“Don’t ever let your business get ahead of the financial side of your business. Accounting, accounting, accounting. Know your numbers” – Tilman J. Fertitta
Overview Of Outsourcing Financial Services For Staffing Companies: Key Considerations And Benefits:
One of the key elements of running a business is accurate financial reporting. Without accurate reports, how are you supposed to grow your staffing company, keep on top of payroll, and ensure compliance with governing laws and regulations? You need an expert in business finance, but not every business needs one permanently. Outsourcing accounting services is the best way to meet your company’s financial services needs and simultaneously save costs.
When you outsource financial services you immediately have access to service providers who specialize in staffing companies. You can be certain that your finances are managed by experienced professionals who will ensure absolutely every i has been dotted and each t has been crossed.
We’ll take a look at some of the biggest advantages of financial services outsourcing, including improved efficiency and streamlined business processes to maximize ROI and drive your staffing company forward.
Discussion Of Outsourcing Financial Services For Staffing Companies: 8 Key Considerations And Benefits
Financial management outsourcing has eight key benefits, which we’ll look at in more detail below.
1) Cost Savings
Employees cost a lot of money. There are salaries, benefits, taxes, training, paid vacations, etc. Every time that you don’t have to employ someone new, especially a highly qualified specialist, you save a fortune. That’s the beauty of outsourcing. You get the services you need at a fraction of the cost.
Some more ways that you save by not employing in-house staff include:
- No advertising expenses
- No time wasted interviewing and training new employees
- No additional salaries
- No need for extra office space
- No additions to your IT infrastructure, including purchasing financial management software and upgrading hardware
An additional benefit that you might not have thought of is the dent in payroll fraud that naturally occurs when all the work is offsite. Employers don’t really like to think that their employees are dipping in the piggy bank, but at least this way you don’t have to waste time and money investigating cases and trying to recover losses.
2) Expertise and Efficiency
Outsourced financial service providers employ experts who specialize in specific niches, like staffing companies and nonprofits. These experts, together with advanced technology, provide a level of accuracy and efficiency that you might not be able to source otherwise.
Outsourcing payroll services is particularly popular, partly due to the time-consuming and complicated nature of payroll management, which includes:
- Payroll processing
- Accounts payable
- Accounts receivable
- Tax compliance
- Financial reporting
3) Scalability and Flexibility
One of the biggest problems with software packages is the inflexibility. You buy the product and you get all its features. The result is that you could pay for features you don’t need, and the package might not include features that you do need. You might have to purchase another package and pay again for features you don’t need. The cloud has changed all that.
Cloud-based service providers use software that is scalable and flexible so you can add or remove features you need according to fluctuations in your business. This makes downsizing simpler by disposing of some internal HR and labor processes. It makes upsizing simpler when it comes to drafting employee contracts, induction and training, and additional payroll management.
4) Focus on Core Competencies
A finance department or a single financial manager eats up valuable resources that could be better used elsewhere. Financial services outsourcing for staffing companies frees up these resources so that your company can spend more time and effort on your core processes, including:
- Talent management
- Client meetings
- Business development
- Strategic objectives
- Client satisfaction
More energy can be spent working the marketplace to find new clients and candidates, which boosts placements and revenue growth.
5) Compliance and Risk Management
There’s pressure on financial managers to always be current with industry regulations and national labor laws. When you outsource your financial services, this responsibility rests with the service provider. It’s a responsibility they take seriously because their reputation will suffer untold damage if they slip up and their clients are penalized for noncompliance.
Outsourced service providers’ responsibilities include:
- Knowledge of the latest regulations and how they affect compliance requirements
- Use of industry best practices
- Reduce risks resulting from noncompliance with tax and labor laws
- Knowledge of upcoming developments
- Creating and implementing change management strategies to facilitate transitions
6) Advanced Technology and Systems
Technology advances at such a rapid pace that what was cutting edge a few months ago is outdated today. It’s virtually impossible for staffing companies to keep up and that puts them at a disadvantage. Outsourced service providers, on the other hand, keep pace with software evolution, and the resulting benefits are passed on to their clients.
These benefits include:
- Streamlined processes
- Improved accuracy
- Enhanced data security
- Real-time financial insights
- Real-time reports
- No hardware updates that increase vulnerability to system breaches and compromised data
You can find out more about choosing the right accounting software, such as Sage Interacct ERP, on our blog.
7) Improved Data Security
Outsourced financial service providers constantly strive to provide the best data protection possible. In fact, you should only choose providers that have a 98 – 100% track record for keeping clients’ confidential data safe and secure.
Even if they have a 100% record, however, you should still ask them about their policies regarding data security and what measures they have in place should a breach occur. Make sure you understand their terms and conditions regarding data breaches and legal accountabilities.
At least they should have insurance so that in the event of a lawsuit, clients are protected.
8) Enhanced Reporting and Analysis
Comprehensive financial reporting is essential if you want to make good business decisions. Real-time reporting and analysis are even better because it provides current information that enables you to make informed decisions quickly should the need arise.
The real-time data and financial reports, along with the input from an experienced financial service provider enables you to identify short-, medium-, and long-term problems, and design solutions to prevent or mitigate potential damage.
Other benefits include:
- Financial planning, especially when it comes to planning capital against operational expenses and liabilities.
- Insight into cash flow for daily operations
- Reporting tools that provide data on your company’s financial performance
- Reporting and analysis to identify trends that drive insightful decisions
- Improved financial management
All of these benefits, and others besides, give you all the information and insight you need to stay a couple of steps ahead of other staffing companies.
Conclusion and Final Recommendations
Your staffing company is unique. Your needs are unique so you need financial services that suit your situation – and which don’t cost the Earth. Outsourcing your financial services is the answer. You enjoy all the benefits of a full-time financial manager without the associated costs, like salaries and IT infrastructure.
However, it can be tricky to choose the right service provider. How do you tell the genuine article from fly-by-night operations? One way is to look at their service level agreements. Are they airtight or do they have more holes than Swiss cheese? Don’t be afraid to ask questions if you want clarification on certain points. They should be happy to answer clearly, without any ambiguity.
While you’re going through your list of possible outsourcing service providers, ask yourself, do they meet your specific needs? Do they fit your ethos?
Find out if they are open to a test run to determine how easy it is to communicate potential issues and to have the issues acknowledged and addressed.
Finally, you must be able to envision a satisfactory business relationship that will optimize your financial management, provide insightful data for informed decision-making, and ensure your company always complies with governing laws and regulations.
Outsourcing financial management, payroll, and other financial services gives you a leg up in a competitive industry. While service providers are taking care of the financial side of your business, you can get on with extending your market and boosting revenue.
You can find out more about the benefits of cloud-based accounting software for your staffing company on our LW-I blog.
Staffing companies seeking to outsource financial services can significantly enhance their operations with Sage Intacct. This advanced accounting software offers customizable modules that seamlessly integrate with LWI’s financial services. By outsourcing financial services and leveraging Sage Intacct, staffing companies can experience benefits such as streamlined financial processes, accurate reporting, and enhanced decision-making. Trust in the combined expertise of LWI and Sage Intacct to optimize your financial operations and drive success in the staffing industry.