What is financial outsourcing? Why do SMEs need financial outsourcing?

Financial outsourcing is a financial management model developed rapidly in western developed countries. It mainly divides the whole financial management activities into several modules according to the needs of enterprises, such as general ledger accounting, current account management, salary management, fixed assets management, system statements, tax returns and so on. Some of these modules that enterprises are not good at management or have no comparative advantage are outsourced to professional institutions that are at the leading level in this field, such as outsourcing the management of wealth management funds to financial institutions such as banks and outsourcing accounts receivable to collection companies. With the advent of economic globalization and the rapid development of Internet technology. The field of financial outsourcing began to expand, not only in transaction management, but also in financial analysis and risk management, and gradually became a way to increase enterprise vitality and a strategic weapon for business transformation. It refers to outsourcing the part of the whole financial management activities that enterprises are not good at management or have no comparative advantage to professional institutions such as accounting firms that are at the leading level in this field. The most common is bookkeeping.

The reason why small and medium-sized enterprises want financial outsourcing is actually due to cost considerations. After all, if the accounts of enterprises are too simple, there is no need to set up a special financial department to operate, but small and medium-sized enterprises carry out financial outsourcing in order to meet the inspection or other needs of relevant departments.