Complex regulations and investors’ ever-increasing expectations for detailed information at ever-shorter intervals—the pressure on finance departments and CFOs is mounting. In addition, they are becoming increasingly involved in management’s strategic decision-making processes. But how are today’s CFOs addressing the growing complexity and changes in the finance sector?
Freedom Through Outsourcing
More and more companies are choosing to outsource certain financial processes to external service providers. These providers assist with traditional tasks such as preparing individual and consolidated financial statements in accordance with local and international accounting standards, as well as, increasingly, with monthly and quarterly financial statements.
The preparation of annual or consolidated financial statements in accordance with HGB/IFRS or US GAAP can be outsourced to varying degrees. In the case of a complete transfer to the service provider, the latter receives all data required for financial reporting from the company’s systems. In addition to local commercial law or international accounting issues, tax, corporate law, and operational tasks can also be addressed (“connected reporting”).
Increasingly, the service provider is also entrusted with managing the audit of the annual and consolidated financial statements. In this way, the preparer serves as the primary point of contact for the auditor. This is all the more efficient for companies because the preparer was usually also entrusted with providing opinions on commercial law or international accounting issues and is therefore deeply involved.
With the outsourcing of the local and/or international financial statement preparation process, accounting issues and compliance with regulatory requirements are also transferred to the service provider, ensuring consistent quality and, in particular, facilitating the streamlining of internal structures. Due to the tight integration of financial and business processes, significant benefits can be achieved through the reorganization and optimization of financial reporting and the consolidation process.
In addition to a standardized financial statement preparation process—which results in financial statements with comparable content across the company—this primarily includes compliance with internal and external, i.e., statutory, reporting requirements. Through the use of customized technologies, financial reporting systems are established that help harmonize both external and internal reporting. Local requirements are efficiently aligned with global guidelines. Centralized data and information management enables transparent, clear, and structured communication.
Outsourcing the preparation of annual and consolidated financial statements therefore helps finance departments focus more effectively on the company’s decision-making processes and meet both internal and external compliance requirements.
