Mastering Risks in Your Finance Function

Risk management is a key part of every finance department and CFO’s portfolio. Timely financial reporting, regulatory compliance, market instability, and technological advancements are all elements of risk that must be managed. These factors impact organisational stability and growth in both the short and long terms. An organisation’s competitive edge is built from their ability to manage risks while leveraging their expertise, relative to the competition. However, this places a significant burden on both senior management and the finance function.

Understanding risk in finance

It is important to understand the various types of risks that impact the finance function:

• Reporting – There are risks to relying absolutely on data for decision-making. Any inaccuracy or delay in finding the right information can compromise your future and mislead your organisation,
• Regulatory compliance – It pays to be vigilant and stay ahead of ever-changing regulatory requirements and maintain compliance. Non-compliance can lead to penalties or damage to your organisation’s reputation,
• Accounts payable – Fraud and accounting errors cost Australia and New Zealand organisations billions every year. Not all fraud is the result of hacks or malware. It can occur through simple mistakes like paying the wrong supplier.
• Technology – Outdated or inadequate financial systems can expose your organisation to data loss or breaches. Sensitive data compromise leads to both significant operational downtimes, and erodes trust with your customers,
• Market – Market and environmental fluctuations impact your ability to forecast and plan for the future. Market changes present both opportunities and threats to your current market position, and your competitors.
• Operational – Inefficient, manual processes exacerbate all other areas of risk to the finance team. Manual processes go hand in hand with errors, undermining accuracy and responsiveness to market changes.

The role of outsourcing in risk management

Outsourcing is a feasible way to reduce some of these risks. Businesses can improve operational efficiency, increase cost savings, strengthen compliance, and manage risk by utilising the knowledge and resources of specialised service providers.

How does outsourcing your finance function help to mitigate these risks:

1. Expertise and Specialisation: Outsourcing partners bring specialised knowledge and experience in handling complex financial tasks. They are well-versed in the latest regulatory requirements and industry best practices, ensuring that your organisation remains compliant and up to date.
2. Advanced Technology and Tools: Outsourcing firms invest in state-of-the-art financial technologies and tools. This enhances the accuracy and efficiency of financial processes and provides robust security measures to protect your sensitive financial data.
3. Scalability and Flexibility: Outsourcing allows you to scale financial operations up or down based on your changing needs. This flexibility helps manage operational risks by ensuring that resources are aligned with business demands.
4. Cost Efficiency: By outsourcing non-core finance functions, businesses can reduce overhead costs and overreliance on manual data entry and processes. This cost efficiency can be redirected towards strategic initiatives that drive growth.
5. Improved Focus on Core Activities: Outsourcing frees up internal resources, allowing the organisation to focus on its core competencies and strategic objectives. This improved focus leads to better decision-making and enhanced business performance.

Choosing the right outsourcing partner

To effectively manage risks through outsourcing consider a partner:

1. Witha proven track record and extensive experience in handling finance functions.
2. Who ensures the use of robust data security measures and the latest financial technology.
3. That offers customised solutions tailored to your specific needs and can adapt to changing business requirements.
4. Who adheres to industry standards and holds relevant certifications.
5. With an emphasis on effective communication and providing regular updates on performance and progress.

Outsourcing finance services can be a smart strategic choice to manage risks and promote corporate success in a period of rapid change and uncertainty. Utilise the expertise and experience of specialist outsourcing providers to improve your capability and scalability. Businesses can enhance productivity, arbitrate costs, ensure compliance, and enhance risk management capabilities.

Talk to us about Infomate

Infomate is passionate about transforming your business and processes to improve efficiency. They forge strong relationships built on simplicity, excellence, and trust. Infomate has nearly two decades of experience serving over 150 clients. They have a global footprint across the UK, Europe, Nordics and Australian regions. Infomate champions best practices and good governance with multiple integrated safeguards and regular audits.

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Contact our team if you would like to learn more about Infomate’s services and how they can help your organisation improve efficiency. Please email us at sales@kilimanjaro-consulting.com or call 1300 857 464 (AU) or 0800 436 774 (NZ).