The Case for Outsourcing F&A Processes Right after a Merger or Acquisition

The Case for Outsourcing F&A Processes Right after a Merger or Acquisition

If there was one activity that truly slowed down during the recession, it was Mergers and Acquisitions (M&A). The golf

course grapevine had less on its plate, simply because during recession, buying and selling companies have very different

expectations. But that will soon see a change as businesses are turning around and the initial results of 2010 indicate an

upswing.

Beyond doubt, the CFO has it the toughest during a merger or an acquisition. There are reams of financial data to be

mapped and aligned. One business may follow a 4/4/5 calendar, while the other might not. One might define a certain

expense as SG&A, while the other might define it completely different. And the complexities rise, when it is a cross-border

merger or acquisition. There are different accounting standards to adhere to and currencies to compute. The challenges

during an M&A are three-fold: Ensuring a smooth transition so that there is uniformity in processes; adherence to statutory

compliances and consolidation of accounts.

Outsourcing Finance and Accounting (F&A) processes right after you complete the merger or acquisition is a smart option

because the third-party service provider understands F&A processes and can bring in competencies that can augment the

in-house capabilities very well. There are three critical areas that a provider can step into:

Data Gathering: By virtue of having the scale and level of skill required, a provider can effectively gather all the F&A

data to be aligned during a merger. Provider teams can work cross-location to ensure that the alignment is done in

the shortest time possible and yet, deliver the highest quality required of it.

Data Integration: Provider teams can map the nuances of accounting followed in the two companies and integrate

them seamlessly to provide a single instance for the leadership team.

Data Consolidation: Once the data gathering is done accurately and integrated, it is time for consolidation and

reporting. Provider teams have the strength of best practices when it comes to reporting. A provider's understanding

of various accounting systems and standards can surely bring in the required order and control into an organization's

F&A processes.

And the provider can deliver all the above, while also delivering cost efficiencies. Remember, if you had already

outsourced your F&A processes to a provider, then all the above would be handled by the provider seamlessly during the

hectic activity.

WNS has extensive experience in conducting due diligence of F&A processes developed from transitioning over 650

programs for more than 200 clients globally. This expertise helps our clients during an M&A in developing plans to

streamline processes and also transferring processes to its centers if the customer chooses to outsource these functions.

Our recent experience was indeed challenging, when we transitioned work for a large US-based insurance customer that

has operations in 40 countries and uses 25 different accounting standards, from all those locations into a single one.

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