A “How to Choose” article may sound a little contradictory right off the bat. Isn’t any choice too personal to be assisted with? This line of thought might hold water in any other field, but startups and business owners need all the help they can get when they opt for offshoring. Offshoring financial services, in particular, is such a crucial part of any business. Everyone needs help understanding how to go about it.
Transferring finance-related tasks, like bookkeeping, payroll, and tax compliance, to teams in other countries is slowly becoming a popular strategy for reducing costs and accessing skilled professionals without compromising work quality.
However, finding the best finance offshoring partner is not that easy.
This article will delve into finance offshoring, why it has transformed the global business landscape, and how to choose the best offshoring partner for your business. We’ll also look at the benefits of building an offshore team instead of outsourcing to a third-party provider.
What is Finance?
The management of money (including saving, investing, borrowing, lending, budgeting, and forecasting) is called finance. Every business, big or small, relies on strong financial management to succeed. Tracking expenses, preparing financial reports, and preparing insights based on these reports are essential to a company’s ability to make informed decisions and grow.
Traditionally, companies handled their financial tasks in-house.
But, globalization and the consequent rise of technology drove businesses to look for ways to reduce costs and improve efficiency. This is where finance offshoring comes into play.
How Offshoring Has Changed the Finance Industry
Offshoring has transformed the way businesses manage their financial operations.
There are many low-cost countries where finance talent is easy to access and work with. Shifting finance-related tasks to teams in countries where labor costs are lower, yet the skills are equal to or even superior to local talent, is a win-win decision. India, the Philippines, and Eastern Europe are popular destinations for offshoring finance functions because of their solid educational systems and large pool of qualified professionals.
However, offshoring is not just about cost-cutting; it also opens access to specialized expertise, faster turnaround times, and better scalability.
Why Finance Offshoring Can Boost Your Bottom Line
Financial services are one of the most expensive processes in business operations. You may end up paying high prices for low-quality work or compromising deadlines to look for local hires. Both can be damaging to your business.
Offshoring finance services is one of the best ways to improve your company’s operations and bottom line without sacrificing work quality. Here’s why:
1. Cost Efficiency
Let’s be real for a moment: hiring finance professionals in countries where the cost of living is lower helps businesses save on labor costs, and to all companies, this is a top advantage. This doesn’t mean compromising on the quality of work. Many offshore locations have highly skilled finance professionals capable of handling complex financial tasks.
2. More Expertise
Access to a global talent pool is an underrated advantage. Finance professionals in India and the Philippines are trained in international accounting standards, tax laws, and financial reporting. Offshoring helps companies leverage this talent without bearing the costs of hiring locally.
And this talent can offer better and more improved services as well.
3. Increased Efficiency
Depending on the country’s time zone to which the services are being offshored, businesses can run their operations 24/7. Time zone differences between the US and India allow work to continue even after the home office closes. Tasks like payroll processing, reporting, and audits are completed faster.
4. Scalability
Whether you need to add more accountants during tax season or expand your financial team as your company grows, offshoring means having the flexibility to adjust your team size without worrying about infrastructure or overhead costs.
Tips for Choosing the Best Finance Offshoring Partner
Deciding to offshore finance operations is a process in itself. We’re not here to tell you that you cannot do it alone, but locating expert talent in another country and closing the deal with them is a tough ask for most companies. Finding the right offshoring partner is essential to ensure the success of your finance operations. Here are the key tips for choosing the best finance offshoring partner for your business:
1. Look for Specialized Finance Expertise
Many providers offer offshoring for various industries, but not all have in-depth expertise in finance. Choose a partner that understands the intricacies of finance, including international accounting standards, tax compliance, financial reporting, and auditing. Your offshore team must be able to handle the complexities of your financial operations.
2. Check for Compliance with Local and International Regulations
Finance is a highly regulated field, and compliance is a non-negotiable. Your offshoring partner must have a thorough understanding of both local and international financial regulations. They must be familiar with the laws in their home country and the country where the offshore team is located. Ask about their experience handling compliance issues and how they ensure that all regulations are followed. If there have been any discrepancies in the past, ask them how they solved those issues.
