Due to the growing economic instability and decline in profit margins in most industries around the world, the management strategies of companies are now solely focusing on increasing efficiency and on generating significant cost savings. Business process outsourcing as a strategic tool has been accepted as one of the most effective means to achieve these twin goals. Most companies now consider finance and accounting outsourcing as an important part of their outsourcing strategy. Some recent studies and surveys highlight the following:
• An independent survey estimated that Software and Services export revenues expected to grow over 16-17% to reach USD 62 billion by FY 11 with FAO being the second largest area of outsourcing
• The Finance and Accounting Outsourcing (FAO) market in 2010 is expected to resume a growth trajectory more similar to pre-recessionary levels, moving towards 20 percent and reach nearly US$3.7 million in annual contract volume (ACV)
Common Activities outsourced in Accounting
The most common activities in this area include:
• Record to Report (e.g., general accounting and reporting, forecasting and planning, banking)
• Procure to Pay (e.g., invoicing, travel and expense)
• Order to Cash (e.g., order processing, credit and collections)
While cost reduction would remain the primary driver for finance and accounting outsourcing, a study suggests that global finance executives also appreciate the ability to gain sharper focus on core competencies. Thirty-two percent of the respondents said outsourcing was instrumental in increasing the business productivity of the finance staff and allowed their organizations to access best-of-breed talent and technology.
Some of the key benefits of outsourcing are as follows:
• Cost savings-Outsourcing reduces staffing costs by 30 to 70%, reducing the overall net processing costs by 20 to 50%. Good accounting firms are equipped with state-of-the-art infrastructure, innovative technology and professional expertise to handle custom projects in their branch of specialization. As a result, you are not only saved from making costly investment, but also get the benefit of professional expertise at a price most of the developed countries cannot offer
• Greater leverage-Buyers have access to supplier leverage gained from infrastructure sharing and process consolidation
• Improved reporting-Outsourcing could also improve service delivery, enhance process accuracy and increase the speed of reporting
• Achieve strategic business value- According to a recent study, half of the total respondents indicated that FAO is viewed as a tool to address both operational and strategic F&A needs
Buyers generally achieve the benefits they seek from their FAO implementation, particularly relative to reducing cost and using savings to fund F&A transformation efforts
The role of outsourcing in driving profitability has increased significantly in the current economic scenario. Organizations that adapt outsourcing will not only lower their operating costs but gain significant competitive advantage within their industry.
The Procurement function often reports directly into the Finance Department. One issue Finance people often have is how to measure the performance of these Procurement people. Here are some questions that Finance executives can ask their Procurement staff to test whether or not they are getting value for money.
What answers would you give?
1. What cost savings have you achieved in the last year – 20%, 30%, 50% or more?
2. Have you made any radical changes to your supply chains in the last 12 months? How as it improved service and/or lowered costs?
3. How do you challenge your suppliers’ prices? Are negotiations and competitive tendering your only tools?
4. Do you systematically and regularly collect data on the total cost of acquisition and use of the things you buy? How do you use this information?
5. How does the rest of the organisation view the procurement department? Do they see it as adding a true competitive advantage?
6. What do your suppliers think of the way you deal with them? How do you capitalise on this?
7. Are you the first organisation that your suppliers come to with new ideas? What radical innovations have they brought to you in the last 12 months?
8. What % reduction have you achieved in your supply base this year? How does this support your business strategy?
9. How many people are involved in procurement in your organisation? Is this too few, too many or just about right?
10. Does anyone outside the Procurement department commit your organisation to expenditure with suppliers? if so, how do you make sure that money is spent wisely?
11. How do you know if your procurement people have the right mix of skills and experience for your business? Do you benchmark roles, responsibilities and abilities?
12. How do you go about updating the skills of people in procurement? Do you have a programme in place to meet the requirements from a training needs analysis?
13. It has been said that the best form of buying is not to buy in the first place. How do you challenge demand for purchased goods and services in your organisation?
14. How do you challenge the specification of the things you buy?
15. Do you have a structured process in place to systematically improve your supply base?
16. Do you know where all of your supply bottlenecks and risks are? Do you have a disaster recovery plan in place?
17. How do you measure the improvements your people make to business performance? Do you benchmark this and identify any gaps?
18. When was the last time you reviewed your processes and procedures? Do they still support the ways in which you need to work? Do they ensure that “best in breed” ideas and practices are applied consistently by all buyers?
