Finance Accounting Outsourcing is a Successful Business Strategy

Finance is one of the most important units of an organization and it is the responsibility of the firm to handle this task very cautiously. The world is advancing with new technologies and so you need to keep your businesses updated with the new advancement. Today you will come across various new methods that are meant to make business boost. So if you are really serious about your business then you need to keep it modernized with marketing techniques that keeps changing from time to time in the market. The business owners are under tremendous pressure to cut costs of their finance department. They are making strategic plans to add value to their thus increasing their productivity and profitability. And so finance accounting outsourcing has evolved to make the business run efficiently.

Today there is enough demand in the market for the finance accounting outsourcing services and the business owners are looking for this to make it a part of their business strategy. Indeed, the task of accounting is not an easy thing, it needs a lot of dedication and effort to make accounting task to be done very efficiently. Finance accounting outsourcing is a marketing technique that helps the firms in making his accounting task easier. Every other business is looking for this strategy because this technique has given many businesses huge popularity. Not only this, even they have made themselves profitable by this technique. An unprofitable business has become profitable while a profitable business has expanded its wings to different cities and countries.

Finance accounting outsourcing contains various tasks from maintaining treasury back-office services, bookkeeping, general ledger, tax computation and filing, data entry, spreadsheet and others. Finance accounting outsourcing services delivered by a vendor can make you assure of getting the highest level of professionalism, accurateness, timeliness, and most of all the quality work. For doing all these tasks, the vendor provides highly experienced professionals who work efficiently and seriously on your given task. They are trained staffs who are prepared to cater according to your business requirement.Hence, you can shed your tension and you need not to bother about anything. You can relieve on the vendor and can transfer your entire accounting task to them. They will take utmost care of your data by providing high security to it as they are important for your business.

Any business needs strategic plans, a good effort, time and resources to work smoothly in the long run. You need to look after each and everything department from sales, marketing, customer service, administration and others. Every department has to be managed properly by you to keep a constant growth of your organization. No matter how large or small your organization is, you need to keep a regular watch on it. If you have in-house employees then it may be little heavy on your pocket as you will have to bear some extra expense for them. In order to make more saving, you can adopt finance accounting outsourcing as a business strategy. Outsourcing your finance task to an offshore destination will give you a better service. They know the importance of client and they understand the importance of such an important task.

Is Your Accounting Or Finance Department Measuring Up Or is it Down For the Count?

Accounting is a methodology by which a company or financial entity measures, discloses, or provides assurance about the financial information of a company that may be used to act as an aid to managers, investors, tax authorities and other decision makers to reach decisions regarding resource allocation. Financial accounting is a branch of accounting that throughout history has required processes to record, classify, summarize as well as interpret and communicate all financial information concerning the business. In other words one can think of accounting as being the “language of business” and accounting forms as the medium upon with that language is communicated.

The heart of accounting is the measurement of financial transactions that are meant to transfer the legal property rights that are performed through contractual relationships. Accounting specifically excludes non-financial transactions because of the need for conservatism as well as principles of materiality. Persons that practice accounting are known as accountants and it is necessary to have a number of different professional bodies that are formed by accountants all across the globe. There are titles given to different accounting personnel such as Chartered Certified Accountants, Chartered Accountants, and Certified Public Accountants.

The use of accountancy methods allows companies to create accurate financial reports and accounting forms that are of great help to managers, regulators, shareholders, creditors and owners. When the day-to-day business transactions are recorded in the books of the company, the method used is known as bookkeeping. The heart of the modern financial accounting system is called the double-entry bookkeeping system.

Double-entry bookkeeping systems require at least two entries for each transaction, one being a debit and, the other a corresponding credit. It is imperative that the sum of all debits exactly equals the sum of all credits and, if it does, then it is a promising sign that the entries have been properly recorded. Such a system first found use in medieval Europe, though some claim that it was practiced much earlier in Ancient Greece.

To get into the profession of accountancy, one would need to attain certain qualifications based on the country in which they intend to practice. An accountant needs to be licensed by a number of organizations, mostly at the state and country level although it is not always a legal necessity for an accountant to be a paying member of any one of the institutions and bodies that are in the business of providing such licenses.

There are different types of accountancy including cost accounting, cash-basis and accrual basis accounting, financial accountancy, fund accounting, internal and external accountancy, management accounting, project accounting, positive accounting, environmental accounting and social responsibility accounting. In addition, accounting principles, rules of conduct and actions can be described with the help of different terms like concepts, conventions, tenets, assumption, axioms and also postulates.

An oft cited criticism of accounting is that it has not changed much and there is need for affecting reforms to keep up with the changing business needs and because of the need to keep accounting relevant to changes in capital assets or production capacity. That is not to say that the basic principles will change; for these should be independent of dynamic economics. Of late, there has been deviation in accounting from economic principles that has ended up with controversial reforms being affected in order to make financial reports more pinpointing of economic realities.

