6 Questions to Ask When Evaluating Finance Outsourcing Companies

The finance function is mandatory. Whether you’re an early stage startup or a well-established public company, or somewhere in between, you must have some level of a finance function. How you operationalize that function can vary greatly, but usually involves staffing the function internally or outsourcing holistically or partially to a finance outsourcing company.

Business owners and managers need to weigh their decision to staff internally or to outsource on a variety of factors including, budget, goals, risk tolerance, competency, and more. Once the decision to use a finance outsourcing company is made, there is still an evaluation process required to find the best solution for your business. When considering finance outsourcing companies for your business, it's crucial to ask thorough and specific questions to ensure they can meet your needs and expectations. The following are some of the key questions to ask the prospective outsourcing companies during your evaluation process:

1. What is the depth of their Service Offerings?

Qs: What specific finance and accounting services do they offer? Can you tailor their services to meet the unique needs of your business? 

A finance outsourcing company may only offer general bookkeeping and/or accounting, while others focus on CFO-level work, or some other finance niche. Others, like finairo, have the capacity to offer more comprehensive financial operations services that help guide organizations through a variety of stages of growth and development, while also ensuring accuracy, efficiency, and compliance.

2. What Tech Stack and Tools do they work with?

Qs: What accounting software and other financial ops tools do they use? Do they work within your existing systems? 

A finance outsourcing company may specialize in specific platforms, while others have more broad expertise and can use the tools and programs you already have. You’ll want information on their expertise in your tools, not just general expertise. Some outsourcing providers will be capable of evolving your tools and tech stack to best practices, while others may simply work at your direction without continuous improvement or evolution. When selecting a partner, make sure they can help guide you on both your short and long term goals as it relates to your finance tech stack.

3. Are their Data Security and Compliance guidelines sufficient?

Qs: How do they handle regulatory compliance, especially in your industry? What measures do they have in place to ensure the security of your financial information? 

Particularly if you are in a regulated industry, ensure you are working with a finance outsourcing company that has experience with those regulations. As for data security, that’s important regardless of industry.

4. Is the Partner flexible enough to accommodate your needs and grow with you?

Qs: Can their services scale to accommodate your business growth? Are there flexible options if your financial management needs change? 

Financial operations is not “one size fits all”, but sometimes outsourcing providers treat it as such. It’s important to see how easily they can flex and scale with you.

5. What Communication and Support Channels do they use?

Qs: What is their communication process? How often will you receive updates on your financial status? How can you reach them in case of urgent matters or questions?

Trust is important when it comes to your relationship with a finance outsourcing company. They should be transparent and easy to reach for questions. Business leaders should always be in tune with the financial standing of the company, and outsourcing your finance function should not hinder that ability.

6. What is their Cost Structure and Billing?

Qs: What is their pricing structure? What is the process for terminating the contract if needed? How is your data handled and transferred back to you upon contract termination? 

In addition to considering cost and contract terms, every relationship eventually comes to an end. Whether you outgrow the financial operations outsourcing firm, experience a merger or acquisition, or otherwise want to end the engagement, make sure you know how that process will work.

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Once you have the answers you need, you’ll be able to choose a finance outsourcing company with confidence. Businesses should have a good relationship with their financial operations partner, and going into the agreement with a full understanding of what you are getting into will get you off on the right foot. 

If you are choosing between financial operations outsourcing companies, schedule a free consultation to discuss partnering with finairo.