Trends in outsourced Finance and Accounting services in UK
The UK is one of the pioneering countries to introduce and benefit from outsourced finance and accounting (F&A) services. It is projected that nearly 93% of industries in the UK will be using outsourced F&A services in some form or another in the near future. According to a recent survey, 28% of companies indicated that they would be increasing use of outsourced services, while 65% said they would be maintaining the same levels as they have used to date.
F&A services can be broadly classified under two categories: one with repetitive processing of high volume and low complexity and the other with higher complexity but generally low volume. Processes such as accounts payable, accounts receivable, payroll and taxation involving large volumes of transactions of a repetitive nature fall into the first category, whereas activities such as budgeting, costing, MIS, data analysis and trend analysis fall under the second category.
Outsourcing can take place either onshore within the country or offshore. Quite often the accounting firms that offer such outsourced work onshore in turn outsource a good amount of work themselves, freeing up their time to ensure quality and better client relationships.
Improving efficiency by getting such work done by experts with the right processes in place is one of the key reasons for outsourcing. Cost reduction is another distinct advantage, which is achieved to a high degree through outsourcing without compromising on quality. Outsourcing companies are also in a position to bring in expertise through well-developed tools, industry experience and analytics and so offer significant advantage to end clients.
The quality of services provided by the companies offering outsourcing is met through development and implementation of quality systems in document flow, processes and controls via certification from any of the leading standards bodies. Certification under ISO 9001, for example, confirms that clients keen to outsource their services can be assured of the high quality of the output provided. Such companies usually also set up good security and confidentiality practices that encompass all areas relating to premises, people and infrastructure. With a robust security system in place they are in a position to meet the guidelines of ISO 27002 and offer high levels of confidence to clients who may have concerns about safety and security of data and loss of control of their information.
A number of outsourcing service providers in India have a deep understanding of the UK GAAP accounting regulations, along with capability for cloud computing through well-established IT teams and good communication structures. They are in a position to provide high-quality F&A services to UK accounting firms and manufacturing and service companies.
Some providers offer a flexible pricing model with volume-based commitments where the outputs, such as number of invoices accounted or paid, are priced separately, which ensures that the end client knows the volume of output for the agreed pricing and timescale. Service providers with expertise in specific domains such as handling accounts payable, right from the receipt of materials or services to the final reconciliation with the vendor, can offer their skills along with high-end tools development.
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