baselining is a must before embarking on a finance and accounting outsourcing program

1 Baselining is a Must Before Embarking on a Finance and Accounting Outsourcing Program By Adam Husbands There is a lot of written material on how to undertake finance and accounting outsourcing, when to outsource, what to outsource among other ‘how-to guides’. One area that needs immediate attention is ‘measurement of performance’ before a company outsources its finance and accounting processes. In the process of transitioning the processes of one of the leading companies in the U.S., I was surprised to find how the accuracy of transactions had never been measured. And it was not alone... there are many companies, which measure the throughput of finance and accounting transactions, but not the accuracy. Most companies never really measure the service levels of their internal finance and accounting function. For example, most companies will not know the turnaround time associated with their processes, simply because their enterprise resource planning software is not capable of measuring the same. So when the CFOs of these companies consider outsourcing the finance and accounting function, it becomes challenging for them to define what the service levels should be. Defining ‘what delight is’ becomes difficult. Companies could consider setting standards before outsourcing the finance and accounting function, and make it imperative for the service provider to improve from this baseline to the defined standards. In other words, it would be the beginning of walking down the path of further improved processes, compared to what the internal team was delivering. To my mind, this will also lead to the business case for finance and accounting outsourcing to be achieved faster. The other is that companies should ask the providers to constantly benchmark their processes to the best in the industry. Since the provider works for multiple clients across different industry segments, it should have industry benchmark data, which the company can benchmark itself against. This will again help the finance directors internally demonstrate benefits of finance and accounting outsourcing. Related content The emerging plug-and-play model in Finance and Accounting Outsourcing Click to read more [+] Which Areas Should You Begin Your Finance And Accounting Outsourcing (FAO) Journey With? Click to read more [+] http://www.wns.com/blogs/FinanceAndAccountingServicesOutsourcing H Hwns.com – Insights – Blogs – Finance and Accounting Services Outsourcing

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Page 1: Baselining is a Must Before Embarking on a Finance and Accounting Outsourcing Program

Baselining is a Must Before Embarking on a Finance and Accounting Outsourcing Program By Adam Husbands

There is a lot of written material on how to undertake finance and accounting outsourcing, when to outsource, what to outsource among other ‘how-to guides’. One area that needs immediate attention is ‘measurement of performance’ before a company outsources its finance and accounting processes. In the process of transitioning the processes of one of the leading companies in the U.S., I was surprised to find how the accuracy of transactions had never been measured. And it was not alone... there are many companies, which measure the throughput of finance and accounting transactions, but not the accuracy.

Most companies never really measure the service levels of their internal finance and accounting function. For example, most companies will not know the turnaround time associated with their processes, simply because their enterprise resource planning software is not capable of measuring the same. So when the CFOs of these companies consider outsourcing the finance and accounting function, it becomes challenging for them to define what the service levels should be. Defining ‘what delight is’ becomes difficult.

Companies could consider setting standards before outsourcing the finance and accounting function, and make it imperative for the service provider to improve from this baseline to the defined standards. In other words, it would be the beginning of walking down the path of further improved processes, compared to what the internal team was delivering. To my mind, this will also lead to the business case for finance and accounting outsourcing to be achieved faster.

The other is that companies should ask the providers to constantly benchmark their processes to the best in the industry. Since the provider works for multiple clients across different industry segments, it should have industry benchmark data, which the company can benchmark itself against. This will again help the finance directors internally demonstrate benefits of finance and accounting outsourcing.