Letting a stranger do the books

OUTSOURCING may be the answer for the finance department at all stages of a company's development, especially for firms that are looking to cut costs.

OUTSOURCING may be the answer for the finance department at all stages of a company's development, especially for firms that are looking to cut costs.

"Opportunities in outsourcing are not limited by the size of a company. However, the truth is that larger companies, mainly international ones, have a larger potential," said Tomáš Kuča, director of performance improvement advisory at PricewaterhouseCoopers in Slovakia.

Companies that decide to outsource part of their finance activities can save costs and increase the quality of their processes, Kuča added. "Outsourcing also allows a company to improve strategic planning, such as 'growing by acquisition', and its market position."

On the other hand, outsourcing firms that do financial work for their clients have access to a company's most sensitive data, and the threat of data theft in outsourcing is often discussed. "Data theft can involve internal employees just as much as external ones. It's always a question of the control environment," Kuča pointed out.

Paradoxically, he said, a company stands a greater chance of reimbursement for data theft if it the outsourcer was the problem, as long as this eventuality is legally addressed in advance.

How to choose a financial outsourcing company? "It's analogous to marriage. Each of us approaches the search for a partner differently and looks for different qualities. However, a well-prepared contract and a 'service level agreement' for providing individual services is always a basic rule," Kuča said.

Kuča said the establishment of "shared service centres" was the newest trend in financial outsourcing in Slovakia and neighbouring countries. According to him, finding the right outsourcing partner and structuring legal agreements properly is the key to success in outsourcing. "This has always been the alpha and omega for deriving the benefits from outsourcing," he said.

- Marta Ďurianová

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