You’ve run into roadblocks or reached a critical juncture, and you need to decide whether to shore up your in-house team or outsource finance and accounting. What’s the right choice? As business process outsourcing (BPO) specialists, we see the value companies receive when they outsource accounting and finance every day, but we also know it’s not the right solution to every issue you might have with your in-house team, nor is it best for every company. Below, we’ll break down some of the biggest red flags that signify it’s time to start exploring BPO, some of the benefits of outsourcing, and a few considerations to keep in mind when deciding to move forward.
Soaring profits are wonderful, but if you’ve recently seen a massive uptick in growth, chances are your internal team doesn’t have the bandwidth or skills to scale up with you. Outsourcing can get you a skilled team in place quickly.
Often, you’re required to have external audits and specific types of reports when you’re getting external funding. Having an outsourced team manage your finance and accounting may be essential or, at the very least, make it easier to qualify.
Do you know how much working capital your company has right now? What about how much cash is sitting in unpaid or unprocessed invoices? Are you current on all your bills? If you can’t answer these basic questions, you need better financial reporting fast. Outsourcing can provide that.
At this stage of the game, a CEO should be aware of what’s happening, but shouldn’t have to worry at all about what’s happening in finance or accounting. Although the CFO should be able to oversee managers, his or her focus should be on things like strategy, risk mitigation, and growth. If either of these high-level executives are getting pulled away from their roles to deal with an in-house department, it’s time to outsource finance and accounting.
There’s a time and a place for manual entry. Some things genuinely require expertly trained human eyes and hands. However, computers can now scan “read” documents in the blink of an eye, understand multiple languages, recognize different currencies, and more. If you aren’t using this tech as much as possible, you’re spending more on labor than you need to and probably have books full of errors.
Almost 90 percent of spreadsheets have “significant errors,” Stuart Leung explains in a Forbes article. Most of them are caused by human error, and they can be quite costly. He points to examples like JPMorgan Chase, which lost more than $6 billion over a copy/ paste incident. Though an extreme example, even much smaller errors can add up.
Mishaps can occur even in well-oiled machines, but if you find things are disappearing, aren’t being processed as soon as they come in, or people can’t produce reports on demand, a drastic change is necessary.
Interoperability is a serious issue with today’s systems that often causes companies to do far more manual processing than necessary. If you outsource your financing and accounting, the BPO company can take care of the heavy lifting and get all your systems talking to one another for a streamlined experience.
In the wake of the pandemic, far too many companies realized they didn’t have continuity plans in place. There was nobody sending invoices, processing their incoming payments, managing collections, or paying company bills. Late fees mounted, and without money coming in, businesses flailed. If your organization was impacted by coronavirus in any of these ways, and you aren’t prepared, another wave of the virus or any other unexpected event could derail operations again. Outsourcing can offer you the protection you need.
Most companies are not finance or accounting specialists. It’s something they have to manage as a part of doing business. When you outsource accounting and finance, you’re free to focus on what you do best, knowing your back-office business processes are being managed well.
Regular reporting is essential, but knowing what’s happening with any of your processes at the exact moment you want to know is a bit harder to come by, especially if you’re managing things in-house. Although not every BPO provider can give you real-time reporting, it’s a point of pride at DATAMARK.
Like reporting, not every BPO company leverages the latest tech. However, DATAMARK can provide you with a comprehensive enterprise content management (ECM) platform that automates processes as much as possible and takes care of everything from scanning through processing.
When you outsource finance and accounting, it’s up to your BPO company to get the right people in place. What’s more, you can choose to keep the team on-site if you prefer more oversight and still get the benefits of outsourcing or select from other on-shore options as well as near-shore and off-shore destinations to maximize value, all while tapping into a well-educated talent pool.
Between streamlining processes, better training of the team handling manual processes, and automation, errors are significantly reduced with BPO. You can even have specific criteria related to errors written into your service level agreement, providing assurance your business is protected.
Continuity planning can be built into any process you outsource, so the impact from issues like COVID-19, natural disasters, and other unexpected events is minimized.
Outsourcing is well-known for saving companies money. A considerable part of this is the enhanced efficiency, but reduced labor costs, lower operational expenses, and fewer errors contribute to the savings too.
Time, money, space, and other valuable resources can be freed up when you outsource accounting and finance, so you can apply them to your core areas of business and grow.
It bears repeating. If the BPO firm isn’t leveraging modern technology as DATAMARK does, you won’t maximize your benefits.
Consider everyone involved—the consultants you speak with, the business process engineers who help you strategize, your account manager, and the individuals physically handling the tasks. Do they embody your company’s values and have the necessary skills?
Expertise can be seen in several areas. For example, DATAMARK has been in business for more than 30 years. In this time, we’ve supported Fortune 500 companies, government agencies, and large enterprises. We not only have specialized experience in outsourced finance and accounting, but experience providing services to a multitude of industries, such as healthcare, retail & manufacturing, transportation, insurance, and energy & utilities.
Transparency is crucial when you’re dealing with something as sensitive as money. Find out in advance how your BPO firm plans to keep you in the loop.
At DATAMARK, we offer a number of accounts payable services, such as purchase order management, invoice receipt and imaging, three-way match reconciliation, and employee expense processing. On the accounts receivable side of things, we can address order management and invoicing, customer collection management, refunds and settlements, and more. However, our goal is always to support you in the best way possible, and we tailor our services to meet the needs of each client. If your in-house team is excellent with one thing but terrible with another, we’re glad to help you with only the trouble area.
On the one hand, scalability can be thought of in terms of growth, like when your revenue skyrockets. However, your BPO company should be able to scale with your general needs as well. A right partner knows your business inside and out. They understand your values, your customers, and your pain points. Having to add in more vendors and find another suitable match is hard. Chances are if you have a positive experience outsourcing this, you’re going to want to look into more options—perhaps full-scale enterprise content management transformation or call center outsourcing. Make sure these options are present before you commit to a BPO company, so you will never have to worry about the vetting process again.
DATAMARK has the experience, processes, people, and resources in place to turn your finance and accounting woes into wins. Contact us to learn more.