05 May 2021 Ankit Chadha

The Next Big Trend: Outsourcing Financial Planning and Analysis Services

Financial Planning | TRC Corporate Consulting

In the last few years, we have observed that finance heads of large global corporations have grown increasingly comfortable with outsourcing basic transactional aspects of their finance planning process, but there’s still some resistance to outsourcing more complex processes like Financial Planning and Analysis. However, some leading businesses are now readily exploring FP&A outsourcing as a way to reduce costs and increase efficiency and ultimately develop a competitive edge.

While there are a few complexities associated with outsourcing Financial Planning and Analysis, but new-age service providers and financial advisors have successfully developed capabilities to make FP&A outsourcing a lucrative option for businesses. Financial planning and analysis require more experience and judgement than other functions of the financial planning process. This means that it requires more expensive resources and takes up a significant amount of man-hours. This is what provides significant potential in standardizing and outsourcing Financial Planning and Analysis processes.

One of the biggest reasons that caused organizations to avoid outsourcing financial planning services was that many of these processes are based on judgement and function on a close relationship between business leaders and users. But service providers today have effectively overcome this problem. They are focused on developing highly experienced and efficient talent with appropriate knowledge of FP&A processes, who are completely capable of offering financial planning services to marquee client.

With all this in mind, it is being said that over the next few years, Financial Planning and Analysis outsourcing is all set to become a more standardized practice in the marketplace as businesses will seek to achieve more significant savings, increase efficiency, and reduce turnaround time.

Here we discuss some benefits of outsourcing Financial Planning and Analysis services.

  1. Outsourcing FP&A Activities Can Lead to Significant Operational Savings 

While there are a few reservations associated with Financial Planning and Analysis outsourcing, many businesses have gained exemplary significant benefits through this. Financial planning and analysis are typically one of the most significant cost centres because of the naturally expensive experienced finance advisors, the customized nature of the process, and decentralization. However, outsourcing these processes streamline the workflow by eradicating redundancy and bringing about centralization and standardization.

In addition to this, decentralized FP&A processes, with analysts operating in the exact geographical location as the business, would mean that the business is not optimizing the cost footprint in the most effective manner. Labour arbitrage in low-cost locations can be a great source of cost savings. This is where outsourcing can be incredibly beneficial.

  1. Outsourced Personnel Bring Greater Expertise

One of the most practical reasons for outsourcing Financial Planning and Analysis is that the professionals working for you will have great expertise in their areas. An experienced and qualified professional who has gained exposure through working with different projects will have a clear understanding of which models will be the best fit for the issue at hand. These professionals can utilize their past successes to recognize what would and would not work for your company.

The outsourced professional will use the knowledge they have derived through past trial and errors. This will benefit your company and let it avoid some significant mistakes. These professionals will know what works in which scenario and let you solve your business issues in a cost and time-effective manner.

  1.  Reduced In – House Workforce 

FP&A practices are usually very technical in nature. This is why it is unlikely that a single person or a team of two people would be able to perform these tasks. It may be viable to have a small team with some members acting as AP or AR staff members while also overseeing other roles like creative or management. But doing the same with FP&A is incredibly hard because of the need for background knowledge and technical skillsets.

Outsourcing Financial Planning and Analysis services is also very beneficial in the case of one-off projects and analysis. If your business wants to take up a new project but is not entirely convinced of its return of investment, in this case bringing in an outsourced FP&A team will be a great way to gauge what the return of an investment will be like. This will eradicate the need of having full-time liabilities for a one-time requirement. Outsourcing also ensures that existing employees are not overburdened with work that falls outside their area of expertise.

Lastly, while your business might have an in-house CFO, finance advisor or head of finance, but they would be too occupied to take on smaller tasks. In this case, to provide part-time assistance to the CEO, outsourcing would make complete sense. With outsourcing, you can complete on-demand tasks or activities that require minimal company know-how or the ones your current work-force cannot take up.

Wrapping Up

Unlike most services in financial planning process, Financial Planning and Analysis has two timeframes – one time and continuous. There can be FP&A services that your business regularly requires while there can also be services that are required on a one-time basis. These could include forecasting whether it’s profitable to enter a new market, risks associated with a new project, or any other one-time use strategy. Outsourcing can help you with both continuous and one time frameworks.

We at TRC Corporate Consulting extend a wide range of financial planning and analysis services that are customized to suit your business requirements. Our certified FP&A professionals and finance advisors have the expertise to deliver quality insights that can aid you to take your business to new heights and meet your financial and business goals. Contact us to know more about our financial planning services.