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Finance outsourcing: digitally transforming the mid-market

27th Jun 2023
Brought to you by
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Xledger is a leading provider of next-generation cloud-based finance software. 

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Accelerated by the pandemic, technology is driving new efficiencies in businesses – sometimes changing the very way they operate.

Finance outsourcing: digitally transforming the mid-market
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It’s been CEOs, CTOs and CIOs who have often been at the forefront of such change, but now CFOs and finance directors are emerging as leaders in this space. Where once their role was largely focused on historical performance and compliance, CFOs are increasingly forward-looking and instrumental to strategic business decisions.

The technological developments of the past few years have enabled CFOs and their teams to deliver insights that inform those decisions. Cloud platforms, like Xledger, provide secure, anytime/anywhere access to the real-time workings of business finances, while a cultural shift since the pandemic has brought remote teams far more into the mainstream.

And while outsourcing was previously seen as a strategy reserved for only the largest businesses, it is now being adopted by the mid-market as a route to greater efficiency and growth.

The global finance and accounting business process outsourcing market was reportedly valued at USD $56.42 billion in 2022, and is expected to expand at a rate of 9.1% from 2023 to 2030.

Meanwhile, in a 2022 EY survey, 62% of CFOs and SFEs said they planned to increase co-sourcing for select finance and tax activities; 96% expected the technical competencies of their finance teams to be augmented with process, data and technology skills.

Here’s why we believe outsourcing could be your next step to digital transformation.

Benefits of outsourcing for finance teams

A lean, scalable department

Outsourcing certain roles and tasks gives you a leaner team, capable of focusing on more strategic thinking; thus elevating your position and value in the business.

Innovation is more important than ever, and by freeing up time and energy from the “business as usual” work and adopting more technology in your department, you are ideally placed to innovate.

Outsourcing is also an effective solution for businesses that are scaling up. It allows you to add or remove capacity with relatively little hassle compared to an in-house team.

Reduce recruitment and management stress

With fewer positions to keep staffed in-house, it means less stress on finance team leaders to fill them. This is especially true in the difficult recruitment market we have seen since the pandemic. The Institute of Chartered Accountants reported that there was a 36% drop in applications for accountancy posts between June of 2021 and 2022.

And with a smaller team comes fewer distracting people management issues, such as the arm wrestle of getting staff back in the office or coping with the record wave of staff sickness absence the UK has been experiencing of late. GPs signed some 10.7 million fit notes in the 12 months to December 2022.

Benefit from outside expertise

When outsourcing, you are not only gaining an extra resource. You are also plugging yourself into a broader base of experience from a team, or business, with wide knowledge gained from servicing dozens or hundreds of other businesses. Equally, you can benefit from expert partners who specialise in your market. This can be useful for learning new processes or best practices, and having a resource which you can tap into when you want some expert external opinion or need further strategic support.

Things to consider

While the benefits speak for themselves, there are a few things you’ll want to consider.

These include which roles you will outsource. You have a lot of flexibility here; how the outsourced team will liaise with your leaner department; how you manage any incumbent employees and resistance to change – you could upskill them to help you perform higher value work or reposition elsewhere in the business; and how compatible certain processes are with a remote team.

Outsourcing for growth

With a proven pathway for outsourcing, and cloud software that already has all the functionality to facilitate a remote team securely (functionality that will only get more powerful over time), the moment to embrace digital transformation in finance teams is here.

Our specialist accounting and financial management software could help your business to do this. To find out how, book a demo; or contact Phil Chalmers on [email protected] to learn more.