Finding and retaining accounting talent is an increasing problem for many businesses, and the salaries to fill these essential roles keep climbing. Finance as a Service (FaaS) is an emerging business model that leverages outsourcing finance and accounting functions with cloud computing and other digital technologies to provide services to businesses of all sizes across different industries like healthcare, e-commerce, and banking just to name a few. In addition to its cost-effectiveness, flexibility, and convenience, FaaS is solving the problem many companies experience with staffing this important function.
Understanding Finance as a Service (FaaS)
FaaS is a financial model that provides businesses with access to financial services on an outsourced basis. It leverages on its cloud computing capabilities and digital solutions that can adjust to whatever your company’s needs are. In turn, FaaS providers are able to provide a wide range of support from a specific accounting function to an entire finance operation.
The Benefits of FaaS Outsourcing
Outsourcing is the practice of hiring an external company or individual to perform a business function that is normally carried out by internal staff or resources. In FaaS, outsourcing can provide financial services to businesses and individuals on an “on-demand” basis. This means that there are no unnecessary expenses incurred as customers are only billed based on executed functionalities. FaaS Outsourcing provides businesses with a range of benefits, including:
Cost-Savings
Businesses can save on the increasing cost of salaries and benefits of accounting positions, office space and infrastructure, and hardware/software costs.
Access to Specialized Services
It allows businesses to access financial services through partnerships and collaborations with specialized providers. By partnering with them, they can offer a wider range of services such as advanced accounting, tax planning and compliance, financial reporting, and analytics. These services are often optimized through cloud-based platforms and software, which enables them to offer these at a lower cost and with greater flexibility than the usual, traditional in-house solutions.
Flexibility and Scalability
Focus on Core Competencies
Finance as a Service Outsourcing for Small and Medium-Sized Businesses
This kind of service is particularly beneficial to small and medium-sized businesses that often need help with the high cost of maintaining traditional financial infrastructure. These businesses can outsource their financial tasks to specialized service providers, providing them with affordable and flexible solutions.
What industries can benefit from FaaS Outsourcing?
Healthcare
E-commerce
Banking and Finance
Real Estate
Real estate companies, under FaaS Outsourcing, manage their finances, including rent collection, accounts payable and receivable, and financial reporting.
Legal Services
Restaurant
FaaS Outsourcing - A Closer Look at the Restaurant Industry
Managing a restaurant’s finances can be complex and time-consuming, and outsourcing these functions can help them manage their finances more efficiently and effectively by providing access to industry-specific technologies and talents tailored to the restaurant industry’s particular needs. Some of its benefits include:
Accounting and Bookkeeping
Tax planning and Compliance
This model is especially helpful in navigating the complexities of tax planning and compliance in the restaurant industry, including understanding the tax implications of different business decisions and ensuring that all tax obligations are met.
Budgeting and Forecasting
FaaS can help restaurants create and manage budgets and financial forecasts, which can be essential for planning and decision-making.
Cash Flow Management
The Finance as a Service Outsourcing model provides businesses with many advantages and is becoming increasingly popular in an expensive and ever-shrinking talent pool. This model offers numerous benefits, including cost-savings, flexibility, convenience, scalability, and the ability to focus on core competencies. As it continues to gain growth and popularity, more businesses and individuals can benefit from its innovative solutions.
Finance as a Service: FAQs
Are You Considering Outsourcing Your Financial Operations? IQ BackOffice Can Help.
Here at IQ BackOffice, we provide financial business process outsourcing for large and mid-sized enterprises. We serve a range of diverse industries, including manufacturing and distribution, healthcare and dental, restaurant and hospitality, energy, retail, and technology. Our solutions enable companies around the globe to automate and streamline the complex financial processes they manage.
IQ BackOffice reengineers financial processes to take advantage of best practices and leverage state-of-the-art automation. This allows us to remove manual or inefficient steps, delivering improved controls and up to 70% cost savings for our clients.
To find out more about how IQ BackOffice can reduce costs and streamline your Accounts Payable function, get in touch with us.
Read More about IQ BackOffice offerings:
The Future of Business Payments – 5 Post-Pandemic Best Practices
Business Process Outsourcing, and a Closer Look at Accounts Payable
Accounting Automation and Outsourcing – Top 5 Rookie Mistakes
What is AP Automation and Does It Work On It’s Own?
Outsourcing Accounting Processes – Does It Actually Save Money?
