Financial Services Outsourcing: How Automation Can Drive Results
When your accounting and finance teams are overwhelmed and overworked because they are spending too much time doing manual work like processing invoices, it’s time for a change. Discover how financial services outsourcing could be the key to improving efficiency and keeping your business running smoothly.
What Is Financial Services Outsourcing?
Financial services outsourcing is a fancy way of saying moving accounting and finance processes to a third-party expert, typically overseas, to be performed by skilled workers at a significantly reduced cost. It is one of the world’s most prominent outsourcing strategies that many companies are adopting to help them optimize their accounting and finance departments.
Financial services that can be outsourced include:
- Accounts Payable
- Financial reporting
- Tax Accounting
- VAT services
Who Is Financial Services Outsourcing Right For?
In our globalized world, CFOs are increasingly choosing financial services outsourcing as a solution to their problems. Consider a London-based company with an in-house team of finance and accounting professionals who spend most of the day processing invoices or manually typing information from documents into a spreadsheet. These educated professionals are being paid an incredibly high rate to do a job that university students typically do to make some extra beer money. This is a perfect example of how outsourcing can create value for a company: it frees finance and accounting experts to focus on high-priority tasks to generate more value for the company.
Improve Business Results With Outsourcing
All companies must innovate to remain competitive. This requires research and weighing the pros and cons of each option to determine what is best for their business. A potential solution to their internal struggles that can drive transformational change and improve business results is outsourcing. According to Deloitte’s Global Outsourcing Survey, major reasons companies choose to outsource include cost-cutting, a focus on core business competencies, and solving internal capacity issues.
Put Finance and Accounting Teams First
It is becoming more prevalent for companies to outsource finance and accounting functions because of the tried-and-true processes that service providers offer. When your AP team is spending less time completing manual activities, such as processing invoices, it frees them up to perform more important tasks and also gives your company much-needed resources for:
- financial forecasting and planning
- stress testing
- procurement and logistics support
- supplier relationship management
- supplier contract negotiations
Let’s delve into some outsourcing options to see how to generate value for your company that manual work cannot.
Outsourcing Financial Services to Humans
Financial services work is often outsourced to an offshore provider in developing countries because it can offer its services at a lower rate. In most cases, this means humans take over the manual work that was previously handled in-house. Although these specialists are paid low wages, they are expected to perform at a high standard, regardless of possible language barriers and fatigue, increasing the likelihood of costly typos.
Contracts with such outsourced companies are under constant review. There are teams responsible for making sure reporting, SLAs, and the correct incentives or penalties are completed, met, and applied. Communication is key, and company and team leads need to be on the same page so no major mistakes are made. When processes are no longer under the same roof, there could be a loss of asset control, so mistakes that could have been caught right away might get flagged after it’s too late, or not caught at all, due to communication issues or time differences.
Breaking the Shackles of Manual Invoice Processing
If your company chooses to keep finance and accounting processing in-house it is obligated to hire qualified financial professionals. This is an expensive option that requires a considerable amount of training.
People aren’t perfect: mistakes are unavoidable, whether it is in-house or done through outsourced personnel. Just entering one wrong number or date into a spreadsheet or business system can create a chain reaction of problems that get progressively worse. This can lead to late, missed, or duplicate payments, strained vendor-customer relations, and late fees and penalties. Fortunately, there are alternatives that do not involve manual processing or data entry and require minimal human intervention.
Automated Alternatives to Manual Invoice Processing
According to Finance Monthly, “Nearly half (49%) of senior decision-makers in financial services organisations across the US and Europe listed ‘we prefer to use qualified experts’ among their top reasons for using a third-party technology solution, making it the top driver overall.” This proves just how important choosing a financial services outsourcing company that uses an automated invoice processing solution is for your businesses’ success.
An automated invoice data capture solution is also 6x faster than a human capturing the same data manually, which enables teams to focus on higher-priority, value-generating tasks.
