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The Ultimate Guide To Financial Services Outsourcing

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    The popularity of financial services outsourcing is growing every day, as it enables medium-sized businesses and large companies to improve their financial functions more cost-effectively. Proper finance management plays a pivotal role in determining the success and failure of every business.

    However, for most startups and SMB’s, maintaining an in-house team of finance and accounting professionals can be expensive. This is one of the reasons why most companies turn to financial services outsourcing.

    In this thought leadership article we discuss:

    1. What financial services outsourcing is
    2. 3 major benefits of financial services outsourcing
    3. 2 challenges of financial services outsourcing
    4. A step by step guide on how to choose the best fit outsourcing partner
    5. How to manage your outsourced team


    What exactly is Financial Services Outsourcing?

    In broad terms, Outsourcing refers to hiring a third-party company to perform tasks or services instead of doing them in-house. In terms of Financial services outsourcing this refers in particular to the outsourcing of several finance and accounting functions.

    This usually includes back-office tasks like:

    • Bookkeeping and Back-Office Financial analysis &
    • Support Due Diligence
    • Risk Management
    • Managing accounts payable and accounts receivable

    Reasons for Outsourcing Financial Services

    So why do companies outsource their financial services? There are a number of reasons for this including:

    Financial Processes Are Usually Complex

    Processes like accounting and supply chain finance management require tons of expertise and experience. That is why many companies prefer to outsource them to a dedicated financial service provider instead of putting inexperienced in-house staff on the job.

    Keeping Up With The Latest Technology

    Instead of companies continually updating their in-house infrastructure and incurring costs, outsourced service providers such as Sapientis Advisory have the latest software for performing the finance function, allowing you to benefit from their constantly updated infrastructure.

    Improved Efficiency

    By outsourcing complex finance tasks, you can dedicate your time and resources to your core business activities instead.

    Operational Resilience

    As you can upscale or downsize your outsourced processes at any point, outsourcing acts as a shield against the operational risk of unforeseen events like the pandemic or a volatile market.

    Key Benefits Of Financial Services Outsourcing

    Now that you have an understanding of why companies outsource their financial activities, let us take a detailed look at three key benefits that form the basis for all the reasons we discussed above:

    • Cut Hiring And Infrastructural Costs

    An in-house finance department can be costly.

    From hiring and training costs to management and office rentals, most businesses have to shell out thousands of Rands just to handle their accounting and financial reporting needs! However, by partnering with a financial services outsourcing service provider like Sapientis Advisory, you can significantly reduce these costs and save on:

    • Talent Acquisition and Onboarding Costs

    Reduce time and money on finding the right employees, hiring an outsourced team allows you to get started immediately.

    • Training Costs

    Financial services outsourcing professionals like Sapientis Advisory have years of experience finding suitable talent.This reduces the resources and time you have to spend on training your outsourced accounting services team.

    •  Software Pricing

    To stay competitive, outsourcing solutions regularly update their software. This allows you to benefit from top-of-the-line tools at a fraction of the cost you would incur if you invested in them yourself.

    • Infrastructural Costs And Rentals

    As your outsourced team does not consist of in-house employees, you do not need to worry about renting additional office space or paying for additional utilities (electricity, internet connection, etc.). Your outsourcing arrangements take care of all these costs.

    KEY BENEFIT: Outsourcing an accounting service from Sapientis Advisory allows you to work with the best financial experts in the financial services industry at a fraction of the cost of maintaining in-house teams!


    2. Access To Global Talent And Expertise

    You are usually limited to local talent pools when you hire in-house finance teams, However, the best fits for your company may not always be the ones from your city or country! Luckily, this is not the case with outsourcing.

    Outsourcing your finance tasks with Sapientis Advisory allows you to work with the best professionals in the financial services sector from across the world and allows you to extend your company’s operational hours. Through effective management and communication, you can take advantage of the time zone disparity to massively boost the efficiency of your finance activities. These teams are experienced at working remotely to provide as much, if not more, value when compared to an in-house team.


    3. Increase In-House Efficiency

    By outsourcing your financial services, you can increase the efficiency of your in-house staff as well and this is how you do it:

    • Offloading Managerial Responsibilities

    Outsourcing your financial team with Sapientis Advisory, allows managers and business owners to focus on the core aspects of your business instead of trying to keep up with accounting and financial statements. This is particularly beneficial if your managers are responsible for other departments and aren’t particularly experienced in financial management.

    • Frees Up Your In-house Employees

    Your in-house employees can spend more time and effort on other roles towards growing your business, as all finance and accounting related responsibilities are taken care of by your Sapientis Advisory outsourced team.

    • Optimise Current Expenditure

    An excellent accounting outsourcing provider like Sapientis Advisory can help you identify cost saving opportunities without compromising on efficiency and quality of work.


    Key Challenges Of Financial Services Outsourcing

    Now that you know how outsourcing can help your company, let’s take a look at two significant disadvantages of outsourcing your financial services:

    • Communication Can Be Difficult

    As outsourced teams don’t work in the same office as you, maintaining efficient communication can be challenging. Why is this? With an in-house accounting department, it is easy to hold meetings or even impromptu discussions. However, this won’t always work with an outsourced accounting team!.

    Ways around this is to understand communication gaps such as time zones and resolving them is key to functioning effectively. Utilise a comprehensive communication platform and ensure you communicate your expectations and needs thoroughly to get the most out of your outsourced finance and accounting firm.

    • Cultural And Language Barriers

    This is especially pertinent for offshore outsourcing services. Your outsourced finance team may follow a different work culture, ethic and set of norms when compared to your in-house employees. In addition, take into consideration any language barriers that may exist between your in-house team and the outsourced one. Consult your outsourcing provider and try working on a trial project to ensure that these do not impact your work efficiency.

