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Finance outsourcing is believed to have begun in 1990 when two business people met in a London hotel. A BP CFO and a partner at Accenture talked about the severe problems BP was facing in the midst of the oil crisis. BP was struggling with highly agile competitors, plummeting oil prices and an outdated cost structure.
As they talked about these difficult issues, they came up with a highly innovative idea: the consulting company Accenture would take over several aspects of BP’s finance and accounting. By 1991, more than 300 BP employees transferred to Accenture’s offices in Scotland, where they carried out BP’s payment processing, forecasting, and joint venture accounting, among other functions.
Since that time, more and more companies have looked to outsourced finance as a strategic way to cut costs, improve performance and prepare for the future. In this post, we’ll look at five reasons to use outsourced finance.
When you outsource your financial leadership, you have an opportunity to gain the perspective of experts who have seen the inner workings of a variety of businesses. You will have the assurance that your finances comply with best practices and applicable regulatory standards, and you’ll also be able to count on the objectivity that comes with independent advice.
This outside perspective and increased accountability adds financial firepower to your business. With timely and accurate reporting, you’ll be able to make decisions more quickly and take advantage of more opportunities.
Smaller businesses can struggle to successfully cover all areas of finance with in-house personnel. For example, your current finance staff might be great at forecasting but struggle with other disciplines like audits and corporate tax.
With an outsourced CFO, you can gain access to experts in all areas of business finance, so your business can be confident in every area. This breadth of experience can help your business to fill in current gaps in your systems and to maintain strong financial health as you move into the future.
Due to the limited supply of local talent and other factors, it can often be difficult for businesses to maintain a reliable finance team. Companies sometimes find themselves in situations when the person with the most historical information and knowledge retires or leaves for another reason.
You can avoid this problem when you outsource your finance operations. For example, a cleaning franchise called OpenWorks found that it had difficulty maintaining reliable staff in its accounts receivables processes before deciding to outsource financial duties.
In the months following this change, OpenWorks realised two important benefits:
Managing all of your finances in-house can involve growing pains. For instance, software that is appropriate for a very small business may begin to become limiting when more staff, suppliers and tax obligations are added to the mix.
With outsourced finance, however, you don’t have to worry about background issues like accounting software. At Altus, our outsourced CFOs maintain state-of-the-art finance systems that can provide your business with seamless finance operational tasks as well as data-driven analysis and management reporting.
Business owners have to wear a variety of hats, whether the hats fit well or not. If business finance isn’t your forte, you may have a difficult time establishing reliable and accurate financial systems that will meet the needs of your business both now and in the future.
When you outsource finance, however, you can count on the experts to create reliable financial systems while you focus on what you do best: providing leadership and direction for your business. As your business grows, you will be assured that your finances are in a state to grow with your vision and innovation.
You can add financial services while your business grows, without having to hire in-house personnel yourself. You can also depend on us for making sure your business remains compliant as you grow or expand into new territories.
As you can see, there are many strategic reasons to use outsourced finance. Since that meeting in a London hotel back in 1990, outsourced finance has become more and more common, particularly among small- and medium-sized businesses.
Consider what professional, data-driven financial services could do for your company. To learn more about how your business could benefit from outsourced finance from Altus Financial, get in touch with us today.
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