Finance and accounting is a core function in every organization with a far-reaching influence. The activity often requires gathering, managing and analyzing complex and diverse information on a real-time basis. It is a daunting task to maintain standardized reports often on a monthly, yearly and quarterly basis; meet regulatory compliance; as well as provide a holistic view of the state of the business. As the market scenario gets competitive and industries mature, UK firms and companies are considering finance and accounting outsourcing services.
Factors Driving Finance and Accounting Outsourcing
More and more UK companies and accounting firms are outsourcing F&A functions. After all, keeping your finance function right is a business-critical need and a challenging task. It is equally challenging to navigate the regulatory landscape across the UK.
The focus of finance and accounting outsourcing has been heavily on transactional processes such as accounts payable and receivable, billing, cash management. However, this approach is fast making way for a paradigm shift towards outsourcing higher value services such as statutory/regulatory accounting, financial reporting and tax, budgeting & forecasting and financial analysis.
F&A outsourcing is now expanding to new areas, diverse domains, and new sizes of companies and firms. For CFOs, Chartered Accountants and Finance directors, outsourcing the finance function is now both a change agent and a key differentiator to provide a competitive advantage. The perception that Finance Directors or Chartered Accountants work in silos is fast changing. Now it is all about creating financial value and newer initiatives to succeed.
One of the obvious benefits of outsourcing accounting services is cost reduction. F&A outsourcing can deliver economies of scale. Outsourcing can be used to reduce costs in routine back-office processes and higher value consulting and support services too.
Companies can reduce costs, improve efficiency, as well as gain access to a highly skilled workforce to deliver the best-quality F&A services. It is important to look beyond just the cost savings, as many Accounting firms are finding that bigger benefits come from innovation, increased speed and greater accuracy.
Companies can form strategic, long-term partnerships with Finance and accounting outsourcing service providers. Their business can benefit from deep industry knowledge and innovative analytical techniques, best practices, investment in technological innovation of a trusted F&A outsourcing service provider.
Finance and accounting firms in the UK often grapple with changes brought about due to major digitisation initiatives. HMRC is all set to become one of the most advanced tax authorities in the world by enhancing the customer experience. At the same time, they aim to bridge the gap through the Making Tax Digital (MTD) initiative.
This new process is a move to introduce a modern streamlined digital tax system that makes it easier for businesses and individuals to keep their tax records up to date and transfer information to HMRC. Finance and accounting outsourcing service providers already have processes in place and technical know-how to help accounting firms to move to the next level of digitisation.
Choosing a trusted F&A outsourcing provider will help UK accounting firms to overcome the lack of skilled talent pool. Since several years, the accounting industry in the UK has been struggling to find the right talent pool at the required time. This has been the problem since a while, which is being faced by many practices, which is due to the dearth of accountants.
Another critical advantage is that the offshore accounting team works an extension of your in-house team. This dedicated team is managed by an outsourced accounting provider. Flexible and highly scalable, this dedicated team is ideal for firms with varying business schedules or productivity demands or who face business peaks. This gives the finance directors or decision makers in the UK a certainty that the offshore accounting team will continue to perform at full strength throughout the year.
The offshore partner can manage back-office operations and ensure compliance in an increasingly complex environment. This critical support will let chartered accounting firms to stay focused on core business activities and achieve performance goals.
In the past, both companies and accounting firms pursued outsourcing as a means to achieve better service at a lower cost. Finance and accounting firms are now becoming more and more agile. Right from collecting transactional processes to counseling business leaders on strategic matters, accounting firms are seeking end-to-end F&A capabilities from outsourcing companies to unlock the full opportunity. Outsourcing financial operations can play an instrumental role in transforming F&A services. The focus will be towards innovation and value creation.