    In such cases, you need to ensure that your financial services provider follows the same regulatory requirements for processing your financial data or personal information as an in-house team would and this could be achieved by creating a guideline document or conduct an onboarding/orientation session with your outsourced team to ensure that everyone is on the same page and there are no misunderstandings.

    Step-By-Step Guide – How To Choose The Right Outsourcing Partner

    Despite these challenges, outsourcing your finance and accounting related functions still makes sense for most companies.

    In order to mitigate these challenges and risks it is vitally important to choose the best outsourcing partner, but with so many out there, how do you select the best outsourcing contract for your business?

    Where do you go from here? Here are some key steps that will make the process easier.


    Step 1: Identify Your Business Needs

    Determine what exactly you will need from your outsourcing service provider before you begin looking at the various options that are available. Take into account the following:

    Do you only need to outsource specific tasks, such as accounting or financial planning? Or are you looking for a complete business process outsourcing (BPO) solution, that firms like Sapientis Advisory can provide?

    Depending on the data and operations that you will share with the outsourced team, what kind of security and privacy measures are required?

    Would you prefer an onshore, nearshore, or offshore outsourcing company?


    Step 2: Estimate Your Company Budget

    While it may not be possible to accurately calculate your outsourcing expenditure yet, you need a rough estimate to ensure your business doesn’t risk overspending. While estimating your budget, consider:

    • The exact services you need.
    • What your company can afford to spend.
    • The value the outsourced partner would be bringing to your company.
    • What it would cost to hire an in-house team for the same work.

    Use these figures as a rough guideline to estimate the approximate range of your outsourcing budget.


    Step 3: Narrow Down Service Providers

    Now that you have established your company needs and what you can afford, it’s time to search & select your best service providers. Use the factors given above as parameters to narrow down your choices.

    In addition, consider what benefits each vendor provides – which might not be something you thought of before. These could include:

    • Experience and years in the Industry – (this speaks to their credibility)
    • Discounted pricing.
    • Security compliance and internal control measures.
    • Software and infrastructure used by the outsourced service provider, and more.

    By the end of this step, you should have narrowed down your list to 3-4 potential service providers at most.


    Step 4: Look At Client Reviews & Testimonials

    Reviews and testimonials are vital to read as these clients have had first hand experience with the service providers and it can be difficult to judge how well a service provider will fit your needs before hiring them.

    Take due diligence and look at the other clients the outsourced service provider has worked for in the past and the quality of their work.

    Keep an eye out for businesses in similar industries as yours or those with the same financial service/finance industry needs. Read what other clients have to say about the outsourcing provider’s performance, employees, and quality of work. Use these to narrow down your choices to a maximum of 2-3 financial services outsourcing companies.


    Step 5: Use A Trial Project

    As a final step, consider working on a short project or task with each of the outsourcing providers you have selected.

    This will allow you to judge their performance and how well they suit your business requirements.

    • Decision-makers can observe factors like: Communication and compatibility: How well does the outsourced team work with your in-house employees? Are there any significant communication barriers or gaps that may affect your operations?
    • Performance and efficiency: How good is the outsourced team at completing the work they’ve been given?
    • Value: Utilising an objective metric or key performance indicator (KPI’s), determine their performance.
    • How well does each outsourcing solution fit your particular business needs?

    After analyzing the trial project, you should have a better idea of the best outsourcing partner for your financial services.


    How To Efficiently Manage Your Outsourced Team

    It may sound obvious but to get the best results from your outsourced financial team, you need to manage them the correct way.

    Here are the key factors to keep in mind as well as the best tools to help you out:

    1. Communication

    Communication is the most important factor when it comes to managing your outsourced financial service team’s performance. Even with the advent of instant messaging, nothing beats face-to-face conversation when it comes to detailed discussions or lengthy explanations. Consider powerful video-conferencing solutions such as Zoom, Microsoft Teams, and Google Meet.


    2. Project Management

    To keep track of your outsourced finance/accounting tasks, you need a project management tool that allows you to stay updated on task progress, assign projects easily, and manage all your outsourced financial tasks in one place. Tools you could choose from include Trello, Asana, and


    3. Productivity Management

    While a project management tool can help you track your progress on tasks, it cannot tell you how productive your outsourced finance team is. You need a dedicated productivity management software like Time Doctor.

    So how can Time Doctor help manage your outsourced team?

    • Powerful reporting: From accurate time sheets to visual productivity reports, Time Doctor features 7 detailed reports to help you analyse productivity. This way, you will know if your service provider is only billing you for the time they spend on your finance/accounting related tasks.
    • Simple time tracking: The simple time tracker helps you track time as well as web and app activity, so you know exactly how your outsourced team spends their work hours.
    • Productivity ratings: Assign each website and app a productivity rating to identify barriers to productivity.
    • Payroll management: Easily pay your outsourced staff on an hourly or fixed term basis.
    • Screenshot monitoring: Helps ensure that your outsourced team doesn’t violate company policies or regulatory requirements in the financial industry.


    Conclusion & Final Thoughts

    Outsourcing your Finance and accounting functions will help you not only decrease the tasks of your employees, but can also reduce costs and improve overall results.

    The key premise remains and that is to find an experienced service provider who will meet all the necessary criteria.

    While outsourcing your financial services can seem daunting at first, it does not have to be difficult. Just follow our step-by-step guide in this article, and you will be all set to outsource your finance department. Once you have selected the right service provider and the right set of tools, you will enjoy all the benefits financial services outsourcing can offer you before you know it!


    Consider Sapientis Advisory as your financial services outsourcing partner of choice.