19. Is your IT system capable of giving you all the information you need to manage Procurement?
20. You have Procurement under control. Quality and delivery are good and costs have been reduced. What do you do next? Do you have a vision and plan that has been agreed by the business?
How well do you think you and your colleagues would fair if your Financial Director asked these questions of you?
If you are an executive in the finance industry then you have probably worked with an executive search firm at some point. Finance industry recruiters work specifically with companies needing to hire executives in the finance industry. They screen candidates ahead of time so that the business doing the hiring can focus on detailed interviewing. Finance industry recruiters have specialized knowledge of the best companies and positions in the field.
It’s quite common for recruiters to approach executives who are already employed, hoping to lure them into a better position. However, with the finance industry having taken a hit in the past few years due to the economy, there are also many unemployed executives looking for work.
What qualifications are recruiters most interested in as far as the current business climate is concerned? You might be surprised. While technical skills are very important in any field, recruiters are focused on finding executives who can manage people and work well with many different personalities. Interpersonal skills are at the top of the list for that reason. Company employees are sensitive to new management that isn’t able to merge with the business atmosphere.
Other things recruiters are looking for are:
Finance is a volatile industry. Executives need to be confident leaders, willing to make essential decisions without hesitation. Yet they also need to be able to work with a team. It’s a delicate balance.
Financial services recruiters monitor social media sites as part of their searching process. It’s essential for executives to have a social media presence. That means updating your profile on a regular basis, and joining online industry groups and organizations.
Unfortunately lack of ethics has proven to be the downfall for many executives. Companies need to be assured that their executives are not going to do anything that will end up embarrassing them and their shareholders.
There are things you can do to increase your chances of finding a position through a recruiter.
1. Ask contacts for an introduction. Busy recruiters may not notice you if you don’t make the first move.
2. When you do make an appointment to speak, make it a face-to-face meeting, not a phone call. You want them to remember you.
3. Prove yourself to be a good communicator, but don’t over share. This isn’t your buddy – whatever you say can be shared with a future employer.
4. Never go over the recruiter’s head. Always work through the recruiter or you are going to end up with a terrible reputation.
5. Stay in contact even when you have a position. You will be more successful with a long-term relationship than having to start at square one.
The financial industry recruiters and Willis Consulting have jobs available now in the financial services industry. Contact them today to learn more about how they can help you get the perfect job.
If your car insurance is due for renewal and you are considering buying another policy then this article will provide you with important facts that you should know about. Car insurance policies are getting increasingly expensive and you should do all that you can to reduce your costs. How much you have to pay for your car insurance is dictated by a variety of factors as they apply to you and your vehicle.
In this article we will examine coverage limits, your age, gender and marital status, your location and insuring other household members. All of these factors will have a great influence on how much you will have to pay for your policy.
Coverage limits are generally dictated by the price that you are willing to pay for your insurance. A higher level of coverage will generally result in higher premiums. The best way to find a good value policy is to comparison shop. Nowadays it is generally accepted that the best way to do this is by using a car insurance comparison website.
Your age, gender and marital status will have a great effect on the auto insurance rates that you are offered. Insurers rate drivers using a variety of criteria, if you are a young single male driver you will usually have to pay higher rates. If you are a middle-aged female married driver then your rates will be lower. Insurers calculate the best car insurance rates for you by comparing levels of risk. Those groups which are statistically more likely to be involved in an accident have to pay correspondingly higher rates.
Location plays an important part in deciding how much your premiums will cost. Drivers who live in an urban environment will usually pay more than those from a rural area. This is because drivers who live in cities and heavily populated areas are more likely to be involved in an accident, or to have their car stolen or vandalized. Insurers generally offer better rates if you’re able to demonstrate that you keep your vehicle in a garage at night. You may also be able to improve the security arrangements of your automobile by fitting an alarm, immobilizer and steering wheel lock.
Insuring other household members will have an influence on the cost of your policy and the best car insurance rates that you offered. If you have teenage family members living with you and they are added to your policy, then your costs will increase. This may still work out cheaper than if your teenage driver were to have a separate policy in their own name.
In conclusion, there are a variety of different factors which can affect your ability to be offered the best insurance rates. Some of these are coverage limits, how old you are, whether you are male or female and whether you are married or single. Your rates will also be affected by the area where you live and whether other household members are included in your policy.