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The Chartered Institute of Management Accountants recently released a Finance and Accounting Outsourcing report discussing the pros and cons of outsourcing services for this field. The report mentioned and elaborated on the following benefits of outsourcing services as a whole.

Cost Reduction

Outsourcing can deliver significant economies of scale by using standardised processes and leading-edge technology. Suppliers can perform finance and administration functions far more cheaply and efficiently than companies working on their own. Companies can reduce working capital, improve tax efficiency and avoid capital expenditure by outsourcing some or all of their operations.

Radical Transformation

As a strategic move, outsourcing can enable broad structural change which creates value while supporting corporate objectives.

Access to Superior Capabilities and Expertise of the Provider

Businesses can develop long term strategic relationships or partnerships with their providers. They can benefit from superior capabilities, best practice expertise and new investment in resources that a specialist provider can bring to their business.

Release of Capacity for Remaining Finance Function to Provide Business Partnering

Outsourcing of finance processes to providers with greater expertise and economies of scale can deliver large efficiency gains to the overall performance of the finance function. This allows the retained finance function to concentrate on their role as business partners, working more closely with the business to improve decision making.

Increased Innovation

Low value, non-core processes and activities are moved to an external provider. Companies can release internal resources to focus on more strategic activities – a key source of competitive advantage. Businesses that deploy an outsourcing model can shift internal resources from operations to innovation.