Articles | Finance and Accounting Outsourcing Trends 2011
2011 can be marked as the beginning of the New Year for finance and accounting outsourcing. Global economy is slowly and steadily recovering from one of the worst recessions experienced in the last 50 years. Organizations are looking at ways to reduce the costs and be competitive in the market in the coming years. To recover from the situation companies are looking at outsourcing accounting. Accounting outsourcing forms the partial of corporate dismantling as good as reorganizing the monetary make up for some-more extended potency which in spin increases the profitability of the organization.
Facts and Figures
The latest Everest Group research reveals a growth projection for the global finance and accounting market. The global, annual contract value this year is expected to rise 15 to 20% and exceed US $4 billion.
Already last year, the total contract value of finance
15% and reached US $ 3.5 billion.
The opportunity of finance and accounting outsourcing equals approximately US $ 150 to $200 billion.
Research carried out by an independent research organization showed strong growth in business process outsourcing (BPO). It found BPO service sales in the first three months of 2011 were 65% higher than the same period a year ago.
In 2010, the industries that mainly turned to finance and accounting outsourcing were manufacturing, retail, financial services, travel and logistics. These segments accounted for roughly 70 to 75% percent of the total spending last year. The industries seeing attraction in 2011 include real estate/property management firms, medical, banking and IT Firms.
The United States represents a major client and accounted for approximately 50% of the total finance and accounting outsourcing spending.
commonly requested in 2010 were payroll, accounts receivable
and accounts payable outsourcing processes. Emerging process
trends in finance and accounting outsourcing are financial
planning and analysis.
Demand for Outsourcing
The demand for finance and accounting outsourcing is still quite substantial. There are still many untapped finance and accounting outsourcing opportunity areas. Outsourcing is still being viewed with fear in specific industries and a certain marketing efforts from the outsourcing accounting service providers is required to tap the potential of these segments.
Focus on high end activities-
Most of the accounting outsourcing projects involves simple bookkeeping, accounts payable and payroll activities. There is still room for outsourcing several high-end projects and processes successfully. The Financial BPO service providers will have to demonstrate their competencies in high-end areas such as business analytics and management reporting.
More evolved Finance and Accounting deals-
A key trend seen today is that a number of clients who have already entered the finance and accounting outsourcing space are now moving beyond traditional practices. Their previous experience has been an invaluable learning ground. They are more aware of what to do, and more importantly, what not to do. As a result, they are focusing on setting up a far more evolved outsource environment and are taking full advantage of the same.
Trends in finance and accounting outsourcing are changing considerably as both outsourcing service providers and clients are moving towards higher expectations and demands for outsourced services. These changing trends will certainly offer new opportunities for professional finance and accounting outsourcing service providers in 2011. It seems very likely that these trends will ultimately result in an increasingly competitive, mature and sophisticated outsourcing market.