Outsourcing of internal accounting for a 130-strong automotive supplier

In total, five people worked in the company's finance department, handling the group's accounting, payroll and financial tasks. The CEO asked our company to propose a restructuring of the finance department. The consultant's involvement was motivated mainly by the tense atmosphere in the department, as perceived by the CEO, and not by any specific professional problems. The cooperation started with the mapping of accounting and finance tasks, processes and responsibilities. The consultancy included an accounting review of the company and identified accounting errors and risks due to a lack of controls. Our consultant suggested how to make the best use of corporate tax benefits and how to ensure tax-efficient catering for employees by setting up a company canteen. As a result of our advice, we were able to save the company more than HUF 20 million in tax per year. We made recommendations for streamlining financial and accounting processes, and pointed out the rationality of outsourcing accounting and payroll areas. The business has since been satisfied with our Client. Consulting as a service element has been a constant part of the successful cooperation ever since.

Internal accounting, payroll versus outsourcing

One of the key issues for business leaders and managers is how to increase the efficiency of their business. The greatest results can be achieved by improving the core business, whether it is a manufacturing, trading or even a service business. This should also be achieved through back-office functions such as HR, finance, marketing, IT and accounting and payroll. When can you achieve the greatest results in increasing the efficiency of your business? When these back-office areas are outsourced to partner companies with core competencies in the area! Professional case management service providers can also support the efficiency of your business through continuous improvement of their own activities and up-to-date market information.

In the accounting area, this allows the company to manage risks in time and, by consciously examining tax benefits, to optimise tax to achieve higher profits. Whether accounting helps the management with management information for strategy formulation and the CFO with cash-flow planning is also an important aspect. By outsourcing accounting and payroll, a significant burden is taken off the shoulders of managers by ensuring that the partner company is running the area efficiently in its day-to-day work. The trend is clear, prosperous businesses are outsourcing activities that are not core competencies, as this is an essential tool for further growth.

How much does internal labour cost?

Whether it's an accountant or a payroll clerk, HR professionals are facing an increasing challenge with staff shortages. In addition to the ever-increasing costs of staff salaries and contributions, fixed costs in annual cash-flow plans must also include the cost of licensing the necessary software and the cost of professional support for internal colleagues (external tax consultants). In addition, the estimated wage costs of the time lost by managers due to the management of internal staff can also be included here. In the event of staff turnover, the risks associated with the transfer of work must also be taken into account. The legitimate question is: how long before the colleague admits that the job is beyond his/her abilities? If all factors are taken into account, the cost of an internal senior accountant/payroll clerk is in excess of 1 million HUF per month.

Internal accounting

Advantages

• Fast communication
• Continuous work on a daily basis
• Dealing only with the company, working outside working hours, available
• Flexible

Disadvantage

• Dear
• No responsibility
• Freedom vis major causes problems
• Internal information may be leaked (e.g. executive pay...)
• A challenge to find good workers
• For one person, the knowledge base starts and ends with the colleague!
• After how long will the colleague admit that the task is beyond his/her capabilities?
• The colleague does not necessarily have the time or the means to train themselves
• Work based on habit is typical
• In most cases, the verification has no logical methodology, at most possible
• What answers do local leaders need? What they want to hear, or the facts? Will the incumbent disagree with the leaders when they should?

LEVELS OF OUTSOURCING

LEVEL I

Tax advice, Internal accounting support services

LEVEL II

Payroll

LEVEL III

General accounting service

LEVEL IV

External accounting

What is the added value of a qualified external service provider in the field of accounting processes?

Over the years, we have continuously developed and improved our working methods. We have standardised processes for accounting, payroll and team management, supported by a unique ERP system designed specifically to support accounting and payroll functions. We have built a number of control points into the processes. This means that, for example, the submission of a VAT return is preceded by 3 checkpoints where 19 aspects are examined. And the monthly general ledger audit consists of 13 points, where 25 aspects are checked.

Working by habit and chance is replaced by controlled, monitored processes!

In our company, we assign two accountants, a team leader, a payroll clerk and a payroll team leader to one partner. During the takeover, the opening tasks, for which we have a specific control method, are carried out by a separate opening accountant and opening team leader. Organisational development in our company is the ongoing responsibility of two specialists.

For one person, the knowledge base starts and ends with that person. Our clients always buy a whole team!

Monthly reports, reports

Our company provides its contracted Partners with customised reports on the financial situation of your business, its expected results and its expected tax liabilities on a monthly basis.

Access data on-line or on-site

With access to the client interface of our ERP system, you can view the details of your booked vouchers at any time. If required, we can install the complete accounting software on site for consultation or to perform certain accounting tasks on site.

 

Executive decision support, dynamic financial dashboard

In the on-line client interface, we provide a dynamic financial overview table of the data from the monthly reports sent out, offering a range of possibilities for data analysis. At the click of a button, you can compare the current year with the previous year's data or with the planned figures.