Showing posts with label risk management. Show all posts

6 Qualities of the Best Accounting Outsourcing Firms

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Undoubtedly, partnering with accounting outsourcing firms has made finance-related tasks easier for a lot of businesses. In fact, 90% of finance and accounting business process outsourcing (F&A BPO) engagements are reported to meet their initial delivery performance and cost-reduction targets.

From the mundane jobs such as outsourced bookkeeping to the more complex ones like risk management service, BPOs have provided more time for businesses by taking these tedious tasks from them. This allows companies to focus on more important business matters.

Because of the clear benefits of outsourcing, it is only natural that companies seek its service. However, while BPO services are advantageous, it can also backfire if you don’t conduct research carefully about your prospective outsourcing partners. For instance, incompetent firms may cause trouble with miscalculated employee payrolls, or worse, have the Bureau of Internal Revenue haunting you for filing late tax reports.

Although these problems are really troubling, they can be completely avoided. Save yourself from future headaches by checking out the qualities to look for in the best accounting outsourcing firms.

Offers Reasonable Price


Competitive price is an important factor to consider when choosing an accounting outsourcing firm, but it should not be the sole basis in your decision-making. Cheaper price may sound good and enticing, but it does not necessarily translate to the best firm. Low-cost services shouldn’t stop at being inexpensive; it should also be able to provide quality and efficient processes at the same time.

Efficient Processes


According to a Forbes article, simplified and standardized F&A processes result to more information, more service, and more cash. When deciding which firm to choose, you should seek how their process works, and if they have the expertise in creating process that can provide you with more competitive advantages.

Impressive Track Record


Long and proven track record matters for businesses. When dealing with prospected firms, ask how long they have been operating, and the number of clients they have partnered with. Experienced BPOs have more likely dealt with issues concerning the tasks, and know how to avoid them in the future. The track record does not only ensure you are working with a seasoned service provider, but it also guarantees you are in safe hands.

Specialization in Complex Tasks


Different firms offer different services. As someone who lacks expertise in accounting, you are looking for a firm that is an expert not just in standard accounting, but also in the more complex branches of the job. It should be adept in outsourced bookkeeping, and at the same time be able to handle financial analysis, risk management service, and other complex tasks.

Aside from specializing in complex tasks, the best outsourcing firms should also be flexible. They should be able to catch on the latest trends in the industry, and meet their partners’ requirements and the changes in the state’s conditions.


Promotes Security


Dealing with financial information is a sensitive and crucial matter. Hence, your service provider should be able to secure their systems from external threats. They must be able to show how they are managing and securing information, in compliance with ISO 27001 standards. A certification to the said standard is also a good sign that you are working with a reliable accounting outsourcing firm.

In addition, since confidentiality issues may arise while doing business with BPOs, it is better to choose firms that are willing to sign a Non-Disclosure Agreement (NDA).

Values Transparency


Immediate access to your financial data is important, therefore, accounting outsourcing firms should be able to give that to their partners. Having knowledge on using cloud-based service software should help ensure that you are getting your data anytime and anywhere you need them.

While problems are part of every business, it does not mean that you should face those head on when you can totally avoid them. You wouldn’t have to suffer from failed outsourced bookkeeping tasks just because you’re not careful enough in choosing the best service provider. Taking note of the qualities above should let you screen prospective firms better and make more informed decision to help your business achieve success.
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Cash Management: The Heart of Risk Management Services

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Risk management and like services would not become an industry nor a field if it were not for the unpredictable nature of financial investiture. Financial investiture is summarily closer to planting seeds than raising livestock—you can always get a healthier chicken to breed with your hens so you can yield more eggs but you can’t be sure how many and how sweet the apples will be until after a couple of years. That’s why risk management services are so important and that’s why cash management is your best weapon to reduce financial risk.

When talking about risk reduction, “financial” is almost always affixed. It is always in the context of money. In a constantly evolving industrial world, how do you get by managing financial risk for your company’s betterment?

Risk < Reward

There is such a thing as cost effective risk reduction (CERR) and its basic working principle is that no risk = no reward. Taken bluntly, it might look counterproductive to what we’re trying to do, i.e. reduce risk but investments and risks are the heart of innovation and discovery. Businesses continually have to invest in advertisement to be known, in technology to be enabled, and in manpower to stay in business and all these investments are risks. It’s only just a matter of reducing risk—never evading them—that makes the differentiating margin between reward and loss.

Cash Flow Prediction

You will know when a business is succeeding or at least has found stable footing when it has more incoming cash than it has expenses. That’s exactly what cash flow management is all about: balancing collections, income, and accounts receivable with disbursements & accounts payables. Cash flow prediction is more concerned about imbalance in that it needs to know how much you are going to need to pay so that you can predict how much more you’re going to need to make to be able to carry one with future plans. Also called financial forecasting, it might be one of the most important risk reduction mechanisms to make sure that you have the money you need as you go into risk. So what if you go into risk and it doesn’t go as well as you’d hope?

Contingency Fund

After you’ve accounted for how the best scenarios of your investment may play out, risk management services and cash flow prediction considered, you now have to prepare for the worst. After you’ve steered your company’s ship into stormy seas only to find nothing but high winds and no treasure, a contingency fund will paddle you back into calm and stable shores of liquidity. If investing is, in itself, investing in risks, a contingency fund is an investment in safety. A contingency fund does not only work when you need to make a risk so even without any immediate plans to make an investment, you can start on a contingency fund already.

Whether you are a small or medium business doesn’t matter—investiture is a risk you are going to have to take if you are going to make more money and do not want to stay in a limbo of stagnation. Risk management and cash flow management will be your left and right hands to help you break through a bigger market moving forward.
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