Outsourced Accounting: How CFOs Can Reduce Operating Costs to Scale Without Fail
Reduce Operating Costs Through A BPO
As a business grows, the financial close process subsequently increases in both scale and complexity. While some organizations expand their headcount to take on the increased workload, CFOs seeking to reduce operating costs might adopt business processing outsourcing (BPO). BPO services offer alternative outsourced accounting solutions, by completing essential financial services functions through a third party. Operational tasks like non-core back office, IT, and finance functions are all necessary pieces of doing business, but they don’t do anything to increase the bottom line. BPOs can handle these segments of the workload so that a company can dedicate its employees and resources to growing the core business. As a bonus, BPOs can reduce the need to increase payroll or benefits to bring on additional staff.
In general, the BPO services industry is proving quite successful. In 2020 the global market size was valued at over $232 billion with an expected compound annual growth (CAGR) of 8.5% through 2028. Driving demand are the shift to more flexible remote work environments and the need for business agility in unpredictable markets. Specifically within the world of finance and accounting, banking regulatory requirements are a leading factor in driving BPO growth, with the banking and financial services industry forecasted to experience the fastest rate of growth across industries.
Outsourced Accounting Is A Modern Solution
Automation software is one of the main factors driving the adoption of BPO services. Developing technologies like process automation and cloud computing are deployed by BPOs to reduce operating costs, which helps to fuel their clients’ growth.
Software programs can complete the same essential job functions at a faster pace than a person. Meanwhile, cloud storage requires less physical space, which can reduce the amount of energy consumed. It is estimated that 83% of enterprise workloads are stored on the cloud as of 2020. Companies that turn to BPO services can utilize the latest outsourced accounting technologies without additional investment to maximize efficiency gains and reduce operating costs.
By investing in outsourced accounting and therefore adopting their automation tools, companies gain the added benefit of unlocking the human capability within their core team. With mundane tasks covered by automation software and BPO services, employees can feel empowered to focus on strategic and challenging work that adds value to the overall business.
This results in greater employee satisfaction in their work, as well as the ability to effectively deliver on new demands from the business as it scales. Furthermore, when leveraging technology and automation, retaining talent is easier– F&A teams experience better working conditions and the chance to grow their skill set, increasing the desire to stay at their current company. This also leaves the Office of Finance with more time to find ways to invest in their employees, not only to improve morale but to also improve the skills they’ve developed on the job. By offering development opportunities such as training or continued education, organizations can ensure their people will feel appreciated and create value.
Best Practice Tips For BPO Services
If your organization is considering adopting a BPO to handle some of your processes, or if you’re a BPO yourself, here are a few considerations to keep top of mind:
- A BPO or outsourced accounting firm should be able to handle essential financial close processes through methods that reduce operating costs; if it’s not cheaper than the company’s current team, there is no value added.
- In addition to saving money, a BPO should focus on time savings and generate less risk. The company should have access to at least one subject matter expert that is competent in essential practices.
- A business that offers BPO services will work with multiple clients at once. To save time on data-heavy processes like transaction matching and reconciliations, the BPO should strategically deploy cloud-based tools like task management and automation to improve workflows.
When considering working with a BPO to improve the financial close, businesses should look for a partner that competently displays all of the traits above. Conversely, if your organization is a BPO, optimizing your practices based on the above will make you an attractive prospect.
Both financial close automation software and BPO services enable your business to tap into growth opportunities. To learn more about how to scale your business without fail, check out our related eBook.
Written by: Nathan Stabenfeldt