See the difference for yourself:
Benefits of Automated Invoice Processing
The decision to outsource is made when the benefits outweigh the risks. When looking at your company’s internal processing, determine which processes need to be kept in-house and analyze what can be outsourced and to whom.
By choosing a financial services outsourcing company that uses an automated invoice processing solution, your company can benefit from:
- Cost reduction
- Risk reduction
- Value generation
- Better information sharing
- More actionable insights
Free Up Extra Costs
In business, you always need to stay one step ahead of your competition. This means cutting costs when necessary and sometimes making difficult decisions, all with your company’s best interests at heart. A good reason and high priority for picking an outsourcing company that uses an automated invoice processing solution is cost effectiveness since we’ve seen that it can lead to cost reduction.
Lowering overhead and operational costs can liberate your company from the expensive burdens of recruiting, hiring, and training experienced accountants. Instead, these professionals can be trained in just a few minutes and can start overseeing an automated invoice processing solution from day 1.
Automation Makes Everyone’s Lives Easier
As a human, making mistakes is inevitable. Whether learning a new process, or working on a task for the thousandth time, it is still possible to make tiny errors that can snowball into disasters.
With an automated invoice processing solution, this risk is mitigated because artificial intelligence is running the show and experts are making sure the software is up to date. Process delivery can become more efficient, thus freeing up humans to perform tasks that require more critical thinking. Boring invoice processing work was never meant to last in this increasingly technological world, and it’s about time a better solution took center stage.
Automated Processing Concern
A common concern when financial services outsourcing companies choose an automated, cloud-based invoice processing solution is security. In fact, major cloud services such as AWS, Microsoft Azure, and the Google Cloud Platform meet core security and compliance requirements. This means that your data is safely stored and easily accessible in the cloud.
The great thing about the cloud is that it is constantly improving so your data is always protected while making sure that you are compliant with privacy and security regulations. Cloud-based solution providers also have their own security measures to ensure your company data is always safe. You will have full control over your data and features can be customized to meet your own business needs.
Outsourcing With AI
Artificial intelligence (AI) and machine learning (ML) enable automation of formerly 100% manual tasks performed by your AP team. For instance, cognitive solutions can extract data from invoices and continuously learn how to interpret new invoices over time.
Choosing an outsourcing company that uses an automated solution like Rossum will free accounting and finance professionals from spreadsheet hell and deliver better results for financial services outsourcing providers. Instead, by using AI, trained staff can spend less time manually typing invoice data and can confirm the data in only a few clicks.
Integration Capabilities Are a Must-Have
When a financial services outsourcing provider is looking to expand its offerings, integration capabilities within its own systems are a necessity. When considering an invoice processing solution, FSOs need to figure out how to export the extracted data to their own platform. With an automated solution, this is made simple through APIs.
Rossum is easy to integrate into your enterprise resource planning (ERP) system, accounting software, and other business systems. It can export captured data directly into such systems, ensuring prompt invoice approval and payment.
Real World Perspective
For a financial and accounting staff, one of the most tedious and time-consuming tasks is manual invoice processing. Similar to a financial services outsourcing company, Business Process Outsourcing (BPO) companies act as third-party subcontractors that manage end-to-end business processes such as invoice processing. Rossum was able to act as the primary data capture solution for a BPO to replace over 1000 invoice templates and save over 30 days of managers’ time per year. By transitioning from manual processing to a cloud-based cognitive solution, costs decreased, while accuracy and speed of extraction increased.
CTO, Pavel Trnavský of Central European BPO, A-Scan, was impressed, claiming:
“Thanks to its intuitive interface, fast, error-free extraction, cloud hosting, and competitive price, Rossum is now our go-to invoice data processing solution.”
Time to Make the Switch
If we’ve piqued your interest, you are welcome to set up a Rossum trial account and see how automated invoice processing can work for your financial services outsourcing company. Try it free for less than 300 documents per month with no commitment. If you’re ready to take it to the next level, get in touch with one of our automation experts to discuss the next steps.