FREQUENTLY ASKED QUESTIONS
What is Finance and Accounting Outsourcing (FAO)?
FAO is the contracting out of a finance or accounting function that was once commonly performed in-house.
What are the different types of Finance and Accounting Outsourcing available in the marketplace?
There are many different ways in which firm outsource their finance and accounting functions:
- Off-site Outsourcing – The process of providing the Finance and Accounting Functional Outsourcing Services from a remote location. This service type will usually result in the most cost effective solution for companies that select a mature outsourcing vendor as it allows a company to leverage an Outsourcers investment in infrastructure, systems, personnel, and processes.
- Offshoring –This is the process of outsourcing a finance and accounting function to a company that performs these services in another country. This type of outsourcing is most effective when dealing with large volumes of repetitive transactions, mostly for Fortune 1000 companies. Most organizations utilize this method when cost savings is the primary objective.
- Onshoring or Inshoring – This is the process of outsourcing a finance and accounting function to a company in the same country.
- On-site Outsourcing – The process of providing the Finance and Accounting Functional Outsourcing Services by placing staff “on-site” at the client location. While this does allow for access to expertise, it is not generally the most cost effective method of outsourcing as it provides limited leverage of the Outsourcers investment in infrastructure and systems.
Why do organizations need Finance and Accounting Outsourcing?
Organizations outsource their Finance and Accounting Functions for a variety of reasons:
- Cost Savings
- Focus on Core Business
- Cost Restructuring
- Fixed Cost Operating Leverage
- Converting a Fixed Cost to a Variable Cost
- Quality Improvement
- Access to Talent and Expertise – Best People and Best Practices
- Scalability While Deferring Investment in Capacity
- Catalyst for change – Outsourcer becomes a Change Agent
- Reduce Time to Market
- Prepare Financial Infrastructure for M&A
Why work with a Best-of-Breed Vendor?
Rose Financial Services has deep, unmatched Finance and Accounting Outsourcing Expertise:
- RFS was ranked #11 on the 2010 List of Top 50 Global Outsourcers (Based on 30,000 responses to a Worldwide Survey of Users of Outsourcing Services)
- RFS was the #1 Outsourcer focused on Finance and Accounting Outsourcing.
- Over 20 years in the Finance and Accounting Outsourcing Industry
- RFS will design your Finance and Accounting System to ensure that your company is obtaining the full benefit of outsourcing
- RFS provides its clients with up to 45% costs savings over internally run Finance and Accounting functions
- RFS will ensure the system you implement will scale as your company grows in the future
- RFS will provide you with access to Best People and Best Practices
- RFS will ensure that you have a strong Finance and Accounting System that provides meaningful Financial Information that is timely and accurate
- RFS professionals will provide you with financial guidance and financial clarity
Will we lose our current investment in our ERP or Accounting system?
Investments in your current ERP or Accounting system are safe. RFS processes and workflow solutions integrate seamlessly with most ERP and Accounting systems.
What is Unique about RFS’ Finance and Accounting Outsourcing Solutions?
RFS’ solutions are unique because they provide our clients with a cost effective and scalable system that provides them with financial clarity. RFS provides full and partial outsourcing solutions that give our clients both a strategic and tactical advantages.
What are the typical benefits, ROI and time to payback?
- Financial clarity results from financial information that is timely and accurate
- ROI is usually realized immediately as most of our clients reduce their costs between 25%-45% from their current accounting systems.
Which stakeholders in my organization are affected by and benefit from Finance and Accounting Outsourcing?
- Executives and management of your organization will receive better and more timely reporting and information.
- Shareholders will benefit from the cost savings. RFS will get accounting and finance out of the way of a company’s growth!
- Vendors and client relationships will improve as a result of high “customer service” levels in the accounting functions.
How long does it take to transition to a finance and accounting solution managed by RFS?
It will take 30-45 days from our kick-off call until RFS is able to manage the finance and accounting functions assigned to RFS. We can generally assume transactional support within the first 7 – 10 days of an engagement.
