Common Benefits of Outsourcing Finance Operations
Outsourcing financial operations like bookkeeping, payroll, accounts payable and accounts receivable brings obvious benefits to an organization including cost and time savings, more focus, timely and transparent financials, and accounting expertise. The list of benefits is long and generally well understood. But outsourcing has some “hidden perks” that can be equally if not more important to the organizations who partner with seasoned third party providers.
In this blog post we’ll talk about the common benefits of outsourcing financial operations, but will endeavor to highlight some of the lesser known gains organizations receive when placing their back office functions in the hands of proven partners.
The Well-Understood Benefits of Outsourcing Finance Operations
Business process outsourcing is enormously beneficial to companies of all sizes because it can help them reach levels of success that aren’t always possible when relying on limited resources.
Here are some compelling reasons why you should consider outsourcing accounting functions:
Cost Savings: Outsourcing back-office functions can often be more cost-effective than hiring and maintaining in-house staff.
Focus on Core Competencies: By outsourcing non-core tasks, organizations can focus their time, resources, and energy on core business/nonprofit activities.
Access to Specialized Expertise: Outsourcing providers often have specialized skills and knowledge in specific functions, leading to higher quality and more accurate work.
Scalability: Outsourcing allows organizations to easily scale their finance operations up or down in response to changing needs.
Improved Efficiency and Productivity: Outsourcing providers are often more efficient in handling tasks due to their expertise, systems, and processes, which can result in faster turnaround times and increased productivity.
These benefits alone are reasons to seriously consider outsourcing for your organization. They enable you to refocus on your core purpose and get back to growing your organization.
“Our team is learning new things every day and overall, we are experiencing far more transparency and efficiency in our financial management.”
- Dorinda So, Executive Director, pointA
The Less Obvious Benefits of Outsourcing Finance Operations
OK, so you’re going to save money and get more streamlined financial operations from people who really know what they’re doing. But what are some of the additional perks of working with third party professionals for back office functions? Let’s get into it!
Access to Advanced Technology is Included: Finance outsourcing firms typically invest in advanced, proven financial software and technology, which would otherwise be very costly for individual organizations to acquire and maintain. They also ensure that their staff are properly trained to maximize the potential of the tools, and build optimized processes around those toolsets. Access to both cutting-edge technology and people who have experience using it can enhance the speed and accuracy of financial processes ten-fold.
Increased Security Measures: Reputable finance outsourcing providers often have more robust data security measures in place to protect sensitive financial information. They invest in data encryption, secure networks, and compliance with data protection regulations.
Competitive Advantage: That’s right. Outsourcing can help businesses be more competitive by not only reducing operational costs, but improving service quality to clients and business partners, and allowing for faster adaptation to market changes, regulations, and more.
Risk Mitigation: Outsourcing providers quite often assume certain risks associated with back-office functions, including compliance with changing regulations and technology updates. This can help organizations significantly reduce their exposure to legal and operational risks.
Access to Global Talent and Round the Clock Capacity: Many finance outsourcing firms operate in multiple countries, giving you access to a diverse pool of finance professionals with various skills and capabilities, and 3X the capacity to get the work done “around the clock”.
Improved Vendor Relationships and Terms: Outsourcing finance functions can help improve relationships with vendors and suppliers by ensuring timely payments and accurate financial transactions, which can also lead to better terms and discounts.
“With Enkel, not only do we get deep expertise in the nonprofit sector, but their services come with all the technology and processes we need to go digital. Everything is done in a more timely fashion and the reporting and support I get from Enkel is helping me be a better ED to both our staff and Board of Directors.”
- Brandon Yan, Executive Director, Out On Screen
And Last But Not Least, Leaders Keep Learning and Developing
Executives and leaders learn new things and valuable lessons when working hand in hand with other professionals. Third party providers are no exception. When leaders and executives work closely with Financial Operations experts, they get a lot of perks that help them be better in their roles. Some of those benefits include:
Finance Fundamentals: Executives can gain a deeper understanding of finances indirectly through the outsourcing process and interactions with their outsourcing partners. They monitor the performance of the organization, review financial reports, and ensure compliance with financial regulations. This oversight process can greatly enhance their familiarity with finance concepts and practices.
Data-Driven Decision-Making: Outsourcing typically involves data collection and analysis. Executives learn how to make data-driven decisions, improving their ability to use data insights in other aspects of the business.
Time Management: With back-office tasks offloaded through outsourcing, executives have more time to focus on strategic priorities. This encourages better time management and prioritization of key activities.
Leadership Development: Overseeing outsourcing relationships requires strong leadership skills. Executives develop and refine their leadership qualities as they manage and collaborate with external partners.
“We’ve learned so much working with Enkel about best practices, processes and workflows and have been able to use those learnings in other parts of the business. And a big win for us is that we are more able to focus on the strategic aspects of our organization.”
- Gaby Estrada, Executive Director, Fast & Female
Conclusion
Outsourcing financial operations is increasing in popularity as organizations realize the importance of staying focused on the core business, and cutting unnecessary costs. COVID-19 taught many business operators that remote and distributed work was not only doable, but highly efficient and less costly. Today, outsourcing non-core functions is the new normal.
