It's not new, nor is it surprising for this option to be better. That's especially true in the fast-paced age of today when your company needs to grow in an equally fast-paced manner. Only by doing that can you hope to succeed and reach new heights in your business.
We at Consero are well aware that you can benefit from an outsourced provider, which is why we have perfected our method.
The problems PE firms have and the solution they need
Private equity firms often require more from a third-party provider. You don't need them to merely offer software that will take over the finance and accounting functions.
A private equity firm needs the outsourced provider to offer a combination of:
- A software solution that incorporates the benefits of artificial intelligence
- A team that performs the finance function for you using their knowledge, experience, and top-quality tools
- The right kind of software
- The right processes
- The two to work well together
Many private equity firms feel that the finance function of their portcos is a disaster. So, they start looking for a solution that often ends up being a new general ledger. We've met a considerable number of such firms that always believed a new tool like that would fix everything.
However, in 90% of cases, the ledger is not the problem. The real issue is almost always the process that's leading to that ledger. You can use as many technology solutions as you want, but if your operations are inadequate, your problem will inevitably persist.
Essentially, each private equity firm needs the following things:
If all of that is in place, you will eventually get a robust finance solution for your business.
Furthermore, you need to use a centralized system if you want to get the benefits of artificial intelligence for the finance function.
First, you need to centralize the system, then standardize it, and in the end, automate it.
Such a thing is not possible using the services of an outsourced provider that’s not right for you. It’s also not possible by using an in-house team.
Creating a solution we are discussing is not possible for just anyone. It's a multi-million dollar venture. It's thus not possible for any outsourced provider, let alone a small in-house finance team to do.
That's precisely why you need to choose the right outsourced provider who has already developed and tested such technology, and a team of experienced finance professionals that use it effectively.
In the end, you should know that this solution is right for all companies, be it a small or mid-size company. Only enterprise companies above the $1 billion revenue mark can have built such a solution in-house.
If you are a company with revenues below $1 billion, you'll want to opt for a Finance as a Service solution like Consero. It will enable you to use something the biggest companies use, for a fraction of the cost.
What private equity needs to look for in an outsourced provider
Now we come to the very core of the article – the four main things you need to look for in an outsourced provider. You need to inquire about these four things before you can decide whether or not their services are right for you.
- The right way for measuring success
- Specialized tools that enable you to run portfolio companies
- A high-quality, cloud-based technology solution which improves finances and accounting
- Fast turnaround times for work and information requests
Before you start working with an outsourced provider of finance and accounting solutions, you need to see how they will measure success for you. Each provider has its own way, and you will want to know what it is to see if that way is the right one for you.
For example, an outsourced provider can have a threshold acceptable error rate per a specific number of transactions. However, there are many other metrics and methods each provider uses, and if you have a preference, you will need to see if they offer that.
As a private equity firm, you want your outsourced provider to have the right tools you can use for understanding the success of your portfolio companies.
You want to get the tools that will deliver the exact metrics you need to see. If the outsourced provider does not offer the tools you need, then there is no point in working with them.
If you’re going to hire an outsourced provider for your finance and accounting needs, you will want them to use the right software. You will want the provider to use a technology solution like the one Consero offers.
Our solution will help you:
- Improve financial reporting
- Speed up time-consuming processes
- Streamline all manual processes
- Increase controls you have with the software
The software we use is cloud-based and entirely unique. It also incorporates Simon, which is a voice-activated AI technology that essentially functions in a similar way to SIRI and Alexa, but for the finance and accounting departments of companies like yours.
When hiring an outsourced provider, you don't need one that will slow you down. You need one that will help you do all the things an in-house team can do and more. They should be able to perform better and faster.
You don’t want to pay money for a team that doesn’t deliver.
All in all, you want to make sure your outsourced provider has all of these things and can do the job for you in the way that suits your business needs.
You need them to offer a technology-enabled, high-quality service. You don’t need a team of people who merely say they will handle the finance function for you. They need to offer the right workflow tools automation that will improve the quality of your finance function.