Chapter 19. Outsourcing the Accounting and Finance Functions^[*]

The accounting function is commonly outsourced, though this is usually limited to only a few tasks within the function. There are opportunities to outsource a wide array of services in this area, if a CFO is willing to work with multiple suppliers to achieve this goal. This chapter describes the advantages and disadvantages of using outsourcing for a variety of accounting services. There are also several points regarding contract clauses that the reader should know about before signing any contracts with suppliers. In addition, a section covers the various transition steps needed to hand over an in-house accounting function to a supplier. Many ways to control and measure the performance of suppliers are also revealed, as well as how this information can be used by the managers of the accounting and treasury functions. Finally, there are a number of issues to be aware of that can cause problems when a company wants to terminate a supplier relationship—these issues are described, along with possible solutions. After reading this chapter, a CFO should have a good grounding in the fundamental issues surrounding outsourcing the accounting function and will know how to negotiate contracts with suppliers, transition tasks to them, measure their performance, manage them, and sever relationships if necessary.