#United States #Morristown, NJ #Financial Executives #FERF #Outsourcing

Introduction

The landscape of finance teams is rapidly changing, particularly in the context of outsourcing. A recent report released by the Financial Education & Research Foundation (FERF), a non-profit arm of Financial Executives International (FEI), underscores the significant shift in how finance teams utilize outsourcing both for immediate needs and strategic long-term goals. Notably, the report is a collaborative effort with CohnReznick, a respected name in professional services, shedding light on key trends and challenges faced by finance teams today.

Key Findings

The report, titled "Financial and Accounting Outsourcing in the Age of AI", encompasses a wide array of insights gathered from over 200 finance professionals across various sectors. Some of the most compelling findings include:

1. Prevalence of Outsourcing: A striking 52% of respondents engage in outsourcing for functions related to accounting and finance. This statistic illustrates that outsourcing has become a common strategy among finance departments.

2. Impact of AI: When it comes to the influence of artificial intelligence on outsourcing, the outlook is mixed. While 34% of participants predict that AI will boost their reliance on outsourcing, 53% remain uncertain about its effects.

3. Evolving Strategies: Currently, 47% of organizations outsource basic accounting tasks and 41% are involved in HR and payroll processing. Notably, 53% express intentions to expand their outsourcing strategies to encompass technology solutions, highlighting an evolving landscape.

The report emphasizes that finance teams are increasingly pressed to achieve more with fewer resources. As the demands for comprehensive reporting and strategic insight grow, outsourcing is positioned as a vital mechanism to manage these pressures while maintaining cost efficiency.

Benchmarking Outsourcing Strategies

The report also empowers finance leaders to benchmark their outsourcing strategies against peers, facilitating an assessment of their current practices and potential growth areas. This is critical in today’s competitive business environment, where growth and adaptability are essential.

Insights from Finance Leaders

Andrej Suskavcevic, the President and CEO at FEI and FERF, remarks on the ongoing transformation within finance functions:
"Our members are focused on building best in class finance functions. Outsourcing has long been used by financial leaders to augment their team's performance and capabilities as strategic partners." He emphasizes that the report showcases how finance leaders are redefining their outsourcing approach as part of a broader talent strategy.

Kane Polakoff, a Partner at CohnReznick, also highlights that finance functions are being re-engineered to support growth through scalability and technological advancements. He asserts, "By combining accounting outsourcing with automation and AI-powered solutions, they're expanding their capabilities, gaining deeper insights, and making faster, smarter decisions."

Insights on Current and Future Trends in Outsourcing

Based on the survey, a stark contrast emerges between smaller and larger companies:

• - Among smaller firms, 48% indicate engagement in outsourcing, compared to 64% of larger companies.
• - Smaller companies earning under $100 million in revenue are notably more likely to outsource HR and payroll functions.

The advantages of outsourcing are also compelling: 78% cite addressing resource gaps as a primary benefit, while 53% appreciate the reduction in costs, and 45% relish the opportunity to focus on core business functions.

Looking ahead, 60% of larger firms and 51% of smaller ones forecast an increased reliance on outsourcing providers in the next 3-5 years, with many expressing interest in partnering with firms experienced in emerging technologies.

Conclusion

FERF's comprehensive study illustrates an important evolution in financial outsourcing strategies amid a backdrop of pressing market challenges and technological advancements. As finance teams strive to be more efficient and strategic, outsourcing has reaffirmed its role as an indispensable tool for many organizations. The full report is available for deeper insights into these emerging trends and can be accessed via FEI's official platforms.