What Size Company Benefits the Most from AaaS?
Lavoie has had numerous conversations over the years with companies of all sizes regarding outsourcing or what we refer to as AaaS (Accounting as a Service). AaaS is a form of outsourcing that combines people, process and technology to help companies gain a strategic advantage. Some companies think they are too big to outsource any function. Others think they aren’t big enough. So, what is the right answer? They are both wrong!
FAO (finance and accounting outsourcing) started nearly 20 years with BP outsourcing its accounting functions to Accenture. FAO has traditionally been a horizontal offering with a value proposition driven by cost reduction and efficiency gains targeted at large organizations. So clearly the argument of an organization being too big has its flaws.
Smaller companies have been outsourcing payroll for years so they are already participating in a form of FAO outsourcing. The next concern we hear from clients is that they will outgrow services. This is certainly a possibility if you select the wrong partner that does not have the technology or staff to grow with you. For example, if a company is only providing bookkeeping services, it is certainly likely you would outgrow them. However, if a strategic partner is selected they will be able to grow with you and help you scale faster.
Large organizations are most often driven to outsourcing for cost reduction. However, as market requirements intensify, FAO solutions are increasingly becoming more industry-specific to provide strategic advantages and not strictly cost reduction. In smaller companies outsourcing can also reduce costs, but more importantly it enables them access to a full finance and accounting team that leverages economies of scale. Most SMBs can’t afford to hire an entire F&A department. So, what often happens is the company may only have a senior level person and they are stuck doing daily tactical activities or they may only have a junior level person and they are responsible for critical items such as cashflow analysis. Both have obvious weaknesses that prevent a company from reaching its potential.
AaaS solves this dilemma for SMBs. Companies don’t have to worry about daily tactical items that keep them from focusing on the company. In addition, they are provided with senior level advisory. To further maximize efficiencies, Lavoie services also include access to the leading cloud technologies. By combines people, process and technology we know AaaS can benefit companies of all sizes. info@lavoiepllc.com