Do I need to keep any finance or accounting staff in place after the transition to RFS?
We can adjust the scope of an engagement to support existing accounting and finance staff or to assume all of their responsibilities. When RFS assumes responsibility for a finance or accounting process, the client’s responsibilities associated with that function transition to administrative support or managerial approval.
Do we need to change any accounting systems or software?
We support a wide variety of ERP/accounting software. Generally, there will be no need to switch to another accounting software unless it does not meet the needs of your organization. In addition, we can work with your existing systems including your current payroll providers, time and expense systems, etc.
What types of organizations work with RFS?
We work with government contractors, non-profits including associations and public charities, and commercial businesses including technology firms, professional services organizations, manufacturing and distribution companies, and U.S. subsidiaries of international firms. Our clients range in size from start-ups to $100+ million in revenue.
Not sure which services you need?
Learn more about our finance and accounting solutions and how RFS can add the most value to your organization.
What is Financial Management?
Financial management is the support associated with the Chief Financial Officer (CFO) and finance department of a company. These services primarily involve looking into the future by converting a business plan into a budget or financial model and helping a company manage its plan. CFOs provide management and the board with financial clarity and visibility into the financial results—why they occurred and what can be done to improve financial performance in the future. These services include financial oversight, financial trend analysis, cash management, debt management, board and management reporting, dashboards, benchmarking, budgeting and forecasting.
What is Accounting?
Accounting is the process of converting financial transaction data into accrual based financial reports that are utilized to report financial performance to management and other stakeholders. This process includes reviewing and overseeing accounting transactions, ensuring that an organization has an adequate internal control structure, a month-end closing process which converts transaction data to an accrual basis and a financial and management reporting process that gives meaning to all of the financial information.
What are Financial Transactions?
Financial transactions include accounts payables and cash disbursements to vendors, billing and cash receipts from customers, payroll to employees and equity from shareholders. A properly configured accounting system will ensure that there is an adequate internal control structure in place, that transactions are posted contemporaneously with their execution and that only properly approved transactions are executed.
What’s the Difference Between Bookkeeping and Accounting Outsourcing?
The posting of financial transactions is often associated with the tasks that a bookkeeper performs. Keep in mind that Bookkeeping is the processing and recording of financial transactions after they have already occurred. In the vast majority of cases, bookkeepers do not build and maintain adequate internal control environments, putting organizations at risk for material errors and irregularities or fraud. While bookkeeping occurs reactively, accounting outsourcing occurs proactively. When this is accompanied by meaningful accrual based financial statements that are timely and accurate, the risk of material errors and irregularities decreases significantly. While bookkeeping creates some financial visibility, a properly designed and managed accounting outsourcing solution improves financial performance through financial clarity.
What are Internal Controls?
Internal controls are the financial controls an organization puts in place to ensure financial transactions are properly coded and approved. A properly functioning internal control structure is critical to ensure the accuracy of a company’s financial statement.
Are all Accounting Outsourcing Solutions Equal?
There are three methods in which accounting outsourcing solutions can be delivered:
1) Shared Service Center Model – This method is a full-service accounting outsourcing solution that provides all accounting functions an organization will need from a centralized offsite location. This model allows for the strongest internal control structure, proper supervision and oversight of accounting staff and the best opportunities for long-term cost-effectiveness.
2) Disbursed Workforce Model – This method allows for home based workers to support clients remotely. This provides for lower labor and overhead costs but can create unexpected internal control weaknesses, challenges related to supervision and oversight of staff. This model tends to be geared towards a bookkeeping model.
3) Client Site Support Model – This method puts staff onsite at the client office. This method is generally not cost-effective and results in a weakened internal control structure as it tends to put too many task in the hands of one key onsite accountant. Many of the risks of maintaining an internal accounting department remain with the client as turnover of this key staff usually results in significant loss of the client knowledgebase.