An effective way to focus on growing your software/technology business is to turn over your company’s finance functions to a trusted outsourcing partner at a reduced cost. A virtual finance department might be the most important step you take in cutting down costs in your business. Outsourced finance departments can supply companies with a higher quality and quantity of work at less of the cost. Technology supports both parties – the business and the outsourcing agency – with powerful communication tools.
When you outsource your finance functions, what does it really mean? What are those functions to be exact and why would you be better off outsourcing? Let’s take a closer look at this.
Finance Functions to Outsource
A technology, IT or a software business is a human-intensive one. The core of running a technology business is in its Project Management. The relationship between you and your clients will mostly be contractual in nature with detailed plans laid out for deliverables.
This process involves keeping track of financial records, accounts, verifying the accuracy of the processes followed for all financial transactions. Bookkeepers are known to perform general accounting duties. When you outsource bookkeepers, the savings can be quite noticeable. Why? You no longer have to hire an in-house accountant. You can simply outsource this function to a bookkeeper and employ him as and when necessary. Not all technology businesses experience a slew of transactions every day. You can always find proficient bookkeepers who are able to contribute to your company’s growth by aligning their own work with your business goals.
You are likely to have teams across multiple geographies operating under different taxation and payroll rules. You may even have a large number of employees that generates a lot of activity for your payroll processing team. This team needs to constantly coordinate with the bank for the timely processing of salaries, overtime payments, and leave.
This function is also responsible for churning out a considerable number of reports in a timely fashion. They need to stay on top of new software and laws in their function.
Once outsourced, you can be at peace knowing your key financial responsibility is in safe hands without having to invest in a separate department. The outsourced finance department will have specialists who are knowledgeable, reliable, and forward-thinking to manage payroll. You can now hire people remotely with a professional level of expertise at an affordable price.
Accounts Payable Processing
This function expects a high degree of accuracy from its team members for maintaining ledgers, securing financial information, and preparing the requisite financial reports. The level of expertise needed for this function, for any technology business, might be of a greater level. For your finance department to employ an expert with substantial experience, it might turn out to be more expensive than outsourcing this function. Once you outsource, the team manages the entire flow of information accurately. You can find a team member with great experience in this area combined with someone with lesser experience to process the other needs of the department and, thus, save on the huge cost of hiring different kinds of team members.
Accounts Receivable Processing
This is an area for a very specialised role that needs people with the right skill, knowledge, and experience to fill out. Team members will be processing payments that are in conjunction with the company’s financial policies as well as all other external financial laws. It requires someone to manage daily collections and computing, posting and verifying all accounts receivables data, whether from the asset side or debit side.
Working with an outsourced finance department will give you access to experienced professionals as and when you need them. Your project management schedule and your business plan/annual budgets will be easy to follow for any outsourced finance partner for the management of receivables.
Overall Financial Controllers
Finance controllers are in charge of maintaining financial records and the processing of income and expenditure. They work primarily in groups and ensure seamless collaboration with project managers from different departments and geographical locations. As you can imagine, this can get quite cumbersome for a technology/software business. Now, by outsourcing a labour-intensive role like this, you can stay focused on your core business and values. By collaborating with an outsourced partner for financial controlling, it allows you to stay on top of your data without the hassle of managing it yourself. Outsourcing this function can help you create a growth partner for your business.