3. Evaluate the Quality of Talent
The success of offshoring depends heavily on the quality of the team. Ask about the hiring process of your offshoring partner, the qualifications of their team members, and their training programs. Most partners will be transparent and communicative throughout the hiring and team-building process, and you will have 100% control over the hires. Ultimately, you want to ensure that the team managing your financial operations is experienced, knowledgeable, and capable of meeting your needs.
Work with a partner who invests in continuous training and development for its talent pool. This will ensure your offshore team stays updated on the latest financial trends, technologies, and regulations.
4. Consider the Technological Infrastructure
Finance operations rely on specialized software and secure technology. If you are offshoring your services to a different country, the guide must be able to equip the team with the systems they will need to work efficiently. Ensure that your offshoring partner understands the necessary technological infrastructure to handle your financial tasks. This includes financial software, cloud-based systems, and strong data security measures to protect sensitive financial information.
The offshoring guide must know the daily levels of sensitive data financial analysts handle. Make sure they are compatible with your systems to make the transition seamless.
5. Assess Data Security and Confidentiality
Financial information is highly sensitive, and any breach can result in significant losses and damage your reputation. Ensure that your offshoring partner can facilitate the imposing of data protection measures, including encryption, secure servers, and access controls.
The hired analysts should be knowledgeable about international data protection standards like GDPR. It’s also a good idea to ask for details on their disaster recovery plans in case of a cyberattack or other data breach. Of course, this is standard for all industries, but data safety and recovery would take precedence over streamlining operations in a finance environment.
6. Focus on Communication and Collaboration
Keep an eye on the communication protocols your partner has in place.
Can the team provide regular updates on your financial operations? Project management software, video conferencing, and instant messaging can help bridge your onshore and offshore teams.
It would be best if you also assigned a dedicated account manager or project lead as your contact point for your offshoring project. It should be a two-way street at all times.
7. Flexibility and Scalability
Your financial needs will change over time.
As your business grows, you might need to scale up during tax season or add more team members. Your offshoring partner should be able to adjust accordingly.
A flexible partner will allow you to grow your offshore team without disrupting your current operations.
8. Request Client References and Case Studies
Ask your potential offshoring partner for client references. Have they built remote finance teams before? Do they have case studies demonstrating their ability to handle teams specializing in finance operations?
Also, look for companies that have successfully offshored finance services in industries similar to yours.
This will give you confidence that they can deliver the results you need.
9. Plan for Long-Term Collaboration
Offshoring is not a short-term fix.
Plan a long-term partnership with your offshoring provider. Your partner will be able to perform better with a deeper understanding of your business and financial needs. Not only will you have better results over time, but you will also have access to another market and be able to have better savings.
Look for a partner that is committed to building a lasting relationship.
Why Building Offshore Teams is Often Better than Outsourcing
Many businesses assume that outsourcing to a third-party provider is the only option. However, building your offshore team is often a better choice. Here’s why:
Greater Control: You maintain complete control over your financial operations. You decide who to hire, what processes to follow, and how the team works.
Better Integration: An offshore team can be integrated into your company’s structure because of better communication between onshore and offshore teams.
Tailored Solutions: Your team is your team. They are dedicated to creating solutions for you. The limitations of a third-party provider do not bind you.
Conclusion
Each tip in this short guide should be measured against your specific needs.
Can a one-person team be hired? Absolutely.
Can you work with a twenty-person offshore team? Why not?
The range of solutions differs, which is why a DIY approach is not practical. Choosing the best finance offshoring partner should be undertaken with caution because it is critical to your finance operations.
You can find a partner offering the right expertise, technology, and flexibility. To people who are confused and frustrated with the process, InCommon provides a helping hand. We have experts with experience building high-performance finance teams, and our ideas are just a click away. Creating your offshore team can offer more control and better integration, helping you make the most of your offshoring experience.
