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The better functioning of the accounting and finance department is crucial to a company’s growth and success. Every company should be able to process its financial transactions without any error or fraud while closing books on time, creating financial statements, and providing accurate investor reporting. While there are established ways of going about these tasks, Finance as a Service proved to be one of the most efficient and cost-effective methods. With the recent technological advancements, FaaS is here to revolutionize the finance and accounting landscape.
The financial services sector comprises various financial firms such as banks, lenders, investment houses, finance companies, real estate brokers, accountancy companies, individual asset managers, stock brokerages, and insurance companies that provide financial services to people and corporations.
The IMF’s finance and development department defines financial services as the processes by which consumers or businesses acquire financial goods. Companies in this industry manage money.
The financial services sector is crucial in providing a free flow of capital and liquidity in the marketplace. A nation’s economy grows when this sector is strong, and the companies can manage risks better.
The FaaS model helps small and medium-sized businesses address the challenges mentioned above by offering a full range of financial services such as accounting, financial planning, business strategy, controllership, tax filing, compliance, etc.
Financial Service teams combine the aspects of financial strategy and accounting, promoting continuity within an organization and giving it access to a full-service accounting team without having to hire and retain an in-house team.
Finance companies use new technologies to increase their dexterity and responsiveness, providing real-time customized financial reporting and advisory services. The most commonly offered services by FaaS firms include:
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The FaaS model can also effectively serve the following:
Financial service products benefit businesses in several ways ranging from cost and scalability to financial visibility and addressing challenges.
Choosing finance as a service solution instead of an in-house team helps an organization save costs. Time is money in businesses, and with FaaS, they can increase the number of procedures they automate and save costs in compliance as analytics data helps them make informed decisions. Finance as a service provider can address a company’s unique needs and chart out the best processes for each one of its clients.
Experienced FaaS providers help your business scale with the right level of resources. They help you set up and streamline the right systems–from billing to invoicing to return/refund and payroll calculations–while providing prompt assistance whenever needed.
FaaS companies provide Chief Financial Officers or CFOs for businesses that lack one. CFOs can give your business financial guidance for a long-term strategy and success. Having an outsourced CFO will also give your company financial leadership while allowing you to focus on your core business principles.
Business procedures drive a company’s financial directives and strategies. The financial and accounting department can hinder the company’s growth when the CFO’s time is split between tactical and strategic initiatives. Sometimes hindrances can occur when the department hasn’t set up the right systems or lacks the processes needed to achieve exponential growth.
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Compared to the 18-24 months outsourced finance teams approximately take to optimize a company’s finance function, the financial service model can achieve the results within 60 days, saving time and money. The FaaS team will implement the correct procedures for each department to minimize costs and ensure everyone is on the same page concerning financial objectives.
For a growing enterprise, reducing the risk of fraud and errors is, at the same time, essential and challenging. With several employees entering data manually into several systems, it can get difficult to supervise the inefficiencies. The FaaS model brings technological integration into the financial management systems, which can help decrease duplicate listings and repetitive tasks, freeing up more time for the staff.
The service model in finance allows businesses to get their financial reports in a unified form that communicates the current challenges and upcoming opportunities.
Improved financial visibility will help companies:
Finding, hiring, onboarding, and training the right employees is one of the biggest tactical challenges of a company’s finance function. Another challenge includes technology which is evolving exponentially. The tech landscape within the finance world is changing quickly. Leveraging the right technology can bring a huge competitive advantage to businesses.
Every business makes use of one or the other kind of tool for various tasks such as budgeting, forecasting, electronic payment processing, etc. All these tools collect information separately, which must be collated to create a complete financial report. Researching and implementing the right tools takes a lot of time and effort for business owners, CFOs, and managers—time they should spend on core business tasks.
However, businesses can strategically outsource their F&A department while maintaining a core finance team with the service model in finance. The service will provide financial experts capable of discretely, wisely, and accurately supporting your finance department.
Adopting a FaaS model helps CFOs and their teams respond quickly to emerging business needs and generate valuable foresight to improve decision-making. The finance and accounting department can improve the company’s working capital, deliver more accurate forecasts, and lower operating costs with technologically-advanced FaaS models. It also helps organizations standardize and automate repetitive, time-consuming manual processes.
The service models in finance help CFOs in the following ways:
Outdated systems, inefficient processes, and wrong skill sets are all factors that stall and hinder a company’s growth. Without accurate information and clear insight into business performance, leaders cannot take the right decisions for the company’s growth. To respond to an ever-evolving business environment, business leaders need to have a clear view of financial data while staying on top of cash flow management, document automation, invoice processing, compliance, etc. We are also seeing the growth of decentralized finance service platforms to mitigate the current limitations.
The service models in the finance sector are cost-effective solutions to meeting every finance department’s different and specific requirements. FaaS delivers integrated technology, data analysis expertise, process automation, business process engineers, and strategic CFO guidance for a company’s holistic growth. The FaaS approach can help businesses establish growth, stability, and long-term resilience.
The FaaS model takes the benefits of automating book-keeping and compliance processes one step further by providing correct analysis, implementing software, clearly communicating objectives, providing scalable solutions, etc.
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