subject: Baselining is a Must Before Embarking on a Finance and Accounting Outsourcing Program [print this page] Baselining is a Must Before Embarking on a Finance and Accounting Outsourcing Program
There is a lot of written material on how to undertake finance and accounting outsourcing, when to outsource, what to outsource among other how-to guides'. One area that needs immediate attention is measurement of performance' before a company outsources its finance and accounting processes. In the process of transitioning the processes of one of the leading companies in the U.S., I was surprised to find how the accuracy of transactions had never been measured. And it was not alone... there are many companies, which measure the throughput of finance and accounting transactions, but not the accuracy.
Most companies never really measure the service levels of their internal finance and accounting function. For example,
most companies will not know the turnaround time associated with their processes, simply because their enterprise
resource planning software is not capable of measuring the same. So when the CFOs of these companies consider
outsourcing the finance and accounting function, it becomes challenging for them to define what the service levels should
be. Defining what delight is' becomes difficult.
Companies could consider setting standards before outsourcing the finance and accounting function, and make it
imperative for the service provider to improve from this baseline to the defined standards. In other words, it would be
the beginning of walking down the path of further improved processes, compared to what the internal team was
delivering. To my mind, this will also lead to the business case for finance and accounting outsourcing to be achieved
faster.
The other is that companies should ask the providers to constantly benchmark their processes to the best in the
industry. Since the provider works for multiple clients across different industry segments, it should have industry
benchmark data, which the company can benchmark itself against. This will again help the finance directors internally
demonstrate benefits of finance and accounting outsourcing.