How to Evaluate Your Finance Department

Nobody knows your business better than you do. After all, you are the CEO. You know what the engineers do; you know what the production managers do; and nobody understands the sales process better than you. You know who is carrying their weight and who isn’t. That is, unless we’re talking about the finance and accounting managers.

Most CEO’s, especially in small and mid-size enterprises, come from operational or sales backgrounds. They have often gained some knowledge of finance and accounting through their careers, but only to the extent necessary. But as the CEO, they must make judgments about the performance and competence of the accountants as well as the operations and sales managers.

So, how does the diligent CEO evaluate the finance and accounting functions in his company? All too often, the CEO assigns a qualitative value based on the quantitative message. In other words, if the Controller delivers a positive, upbeat financial report, the CEO will have positive feelings toward the Controller. And if the Controller delivers a bleak message, the CEO will have a negative reaction to the person. Unfortunately, “shooting the messenger” is not at all uncommon.

The dangers inherent in this approach should be obvious. The Controller (or CFO, bookkeeper, whoever) may realize that in order to protect their career, they need to make the numbers look better than they really are, or they need to draw attention away from negative matters and focus on positive matters. This raises the probability that important issues won’t get the attention they deserve. It also raises the probability that good people will be lost for the wrong reasons.

The CEO’s of large public companies have a big advantage when it comes to evaluating the performance of the finance department. They have the audit committee of the board of directors, the auditors, the SEC, Wall Street analyst and public shareholders giving them feedback. In smaller businesses, however, CEO’s need to develop their own methods and processes for evaluating the performance of their financial managers.

Here are a few suggestions for the small business CEO:

Timely and Accurate Financial Reports

Chances are that at some point in your career, you have been advised that you should insist on “timely and accurate” financial reports from your accounting group. Unfortunately, you are probably a very good judge of what is timely, but you may not be nearly as good a judge of what is accurate. Certainly, you don’t have the time to test the recording of transactions and to verify the accuracy of reports, but there are some things that you can and should do.

Insist that financial reports include comparisons over a number of periods. This will allow you to judge the consistency of recording and reporting transactions.
Make sure that all anomalies are explained.
Recurring expenses such as rents and utilities should be reported in the appropriate period. An explanation that – “there are two rents in April because we paid May early” – is unacceptable. The May rent should be reported as a May expense.
Occasionally, ask to be reminded about the company’s policies for recording revenues, capitalizing costs, etc.

Beyond Monthly Financial Reports

You should expect to get information from your accounting and finance groups on a daily basis, not just when monthly financial reports are due. Some good examples are:

Daily cash balance reports.
Accounts receivable collection updates.
Cash flow forecasts (cash requirements)
Significant or unusual transactions.

Consistent Work Habits

We’ve all known people who took it easy for weeks, then pulled an all-nighter to meet a deadline. Such inconsistent work habits are strong indicators that the individual is not attentive to processes. It also sharply raises the probability of errors in the frantic last-minute activities.

Willingness to Be Controversial

As the CEO, you need to make it very clear to the finance/accounting managers that you expect frank and honest information and that they will not be victims of “shoot the messenger” thinking. Once that assurance is given, your financial managers should be an integral part of your company’s management team. They should not be reluctant to express their opinions and concerns to you or to other department leaders.

Why Finance Recruiters Are an Important Part of Your Hiring Strategy

When you need to fill positions within the finance department, it is important that you create a hiring strategy. Finance recruiters will be able to help you fulfill the strategy entirely so that you can focus on other areas of the business. If you are responsible for all aspects of hiring, you will find that the process is going to take considerably longer – and this may not be something that you can afford.

Your hiring strategy needs to consist of such things as:

a sufficient job description
a large pool of candidates to choose from
a list of desirable skills
knowledge of the industry
various ways of listing the job opening
a timeline

Executing the hiring strategy is going to take knowledge of the hiring process, as well as multiple people to help you. You cannot be responsible for creating the job description, creating job opening listings around the area, compiling all of the resumes, and conducting interviews. It simply cannot be done because you have other responsibilities within your organization.

Finance recruiters will be able to streamline the process because it is their business. They are responsible for recruiting finance individuals all the time and therefore they already have a lot of the work done for you. They have a timeline that can be customized for you, they have job descriptions that can be tweaked for your organization, and they most likely have a large pool of candidates that they can already begin pulling from.

By working with professional finance recruiters, you can make short work of hiring a qualified individual for your organization. Regardless of the actual job position that you need to hire for, a recruiter will be able to find you someone quickly so that you can get them started right away.

The longer you leave a job position open, the more strenuous it is going to be for the others within the department. For example, if you need someone in the Accounts Receivable department, everyone else is going to work longer hours and have more on their desks because you are short one person. If you begin to stress all of your employees out for too long, you may be looking for more than just one person because others will get tired of picking up the slack and leave the organization as well.

Finance recruiters will simplify the process, expedite the hiring process, and find you qualified candidates. They are familiar with the skills needed within the finance industry and can tell the difference between someone who has skills and someone who has a polished resume. This will work to your advantage. So that you can feel confident in the person that you ultimately offer the job position two.