Financial outsourcing for accounting and finance comes with a higher level of risk compared to cloud services, according to Chief Financial Officers.

In a recent survey by Ovum, the outsourcing of finance and accounting processes has been found to be influenced by both cost savings and perceived risks.

Half of the respondents who are currently outsourcing finance and accounting services would consider switching providers for a saving of 15%. This contrasts with those who are not currently outsourcing, as cost savings below 20% may not be enough to induce a switch among these organisations.

Loyalty to in-house staff and concerns over losing control are the primary obstacles to offshoring, according to the survey. However, the worry that offshoring would not save enough money to be worthwhile is now the joint second-most significant barrier, alongside concerns over losing control.

Interestingly, 38% of survey respondents view offshoring finance and accounting processes to India as too dangerous, while 44% view offshoring to South or Central America as posing an unacceptable risk.

In contrast, some companies have taken a different approach. For instance, Belatra has appointed leaders specifically to manage financial and accounting processes in Latin America. Similarly, legal firms like Luther provide local accounting services in several Central and South American countries, including Costa Rica, Ecuador, Colombia, Mexico, Peru, and more.

The survey findings indicate that cost savings of 15% could lead to a switch of providers among those currently outsourcing, but this may not be the case for organisations that do not currently offshore. The survey results suggest that cost reductions below 20% may not be sufficient to convince organisations that do not offshore to start.

In summary, the survey highlights the importance of cost savings and the perceived risks in the decision to outsource finance and accounting processes. While cost savings of 15% could be a decisive factor for those currently outsourcing, the same may not hold true for organisations that do not currently offshore. The survey also reveals that concerns over losing control and the perceived lack of cost savings are significant barriers to offshoring.

Financial outsourcing for accounting and finance comes with a higher level of risk compared to cloud services, according to Chief Financial Officers.