Over the last decade, it has been observed that financial leads of leading global corporations have become comfortable with outsourcing elementary aspects of their financial planning process. However, even today, there’s some resistance in outsourcing other, more convoluted processes like Financial Planning and Analysis. But some of the biggest names across industries are setting the ball rolling and exploring FP&A outsourcing as an option to reduce costs and enhance efficiency and hence develop an edge over the competitors.
While there are some complications associated with outsourcing Financial Planning and Analysis, new-age financial advisors have effectively developed efficient capabilities to make FP&A outsourcing a favourable option for corporations. Financial planning and analysis processes need more expertise and knowledge than most other financial planning functions, which is why it requires more expensive resources and takes up a large number of man-hours. This is what gives major potential in outsourcing and standardizing the Financial Planning and Analysis process.
One of the biggest cause, why organizations used to forestall outsourcing financial planning services was that most of these processes require a close relationship between business leaders and users; moreover, they’re based on judgement and hence need close attention. However, service providers have now effectively dealt with these obstacles. They have procured highly experienced talent with relevant knowledge of the FP&A processes. These certified FP&A professionals are completely capable of offering financial planning services to marquee clients.
These factors have made it clear that Financial Planning and Analysis outsourcing will become a more standardized practice in the industry over the next few years, and businesses will seek to achieve greater savings and elevated efficiency.
What follows is a rundown of a few benefits that make outsourcing FP&A activities the next significant perimeter for business processes.
The last few years have seen some reservations associated with outsourcing Financial Planning and Analysis. However, now many businesses have gained significant benefits by outsourcing this process. FP&A is amongst the most expensive processes for an organization due to expensive resources, the customized nature of the work, and decentralization. Outsourcing these processes and centralize the workflow and eradicate redundancy by bringing about standardization.
In addition to this, decentralized FP&A processes, with analysts operating in the exact geographical location as the business, would mean that the business is not optimizing the cost footprint in the most effective manner. Labour arbitrage in low-cost locations can be a great source of cost savings. This is where outsourcing can be incredibly beneficial.
Aside from this, decentralized FP&A processes with professionals operating in the same geographical location would mean that the business is not effectively optimizing the cost footprint. As a solution, labour arbitrage in low-cost locations should be an excellent source of financial saving, and this is where outsourcing can be beneficial.
One of the clearest reasons for outsourcing FP&A practices is that the experts working for you will have extensive experience in their respective domains. A qualified professional with years of experience in working on a wide variety of projects will be able to provide effective solutions and identify the ideal models to solve the problems at hand. These experts can use their past failures and successes to understand what would work for your business.
In other words, these certified FP&A professionals will utilize their previously derived knowledge and avoid making significant mistakes and make beneficial decisions for your business. In addition to this, these experts will also know what to do in different scenarios and allow you to solve your business issues cost-effectively.
Financial Planning and Analysis practices are usually quite technical. This is why you require a large team to perform these tasks. Moreover, these professionals need to be well-versed with different technical aspects of the practice and have particular skill-sets, making it hard for them to multitask or cross-function with other teams. This is why it is a better idea to outsource FP&A services and reduce the in-house workforce.
Outsourcing these services is also a great option in the case of one-off projects. Suppose your business wants to take up a new project that requires FP&A services; it’s better to bring in an outsourced team for these services as opposed to hiring a whole new set of employees. This will eradicate the risk of liabilities and allow you enough time to gauge the return-on-investment on that project. Aside from this, outsourcing would also ensure that existing employees are not overburdened with extra work.
Finally, while your organization might have an existing CFO, financial advisor and head of finance, they wouldn’t be able to make time to take up smaller, less significant tasks. In such a scenario, outsourcing can be a great way to provide part-time assistance to the CFO or other financial heads. Through outsourcing, you can easily execute tasks that require little brand know-how and the ones your workforce cannot currently take up.
Financial Planning and Analysis, unlike most other services in the financial planning process, has two timeframes – single and continuous. This means that there can be financial planning and analysis services that your business requires regularly or those that you require on a one-time basis. These services could include whether it’s beneficial to enter a new sector, risk analysis of an upcoming project, or any other one-off project. Outsourcing can be a great option for both of these frameworks.
We at TRC Corporate Consulting extend a vast range of financial planning and analysis services. Our offerings are customized to suit your business's requirements, and our certified FP&A professionals & financial advisors have the expertise to deliver quality insights that can aid you to take your business to new heights and meet your financial and business goals. Contact us to know more about our financial planning services.
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