Finance and accounting (F&A) was one of the first processes that companies outsourced, and the practice continues to boom: Ed Thomas, an analyst for Ovumresearch, found the number of F&A outsourcing projects valued at $1 million or more increased in 2012 compared to the year before.
They are looking to move from relatively basic transactional processes, such as accounts payable to more strategic functions, like budgets, forecasts and internal audits," Thomas says. "More than a third of respondents had outsourced internal auditing, which is a high-level function."
Simplifying and standardizing F&A processes is a key characteristic of well-run companies, and by instilling good F&A processes these companies can achieve a variety of good outcomes—such as more information, more service and more cash. By simplifying their F&A processes, companies have found they can reduce the cycle it takes to close books, and they can develop better benchmark and baseline financial processes to help them meet regulatory requirements.
Expanding the scope of outsourcing can multiply such benefits, some experts say. "One simple example is accounts payable and receivables," says Jag Dalal, managing director of thought leadership at the International Association of Outsourcing Professionals (IAOP). "If you outsource only one function, you limit your benefits. If you outsource both, you get a value beyond improving the transactional component because the outsourcer can see when cash comes in and goes out. That can help the company take best advantage of the cash on-hand and optimize internal processes.
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