After all the hustle and bustle of SSO Week, and the subsequent event-related blog posts, this week we are back in the F&A saddle again! Here are a few recent articles that explore various accounting, finance and outsourcing hot topics. Enjoy! (Feel free to tweet us or follow us @Sutherland_iBPO continue the conversation.)
A new study, Benchmarking the Accounting & Finance Function: 2014, by the staffing firm Robert Half and the Financial Executives Research Foundation, the research affiliate of Financial Executives International, found that 59% of U.S. and 66% of Canadian companies are still reconciling accounts manually. “What’s striking is the continuing high percentage of companies that rely on manual reconciliation of accounts—some with thousands of general ledger accounts,” said Robert Half senior executive director Paul McDonald in a statement. “There is a significant opportunity for these firms to streamline the close and use their resources more efficiently.”
Read: Accounting and Finance Compliance Burden Expected to Rise
Outsourcing Is Your Fairy Godmother
HR Director states that “the back office is the Cinderella when it comes to workforce optimisation, with the majority of companies trying to make do with spreadsheets, front office solutions or simply doing nothing at all.” The three main challenges to change are: finding software that is fit for purpose to support improved operations management, legacy IT systems and staff resistance to change and being monitored.
Read: Back office “the Cinderella” of department
Invest in Productivity
Worker productivity growth — the increase in output per hour worked — has averaged less than 1% per year since 2011. However, employer output per hour, the yardstick for worker productivity, dropped at a 1.7 percent annualized rate in the March quarter.CFO.com reporter, Vincent Ryan, notes that Bloomberg Businessweek says one of the reasons is U.S. companies aren’t investing in their workers, i.e., helping them do things they “were never able to do before,” by avoiding or delaying spending on things like equipment, software and structures that workers need to increase output. (From Sutherland’s POV, F&A departments also need to consider acquiring technology like Robotic Process Automation to help increase employee productivity and engagement.)
Read: Weak Capex, Low Productivity Growth Linked
Putting an End to the Runaround
A recent article notes that the average small British business now spending two weeks a year chasing overdue bills. The result? More and more are looking to outsource Collections as it is an attractive, cost-effective option. The Director of Finance article points out that all sizes of business are affected by late payers and debt that seems difficult to collect. Since the downturn in 2008 the problem of bed debt has accelerated and it has become a real threat to the profitability of some companies.
Read: UK Finance Directors Urged to Take Pain Out of Late Payment Chasing
Latin America Leads the Way
Latin America is hot-hot-hot when it comes to outsourcing activity according to a new report from Grant Thornton. The latest international business report (IBR) notes that outsourcing is widely prevalent in Latin America, with more than 50% of business leaders outsourcing their back-office functions. In the rest of the world, there’s a little more work to be done. The study notes that with the corporate world increasingly focused on freeing up cash tied to business processing, two in five business leaders globally have already outsourced their back-office functions or are planning to do so.
Read: Study: More Than Half of LATAM Business Leaders Outsource Back-Office Work