Comprehensive Guide To Financial Service Outsourcing
Businesses that have reached their maximum level of financial and accounting performance and do not want to engage internally or make new hires frequently outsource some or all of their requirements to a reputable financial service outsourcing provider.
In this article, we will take a look at financial service outsourcing and the benefits it can offer your business.
Table of contents:
What is Outsourcing in Financial Services?
Financial services outsourcing occurs any time a business must depend on hiring outside team members, consultants, advisors, or experts to assist with a financial or accounting-related task. Companies hire financial outsourcing services to help them fill in some of the talent gaps they may have. In the next section, we will take a look at some of the tasks that are often handed over to finance outsourcing services.
What are Some Common Outsourced Financial Services?
While there are many tasks that can be outsourced, here are some of the most common outsourced finance services:
- Payroll support. This can include a wide range of tasks such as payroll account setup, payment method setup, tracking time worked
- Managing accounts payable and accounts receivable. Items in accounts payable are things for which the company owes and is invoiced on. Accounts receivable are the balance of money due to a firm for goods or services delivered or used but not yet paid for by customers.
- Bookkeeping. Agents are responsible for recording the financial transactions of a business and preparing financial statements, such as balance sheets and profit and loss statements.
- Bank reconciliation. This is when agents double-check your bookkeeping. They do it by comparing your business accounts against your bank statements.
- Handling records on accounting platforms (data entry). Any physical document that needs to be entered into a database is a good task to outsource to your offshore team.
- VAT administration. Here agents can help you make sure that all of the necessary taxes have been collected and you are in compliance with local laws and regulations.
Now that we know which tasks can be outsourced, let’s take a look at the benefits of outsourcing financial services.
5 Major Benefits of Financial Services Outsourcing
Outsourcing finance services offers you five big benefits:
- Cost savings. Almost always, outsourcing is less expensive than employing an internal employee. Paying a full-time salary and perks is not necessary. Furthermore, by avoiding the drawn-out hiring, onboarding, and recruiting procedures, you can save time, money, and energy.
- Access to expertise. Each company that offers outsourced financial services does so with years of relevant industry experience that will help you steer your company in the correct direction. An external accountant, for instance, could assist you with many different tasks, such as ensuring compliance, getting access to important data, reducing errors, and many others.
- Improved efficiency. With the extra help that you hire, your employees will be able to focus more attention on their core business tasks instead of focusing on low-level ones. You will also have more people to help you reduce your backlog and make sure all processes are working correctly.
- Scalability. One of the benefits of outsourcing is that you can scale your project if you need more assistance. Simply tell your service provider that you need more people on your team to handle the added workload, and they will do all of the work in terms of putting your team together.
- Reduced risk. The top financial services outsourcing companies take extra precautions to make sure that your information stays secure. This gives you confidence in your team and the service provider as a whole.
How to Choose the Right Outsourcing Provider
There are many service providers on the market today, and you need to know how to pick the best one. Here are some steps you can take to choose the best one:
- Define your business requirements. Take a close look at what you actually need help with before starting off your search. Different companies have their own strength, and by identifying your requirements, you will be able to find the right company for you.
- Evaluate potential providers. You should certainly do your homework in terms of researching potential service providers. Be sure to ask for more than just pricing but also for their experience and expertise.
- Check for security measures. This is a really important one because the last thing you want is some of your data being made public. This can cause compliance issues and cause your customers to lose confidence in your company.
- Evaluate their communication skills. You will be working with this company closely if they are selected, so be sure that their communication skills match your expectations.
Trust Pexly With Your Financial Services Outsourcing Needs
If you are looking for a trusted provider in the financial services outsourcing field, Pexly can take some of the work off your internal teams and improve processes and efficiency. We have extensive experience implementing projects of all sizes and complexities and are confident that we can come up with a solution that meets your needs.