Growth in Finance & Accounting Outsourcing.

The Finance & Accounting Outsourcing (FAO) industry is undergoing tremendous change driven primarily by customer demand from the CFO / Controller for permanent general and administrative cost reduction. Whether a business is in early stages of startup or has advanced to later stages of maturity, achieving and sustaining success depends on its ability to focus on right priorities. Reducing enterprise costs is the key focus of CFO / Controllers as they have the ultimate responsibility of managing the assets of the company. The need for CFOs to grow revenues while entering new markets and reducing revenue losses, as well as a general maturing of the finance & accounting outsourcing FAO marketplace, are driving a boom in the outsourcing of finance and accounting business processes.

As per Gartner Group’s study on 2012 CIO Agenda, the top three business strategies selected by the CIOs are:

• Increase Enterprise Growth
• Attracting and Retaining New Customers
• Reducing Enterprise Costs

A recent BPO Outcomes poll measuring the state of Finance & Accounting Outsourcing(FAO) among outsourcing customers shows that FAO has substantial room for growth. According to poll results, slightly more than 1/3rd of respondents (35%) said they do not have an FAO program. The next most popular response, representing 29% of the total vote was "We outsource transactional processes like Accounts Payable and Accounts Receivable. Another 18% of respondents said they outsource both transactional processes and higher-level processes like general ledger and analytics, and 18% said they only outsource higher-level processes like general ledger and analytics. 

The FAO model which has been traditionally & successfully offered by several providers across the globe gears around the historical approach where F&A transactional processes such as Accounts Payable and Accounts Receivable functions are shifted to a lower cost location for delivery. In most instances, India leads this model because of availability of its skilled low cost labor. Large BPO providers have invested millions of dollars in the creation of off-shore delivery centers. These centers are located in major cities of India such as Mumbai, Delhi, Bangalore, Chennai, Hyderabad, etc.  While other countries have come up to offer these services, India still leads because of its availability of English speaking, educated pool of people.

Let’s look at the top reasons to outsource:

• It allows you to focus on your core top business strategies and supporting functions.
• It brings in cost reductions.
• It helps you leverage the service providers’ expertise, technology and best practices in F&A.  
• It helps you adjust internal resources from non-core activities to support core business functions.

In summary, business enterprises must focus their investments and efforts on core business strategies such as growth, customers, reducing costs, offering new products and / or services, and show results. CFOs / Controllers managing the F&A function would have to continue driving towards permanent cost reduction in the major processes of F&A.

Aria provides finance and accounting outsourcing services to help clients reduce their operational costs and to achieve a faster turn-around time. In our offshore facility, we have qualified accounting and commerce professionals who work on clients’ projects and present them with reports on regular basis. We sign a confidentiality and non-disclosure (NDA) agreement to ensure client data confidentiality. We also take internal and external security measures to protect client data.

For more information please call Sameer Sheth at 510-579-8565 or email at Sameer.Sheth@AriaBPO.com.