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F&A BPO: What to Outsource and What to Retain

3/25/20 5:52 PM / by Fabiana Corredor

Fabiana Corredor

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F&A BPO

CFOs who think outsourcing means packing up their department’s entire roster of duties and shipping them overseas never to be heard from again need to reassess the current state not just of outsourcing, but of the evolving role of the Finance Department. In reality, companies are never fully outsourcing their entire finance organization, but just the more transactional processes that are in fact holding them back from focusing on forward-looking analysis and business decision support.


According to a recent KPMG report, organizations outsourcing finance are on average outsourcing 38% of their processes, which represents an increase of 81% versus 2013.

Based on our experience working with hundreds of CFOs across all industries and sizes, the average finance department that has not outsourced is spending more than 75% of its time on transactional or also called “value-preservation” activities. If you breakdown all of the activities that these finance teams are currently performing, each activity will fall into one of these 3 main buckets:

  • Value-Preservation Activities: Activities that are routine, rules-based, repetitive and process driven. Generally these are lower value add, easier to transition to a Shared Services or BPO model, and provide the most immediate return on investment.
  • Value-Creation Activities: Activities related to gathering and analyzing business information, critical thinking, influencing skills and driving business. Functions that perform decision support activities are more difficult to transition to a Shared Services or BPO model because they involve a higher degree of judgment and knowledge of the business. 
  • Specialized Activities : Activities that are typically unique to your business and may require specialized skills. These functions are more difficult to transition to a Shared Services or BPO model because they need specific skills, judgment and business insight.

Most Common Finance Processes Being Outsourced


The finance transactional processes being typically outsourced fall within the “value-preservation category” and include a combination of Accounts Payable, Accounts Receivable and General Accounting tasks. Here’s a list of what we typically recommend our clients outsourcing:

  • Accounts Payable
  • T&E Management
  • Collections
  • Customer Invoicing
  • Cash Application
  • Master Data Administration
  • Account and Balance Sheet Reconciliations
  • Journal Entries
  • Fixed Assets
  • Period Closing
  • Intercompany Transactions
  • Variance Analysis Support
  • Performance Management, including:

    Service level management and monitoring
    Performance benchmarking
    Process redesign
    Automation (e.g. RPA) and continuous improvement for the functions in scope

As you analyze your current finance organization, these are some of the key characteristics that make a position a good candidate for outsourcing:

Transactional activity focus is 75% or higher

Cost savings opportunity of 20% or more

✔ Heavily tenured organization

✔ High attrition rates

✔ Manual processes with opportunities for improvement and automation to gain productivity gains of 10% or more

Most Common Finance Processes Being Retained


While the transactional activities are moved to an outsourcing model, the retained finance organization should be focused on the higher-value activities as well as some of the tasks that require closer proximity to the business. These retained activities can include:


Market-Centric and “Hands-On” Activities

  • Credit Management
  • Local Sourcing and Supplier
  • Management
  • Cash Management
  • Financial Consolidation
  • Local/Regional FP&A
  • Payment Approval
  • Local Payments
  • Customs and Trade Management
  • Local Tax Filings

Higher Value & Decision Support

  • FP&A and AOP Management
  • BU Interface and Communication
  • Trade Accounting Strategy
  • Tax Strategy & Management
  • Strategic Planning
  • Segment Reporting
  • Management Reporting
  • Variance Analysis
  • Balance Sheet and P&L Review
  • Marketing Spend Analysis
  • Operational Analytics
  • Market Financial Oversight & Analytics
  • M&A Strategy & Execution
  • BPO Relationship Management
  • Innovation & Continuous Improvement


Upscaling your Finance Department’s Skills  


Once transactional tasks have been outsourced, the available skillset of the remaining finance department will have to be closely assessed as most likely the higher-value skills that your organization will need do not perfectly match with the skills that you have today. In fact, the insufficient skills for advanced analytics are a top concern for CFOs going into 2020 according to Gartner.
Outsourced finance department

CFOs will need to decide to what degree restaffing and/or reskilling is needed. The shift is primarily from transactional, backward-looking and diagnostic analytics to forward-looking, predictive analytics and a heavy commercial mindset. For example, modern finance teams may require skills in areas like data analytics, business analysis, and M&A integration. CFOs may opt to hire new employees, or retrain existing ones through educational programs and courses.

Visionary finance employees may already have some of the skills that are transferable to these new areas in demand. According to Associate Professor Wendell Gilland, who teaches “Data Analytics for Accountants” at the University of North Carolina’s Kenan-Flagler Business School, “Accountants are used to aggregating information to create a picture of an organization that summarizes the details contained in each transaction. Working with descriptive analytics, predictive analytics, and prescriptive analytics comes more easily to people who already possess excellent quantitative skills.”

 “Accountants are used to aggregating information to create a picture of an organization that summarizes the details contained in each transaction. Working with descriptive analytics, predictive analytics, and prescriptive analytics comes more easily to people who already possess excellent quantitative skills.” 

You can read more details about this topic in this blog post: Mastering Data Analytics Can Make You a More Valuable Accountant

Assessing the Finance Outsourcing Opportunities in Your Organization


Each organization has its unique intricacies and complexities derived from its business processes, systems and geographic footprint. As such, what may seem a good outsourcing candidate in one organization may not be the case for another company.

What is true is that finance outsourcing and hybrid shared services models are a growing trend that should not be overlooked, but instead leveraged as a tool to drive modernization and automation in your operation faster and more cost-effectively than what you can achieve internally. 

Based on a recent Gartner study, 76% of CFOs report lagging ROI from technology investments due to long implementation and slow adoption as a top problem. In order to overcome this challenge, many organizations are leveraging the labor savings that come from nearshore or offshore outsourcing to self-fund their innovation initiatives such as RPA and Analytics. In addition, outsourcers have started to guarantee the headcount reduction and associated cost savings from RPA as part of their BPO contract which is also a key advantage of outsourcing versus trying to drive innovation in-house.

To schedule a complimentary consultation with Auxis to discuss the specific outsourcing opportunities in your organization, click here.

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Fabiana Corredor

Written by

Fabiana Corredor

Fabiana Corredor has been working with Auxis for over 7 years and is currently part of the Sales & Marketing organization. Fabiana’s areas of expertise include Finance Transformation, Shared Services, Nearshore Outsourcing, and Intelligent Automation. Fabiana started her career in Management Consulting in Ernst & Young in Latin America, and then transitioned to the Consulting team at Auxis, supporting the delivery of multiple client transformation initiatives across different industries before moving into sales. Fabiana is very passionate about helping CFOs and senior executives design customized back-office solutions to operate at peak performance. Originally from Venezuela, Fabiana moved to the US in 2012 when she started working for Auxis.