Financial shared services help businesses reduce costs

The value of business process outsourcing and IT outsourcing is expected to increase this year, according to research firm TPI.

Part of this outsourcing market is financial shared services, which means that a business relies on an in-house provider for its support functions, the Financial Times reports. Many CFOs rely on finance and accounting outsourcing to reduce costs and administrative burdens.

Financial shared services helps businesses implement new technologies without having to purchase it themselves. This removes some of the financial burden from companies as technology investments can be costly.

Simon Tennant, head of finance consulting at PA Consulting Group, told the source that CFOs are beginning to take on more strategic responsibilities and that outsourcing certain solutions allows them to focus on value-added work. While outsourcing accounts payable has the potential for significant savings, the number of errors, such as duplicate payments, often increases as employees who are not as familiar with the organization's business processes take over. Companies that hire a third party accounts payable recovery audit firm or use duplicate payment audit software in addition to outsourcing will be better equipped to minimize lost profits.

A recent survey by Accenture shows that more than 40 percent of CFOs increased their use of financial shared services and an additional 40 percent plan to do so in the next 18 months.  

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