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Article:

Why you should consider an outsourcing specialist - financial reporting advisory

15 February 2022

Learning from their experiences over the past two years, many CFOs, FDs and Financial Controllers are rethinking their finance operating model and considering how to ‘future-proof’ their function. As businesses respond to changes in operating models and ways of working, the importance of accurate financial information to guide timely and informed management decisions only increases. Are you facing the same challenges?

Here we explore the four key challenges facing today’s finance leaders in respect of technical accounting and how the right outsourced accounting advisory support can help you meet those challenges. The correct application of your business’s financial reporting framework is key.

Impact of complex and changing accounting frameworks

Changes to accounting frameworks can cause complications for businesses and those involved in the preparation of the financial statements as they may lead to wholesale changes in accounting treatments for financial statement areas. As an example, IFRS 16 Leases brought operating leases for lessees onto the balance sheet, resulting in potentially significant impacts to various balance sheet and profit performance measures.

Fast changing businesses

Further to adopting these developments, implementing financial reporting change may be necessary to continue to deliver accurate financial information as your business grows or develops, which is likely to produce associated accounting issues. Examples of such change include transitioning between accounting frameworks or processing outcomes from the addition or removal of entities in a group structure. These changes will create accounting issues that you and your finance function must address to continue to provide accurate financial information that is suitable for management’s needs.

Planning for and adopting any financial reporting change

Changes to financial reporting will demand an extensive investment of time by your finance team, including senior staff to oversee the process and manage the complications. Fitting stand-alone, often urgent, projects, whether small or large, into the ongoing schedules of your finance team can prove difficult, especially when combined with the recurring tight deadlines experienced by most businesses. In addition, your finance team may lack the required experience and expertise in certain financial statement areas.

Auditor independence

In the past it may have been possible to request auditor assistance with accounting challenges. The increasing scrutiny around auditor independence has made this less desirable or simply impossible. It will therefore be necessary to find a solution to accounting challenges within the current resources of your business or alternatively find an external source of expertise and support.

An outsourced service allows auditors to maintain independence and reduces the time, and potential fees, spent on addressing accounting issues as part of the audit process. Outsourcing accounting advisory ensures that technical conclusions are discussed and documented in advance of the audit process, helping the audit to run smoothly.

How outsourcing can meet those challenges

Your need for accounting advice and support can vary significantly. Experienced accounting advisors will understand the pressures, challenges and deadlines involved in delivering to your requirements. They can provide a detailed, personal and bespoke service by deploying the experts who can meet your needs. Ideally, they will act as a flexible and cost-effective extension of your own team.

Outsourcing financial reporting provides several benefits to your business, including:

  • Allowing your finance team to remain focused on their everyday duties;
  • Giving senior staff availability for focus on wider matters such as strategic direction;
  • Mitigating the risk of dependency on key financial reporting experts in your team; and
  • Providing you and your finance team with a flexible and cost-effective resource to utilise as and when required.

Why BDO are the right outsourcing choice for you and your team

We work with you to find practical solutions in a manner which is commensurate to your business, solving technical accounting issues to deliver accurate and compliant financial information.

This can include:

  • Impact analysis, which may include documenting the potential effects of transitioning between financial reporting frameworks, through to implementation of changes, or converting the legal steps of a group restructure into the associated accounting journal entries.
  • Assisting with determining or reviewing inputs and judgements for accounting treatments, for example analysis of the revenue recognition steps under IFRS 15 Revenue from Contracts with Customers or applying an appropriate methodology for IAS 36 Impairment of Assets.
  • Providing support on complex financial statement areas which often require detailed and extensive supporting disclosures in the financial statements. We can provide expertise on the associated implications of complex accounting standards in the statutory financial statements as well as those impacting narrative reporting, such as the new climate change reporting requirements.

Our Business Services & Outsourcing team have vast experience in supporting businesses to scale and professionalise while helping finance leaders build resilience within their finance function. We deliver the levels of support and expert advice you need to make a difference.

If you would like to discuss how outsourcing your accounting could transform how your finance team and business operate, please get in touch.

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Supporting your finance function of the future

This article is part of our “Rethinking the finance function of the future” series. As businesses adapt to remote ways of working and pivoting business models – how might the transformation of your finance function support the continued success of your business?

Successful finance leaders need to rethink their approach to the component parts of their function – viewed through the lens of transformative change and the need to support stakeholders, investors and management in new ways.

Access further insights in our Finance Function of the Future hub.

RETHINKING THE FINANCE FUNCTION OF THE FUTURE