The strategic advantage of outsourcing accounting functions

April 2024

Outsourcing can be defined as “the business practice of hiring a party outside a company to perform services that were traditionally performed in-house by the company's employees and staff”.

Businesses of all sizes across the globe are constantly seeking ways to streamline operations, enhance efficiency and reduce costs. One strategy which has been gaining traction over the years is outsourcing certain functions such as the accounting function. This has emerged as a transformative approach for business to thrive in today’s competitive landscape.

According to a recent PwC Survey conducted by more than 2,000 respondents,

"Top-performing organisations are turning to a more strategic set of managed services partnerships to access talent and technology, with the goal of not only reducing costs but becoming faster and more innovative. As the need to transform accelerates, organisations adopting this approach are developing a competitive edge that will be hard to beat."

Beyond the back office: How managed services partnerships drive outperformance

Benefits and considerations

Accounting is a function that has been increasingly outsourced to experienced service providers who possess expertise in various areas of financial management and reporting due to complex ever-changing financial reporting requirements. Accounting professionals remain updated on the latest regulations, accounting standards (locally and internationally) and leading technology trends which enables businesses to benefit from enhanced and accurate insights. With access to these various skill sets, companies can make more informed decisions, maintain their compliance obligations and achieve better business outcomes.

By outsourcing accounting functions, businesses can focus their time, energy and resources towards core business objectives and strategic initiatives. Allowing for the day-to-day responsibilities to be handled by third-party providers ultimately would support companies in strengthening their financial foundations whilst maintaining a strong focus on growth and long-term success.

Whether experiencing rapid growth, implementing ad hoc projects within the business or dealing with temporary staffing shortages, outsourcing provides businesses with the flexibility to adapt to these changing needs in a short period, allowing them to respond quickly to market opportunities, mitigate risks and maintain a competitive edge.

Outsourcing eliminates the need for hiring, training, and managing an in-house accounting team. By relying on the specialised skills of external accounting professionals, companies can streamline their operations which would often also lead to significant cost-savings.

Final Thoughts

In conclusion, outsourcing certain functions of a business can emerge as a strategic solution for businesses seeking to thrive and keep up with today’s dynamic market. By benefiting from streamlined operations, having experienced professionals in the field who are continuously keeping themselves abreast of any developments and having access to advanced technologies, businesses can position themselves for sustainable success.