IQ BackOffice's Client-Centric Business Process Outsourcing Services Provide Clients with the Competitive Edge

IQ BackOffice’s Accounting Outsourcing Services Provide Greater Control Over Your Business While Reducing Costs by 25% to 50% Annually

In an era of increasing competition and reduced margins, executives are looking for solutions that reduce costs while adding value at the same time.  Many have turned to outsourcing as a valuable tool to accomplish their objectives.  Whether they have outsourced information technology, human resources, manufacturing, distribution, customer service, payroll, accounts receivable or other functions, companies have come to rely on partnerships with firms that have valuable expertise in these areas.

History of Outsourcing

Outsourcing has evolved over time as management's belief of what is "core" to the business has changed.  In the early 20th century,  companies were vertically and horizontally integrated.  Ford Motor Company, for example, has its own forests (for dashboards) and rubber plantations (for tires). 

However, it became clear to management that one firm could not do everything well or as cost-effectively as a firm dedicated to that function, and outsourcing was born. 

Gradually more and more functions once considered "core" have been outsourced. 

One of the last non-core areas still kept in house by many companies is accounting, although this is changing rapidly.  For example, the Gartner Group estimates that Business Process Outsourcing will grow to $173 Billion by 2007.

From the outsourcing of payroll over 50 years ago  pioneered by ADP, accounting outsourcing has evolved to include the outsourcing of accounts receivable and accounts payable to general ledger management and management reporting. 

The areas of fastest growth is in Accounts Payable Outsourcing and Complete Accounting Outsourcing (outsourcing of the controllership function on down).

Why Accounting Outsourcing?

Why has this occurred?  For one thing, management's information needs have increased dramatically.  It is no longer sufficient to look at a profit and loss statement three weeks after the end of the month to see how the business performed.  Management today needs to understand revenues, costs and profits by product/service, office/branch, department, salesperson, and customer in real-time.  Management cannot wait to find out how the business did, they need to know how the business is doing now, where it is performing and where it is not. 

This increasing sophistication has led to more complex accounting/ERP systems to provide this information.  However, most companies have found that these systems are very expensive, risky and expensive to implement and rarely provide the information that the software salesperson promised.  Other technologies, such as imaging and workflow, add immense value to these systems if implemented properly.  However, they are also expensive and risky to implement. 

The increasing information needs have also necessitated more complex accounting processes which are difficult to design, requiring expertise few companies have internally, and requiring a different set of skills to manage these processes typically not found in the accounting department.  This is because most accounting processes are really transaction processing functions, not accounting functions (think of accounts payable).  Furthermore, finding intelligent, well-qualified staff to work in these areas has become more and more difficult, and many firms have to put up with significant turnover and human resource issues. 

And all of this takes valuable management time, leaving little opportunity to do what management should be doing:  analyze the information to make better business decisions.  Studies have shown that managers spend over 85% of their time simply managing the processing of financial transactions rather than analyzing the information.

Mid-sized firms, those with less than $1 Billion in revenue, are at a particular disadvantage.  Studies have shown that mid-sized firms typically spend two times what large companies spend to manage their back office as a percentage of revenue (this is true of individual processes such as Accounts Payable as well as the entire back office:  download our benchmarks report for further information).  This is primarily due to the much lower scale economies of mid-sized firms.  But it also means that a new business process, ERP system or other technology investment won't have a positive return on investment for a mid-sized firm, while it may have a very beneficial return for a large firm.  As a result, mid-sized firms tend to have inferior back office processes, back office expertise and accounting/ERP systems.  This ultimately manifests itself in less, late and inaccurate information, forcing managers to spend time gathering raw data versus analyzing real-time information to grow their business. 

This is also true of large firms that either have low transaction volumes in any of the key transactional areas such as Accounts Payable, Accounts Receivable, Payroll or simply do not have the expertise or technology in selected business processes.

IQ BackOffice's Accounting Outsourcing Solution

IQ BackOffice offers an Accounting Outsourcing solution that brings best practice business processes, state-of-the-art technology, and sophisticated expertise from a dedicated team of professionals, all utilizing IQ BackOffice's large-scale shared service centers. 

We enable our clients to "plug in" to a Fortune 500 back office that is already running to gain the advantage that the largest firms already have.

Why continually invest your resources and management time in your back office?  Let IQ BackOffice manage your back office and instead invest in your business.

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