Is it worth outsourcing finance?

Outsourcing finance, from a technical point of view, is always positive. After all, in the times in which we live, marked by the hyper-specialization of functions, the expectation is that adhering to this type of solution will bring positive results. From a financial point of view, you need to make a consistent assessment of the impacts of hiring an outsourcer.

In order to help you with this analysis, in today's post we have organized the main elements that should be taken into consideration. We'll talk about how outsourcing finance can generate dividends, expand the company's management capacity, reduce costs and the precautions that should be taken by organizations planning to outsource. Be sure to check it out!

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Reducing costs

For many companies, outsourcing finance can represent a major cost reduction. Bear in mind that poor processes can jeopardize business results, which ultimately have an impact on profitability. Imagine, for example, that in the calculation and payment of taxes, recurring errors lead to the obligation to pay interest and fines, among other penalties. In other words, failure to carry out this activity satisfactorily represents a significant cost. The same can apply to other activities, such as cash flow management, payroll and the like.

Therefore, in a feasibility study for hiring an outsourcer, this aspect must be taken into account. Added to other unwanted costs that would be eliminated by hiring a consultancy, the overall value will indicate the economic viability of investing in this type of service.

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Expansion of management capacity

Another aspect to consider is the possibility of expanding the company's management capacity with the help of an outsourcer. Don't forget that by outsourcing, your company's staff will be able to concentrate their efforts on the business's core activity, which is, in fact, the reason why it was created.

By this, we mean that an IT company, for example, does not concentrate technical/managerial resources on achieving ever better financial results. What is expected of this organization is that it delivers value in the operation of information technology services.

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Ability to generate creative solutions

Outsourced services, in any area, provide an opportunity for an external agent, unaware of what is going on in the organization, to observe the entire management process from the outside. From this perspective, the mistakes and successes of this functioning structure can be assessed much better, something that is difficult to perceive in its entirety by those who are immersed in the company's work processes.

In this way, we can say with some certainty that, from this position as an external agent and with extensive technical knowledge of financial management, you are in a great position to offer creative solutions to the contracting company. Often, these solutions can represent the dissolution of difficult situations that seemed unavoidable.

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Care must be taken

After discussing the main points that make it worthwhile or not to outsource your company's finances, we'll talk about the precautions that should be taken by anyone thinking of adopting this type of solution. Read on:

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Invest time in selecting an outsourcer

When reporting complaints about the services of outsourced companies, many managers report that if they could go back in time, they would have invested more time in selecting a partner. It's that old regret of those who have given up pondering when it comes to making strategic decisions.

So, to avoid falling into this trap, it's worth taking the precaution of those who know that this type of service relationship isn't simple, and you need to bet on a company that can really deliver good results.

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Watch out for the moment of transition

The first few months of service provision after outsourcing your company's finances are always the most tense. This is because you need to implement a transition that doesn't downgrade the quality of your work processes and allows you to "pass the baton" without too much turbulence.

The remedy for this will always be a lot of study and planning. And like any transition, there must be a learning period so that the work teams involved understand what their new roles are.

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Close all the details of the contract

Outsourcing finance is not a simple process and when hiring a service provider you need to take every possible precaution. In the contract, in particular, you need to ensure that the obligations of both parties are expressed in as much detail as possible, which can avoid future frustrations.

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Conclusion

outsourcing finance requires a meticulous approach and attention to detail. Closing all aspects of the contract is crucial to ensure that the expectations of both parties are met efficiently and transparently. A well-drafted contract is like a road map that guides the relationship between the company and the financial services provider, minimizing potential disagreements and contributing to a successful outsourcing process. So when venturing into financial outsourcing, remember that the key to success lies in carefully planned contractual details.

If you need to rely on experienced accounting advice, capable of providing the best strategies for your company to improve its financial performance, get to know CLM Controller's solutions now.