Finance plays a critical role in a business environment. A typical finance department is responsible for financial statements, risk analysis, cash management, accounts payable, accounts receivable, sales/revenue and many other areas depending on the nature of the business operations. However, these tasks do not come cheap and require professionals and business tools such as QuickBooks to help produce end-results.
Outsourcing of financial services have become extremely attractive to many small to midsize firms. This is due to demand for easing of finite resources such as cash, labor, and time. By outsourcing financial services, many benefits occur:
Financial Proficiency. An experienced outsource financial firm will generally understand the business operational needs and wants. Given they have resources, they will immediately be able to provide work related to financial processes, system integrations, cash management, financial reporting and other key areas as needed.
Rerouting Focus. By reducing cost centers such as finance departments, this allows firms to redirect their focus to core activities such as production and customer service. Given the constraint of time and energy, managers and employees are limited in how much effort they can apply each day. Reduction to cost centers can help allocate finite resources towards more meaningful objectives in-which a business is found upon.
Reduction in labor and payroll costs. Salaries related to finance departments are usually fixed in nature. Regardless of fluctuation of production, these obligations must be fulfilled. Payroll tax is a type of liability which incurs not only to employees, but also to employers. Generally, payroll taxes include payments to medicare, social security, state unemployment taxes (SUTA) and federal unemployment taxes (FUTA). When outsourcing – labor and payroll taxes are reduced to the current level of headcount allowing a business to reinvest capital in areas which are directly connected to primary operations.
Risk Management. Every business operates with some form of involved risk. Finance deals with certain types of risks such as investment risks, cash flows, regulations, changing technology, taxes, unforeseen events and many more. Due to experience, outsourced financial firms are generally more equipped to handle these types of predicaments than in-house finance teams, because of the accessibility to additional resources on-hand and the ability to request assistance from their pool of network.
Accessing real-time information. These days, businesses require information to be processed and available immediately to meet the modern nature of our accelerated decision-making needs. Data is constantly being produced. Online searches, physical traffic, financial transactions are major drivers of today’s marketing and financial decisions related to forecasting and generating sales. Business intelligence tools are in-demand more than ever. Unfortunately – small businesses and some mid-size firms are unable to tap into these tools. This is where outsource firms can help these businesses access this type of information. Not only can outsource financial firms help produce raw data, but also help with predictive analytics leading to financial planning and budgeting for future operations.
It doesn’t matter if you’re a coffee shop owner or business platform provider, request an outsource financial firm to provide a demo or an hour or so of free consulting service on how they can help you produce financial results to strengthen your business operations for current and future needs.
Mustafa Chaudhry, CTP
Passionate about finding financial efficiency and data-driven decisions
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