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Outsourced financial services implies using a third-party service provider that acts as your own financial team. This service provider handles all or some of the financial processes of your business depending on your needs — from bookkeeping, account reconciliation, financial data analytics and taxes to CFO services. Outsourced financial services can help you streamline your financial and accounting operations while benefiting from significant cost savings.

Businesses use outsourced financial services for these benefits:

• Reduced cost. When you outsource your financial tasks, you don’t have to pay the same salary or benefits as you would if you had hired an in-house employee to handle the finance functions. This can significantly reduce your overhead costs and increase profit margins. Additionally, you only pay for the work that’s done.
• Security and confidentiality. Because finance and accounting are their core products, a finance services partner ensures that your information remains confidential and secure. You can ask them to sign a non-disclosure agreement for your peace of mind.
• Access to experts and new technologies. Partnering with a dedicated financial services provider generally provides you with a higher level of experience and expertise than in-house employees can provide. This can be beneficial if you need specialized financial skills, or expertise that isn’t readily available in your area or country.
  Additionally, an outsourced financial services solution partner gives you access to cutting-edge technology and systems, which your growing business couldn’t otherwise afford.
• Stay abreast of the latest policies. A specialized finance outsourcing company will always stay updated with the latest compliance and financial policies and other accounting rules.
• Improved efficiency and decision-making. Outsourcing helps free up your finance team to look beyond transactional activities, and focus on resolving risks and pursuing opportunities as well as value-added activities.
• Scalability. An outsourced financial solution gives you access to a larger pool of finance talent and resources, which can help your business to scale up quickly — with just a minimal incremental increase in costs.
• Round-the-clock service. When you outsource your financial functions to a third party, you can keep your company operations running 24/7 with a time-zone advantage. You can rest assured that all major tasks will be completed according to schedule and on time.

These three essential business practices are ideal to outsource:

1. Accounting and bookkeeping
2. Human resources and payroll
3. Risk management and insurance planning

By outsourcing these tasks to a qualified provider, you can free up valuable time and resources while feeling confident your financial records are accurate, timely and compliant.

Financial and accounting services is the most common financial outsourced service.

Yes! A specialized accounting outsourcing firm can give you back time and peace of mind by taking care of such back office functions as finance and accounting so you can focus on growing your business. It also allows you to enjoy benefits including cost savings, security and confidentiality, access to the latest tech tools, among other features.

Monitoring the performance of an outsourced finance and accounting company is important for any business, to ensure that the work is being done effectively and efficiently. You can follow these strategies to monitor performance:

1. Clearly determine the deliverables, goals, as well as key performance indicators (KPIs) for the outsourced company, to build a framework against which to assess performance.
2. Keep lines of communication open to stay updated on their progress, which may include discussing current projects, addressing any concerns, or evaluating their overall performance.
3. Define quantifiable metrics such as accuracy and timeliness of financial reports, reduction in errors, adherence to budgetary guidelines, or improved efficiency in financial processes.
4. Regularly review the financial reports provided by the outsourced firm.
5. Perform periodic audits of the financial records and processes to ensure accuracy, compliance, and integrity. This can be done with the help of an independent auditor or even internally.
6. Connect with internal stakeholders who interact with the outsourced team, such as department heads or executives, to get feedback on areas that need improvement.
7. Track and compare key financial indicators, such as operating cash flow, gross profit margins, and financial ratios, with historical data or industry benchmarks to pinpoint significant deviations that require attention.
8. Ensure there is a mechanism in place to address issues and concerns promptly.