsourcing

Recently, tons of companies have turned to financial services outsourcing as a cost-effective solution to boost their business growth. Here are three significant reasons behind this:

1.Cut Hiring and Infrastructural Costs – An in-house finance department can be costly. From hiring and training costs to management and office rentals, most businesses have to shell out thousands of dollars just to handle their accounting and financial reporting needs! However, by outsourcing the finance department, you can significantly reduce these costs. How?

By working with a financial services outsourcing service provider, you save on:

A. Talent Acquisition and Onboarding Costs – Instead of spending tons of time and money on finding the right employees, hiring an outsourced team allows you to get started immediately.
B. Training Costs- Financial services outsourcing professionals have years of experience catering to a variety of businesses. This reduces the resources and time you have to spend on training your outsourced accounting services team.
C. Software Pricing- To stay competitive, outsourcing solutions regularly update their software. This allows you to benefit from top-of-the-line tools at a fraction of the cost you’d incur if you invested in them yourself.
D. Infrastructural Costs and Rentals- As your outsourced team does not consist of in-house employees, you don’t need to worry about renting real estate or paying for utilities (electricity, internet connection, etc.). Your outsourcing arrangements take care of all these costs.

To Sum Up: Outsourcing an accounting service allows you to work with the best financial experts in the financial services industry at a fraction of the cost of maintaining in-house teams!

2. Access to Global Talent and Expertise- When you hire in-house finance teams, you’re usually limited to the talent pools available locally. However, the best fits for your company may not always be the ones from your city or
country! Luckily, this isn’t the case with outsourcing. Outsourcing your finance tasks allows you to work with the best professionals in the financial services sector from across the world. These teams are experienced at working remotely to
provide as much, if not more, value when compared to an in-house team. What’s more? Thanks to time zone differences, working with a global talent pool allows you to extend your company’s operational hours. Through effective management and communication, you can take advantage of the time zone disparity to massively boost the efficiency of your finance activities.

3. Increase In-House Efficiency- By outsourcing your financial services, you can increase the efficiency of your in-house staff as well. How?

There are several reasons for this:

A. Offload Managerial Responsibilities- Outsourcing your financial team allows managers and business owners to focus on the core aspects of your business instead of trying to keep up with accounting and financial statements. This is especially beneficial if your managers are responsible for other departments and aren’t particularly experienced in financial management.
B. Frees Up Your In-house Employees- As all financial services are taken care of by your outsourced team, your in-house employees can spend more time and effort on other roles towards growing your business.
C. Optimize Current Expenditure- An excellent accounting outsourcing provider can help you identify cost-saving opportunities without compromising on efficiency and quality of work.

6 Reasons to Outsource Financial Services

1. Save up to 70% on staffing costs- Affordable staffing is the number one reason why companies outsource their business functions. Through outsourcing, you can save up to 70% on employment costs through your BPO partners’ cost-effective solutions.
2. Diversify your workforce- Outsourcing can help you diversify your workforce by letting you access world-class remote teams. Leverage your outsourced team’s skills, talents, and expertise – at a fraction of the price!
3. Get focused on your core tasks- Who doesn’t want a lighter workload? Outsourcing firms partner up with companies so
   the latter can free up departments of extra responsibilities, allowing them to focus on core tasks at hand.
4. Instant teams – auxiliary and core roles- Outsourcing allows you to build either your core team of staff (operations), or auxiliary support teams (customer support, logistics). Either way, you can get the best staff, at the best prices!
5. Affordable external expertise- Outsourcing is not just about low-level back office support roles. Access the expertise to
   guide your business through challenging times – from sales, marketing, technical, and leadership roles.
6. Save up on resources- Outsourcing allows you to let go of expenses that comes with hiring an in-house team. From extra desks to extra office space, outsourcing firms take care of your overhead expenses for your team.

While outsourcing your financial services can seem daunting at first, it doesn’t have to be hard. Just follow the steps and tips in this article, and you’ll be all set to outsource your finance department. Once you have the right service provider and the right set of tools, you’ll enjoy all the benefits financial services outsourcing can offer you before you even know it! Is there anything else you’d like to know about financial services outsourcing? Let us know in the comments below.