As we move forward to the next phase of this “Never been through this before” period in our business, personal, and political experience, we look for hope, a plan, and a light at the end of the tunnel. We’ll survey below the benefits and use of outsourcing functions in your business in the context of changes rapidly impacting us all. But first, let’s talk about the trends.
Accelerating Trends With Massive Impact
Remote work from home trends have been forced upon most of us, and it is likely to be permanent for many going forward.
Virtual meetings and video conferencing/blogging are now familiar to many of us and will be part of our permanent workflow process.
Commercial real estate will be reinvented as office space needs will change with reduced workers needing central office space.
Retail stores will reduce their need for malls and strip centers, as more consumers will use online stores for many areas of purchases.
Travel domestically and internationally has been dramatically cut back and will cause changes in the use of all elements of hospitality.
Health care will change and adapt to the new demands on facilities, equipment, drug prices, FDA approvals of new drugs and vaccines, and remote health care.
These and many more trends challenge us to rethink how we do business in the future to survive, compete, and only then, be able to prosper in the future.
Rethink & Reinvent Your Business
Every business is trying its best to be profitable, compassionate, customer-centric, and compliant in an ever-changing world. Leaders are observing the general market, our competitors, reading journals, and sharing experiences with our peers to stay updated on current trends, techniques, and tools to run our businesses more effectively.
As an audit committee chairman board member of an enormous asset management fund group, I’ve noticed the following shifts in the marketplace.
Massive Outsourcing Shifts
There’s been massive outsourcing of any administrative function that could be effectively and cost-efficiently executed by outside providers including the following areas.
Accounting is being outsourced to major providers of industry-specific services with data exports complimentary with audit firms.
Tax services are getting outsourced to public accounting firms.
Administrative processes and services to hold and transfer stocks owned are now outsourced to industry leaders in banking, transfer, and custodial providers.
Office Space was cut back and consolidated for the employee reductions caused by these outsourced decisions. Since March 1, 2020, the office space (Hundreds of thousands of Square feet, domestically and internationally) have been vacant, as everyone is working remotely. This will continue until the fall, possibly longer.
There will be massive change and realignment of operations as we emerge from this period of quarantine, as lessons have been learned about effective uses of work processes and commitments to fixed versus variable choices of getting basic business functions accomplished.
Your Key Takeaways
Stick to running and operating your CORE business.
Outsource anything that is not your core strength and that you have not been trained to do as a business.
Examine the use of and need for core office space for administrative functions.
Supplement physical travel with virtual technologies that lower travel time and costs.
Constantly review vendor relationships and services to use virtual forms of historically in-person services to lower costs, improve the timeliness of delivery of services, and stay current of QoS.
Review performance weekly, if possible, and monthly with your team within a few days of the end of the period.
Review trends of revenues, profits, financial condition, and the use of debt or capital.
Develop short and long term strategies for survival and then growth.
Forecast and budget these strategies and monitor the progress, good and bad, as you progress during the year.
If your team, systems, or management processes are not up to the task, look for outsourced providers that can provide a turnkey subscription-based solution to replace legacy inefficient and ineffective performance with today’s virtual platforms managed by finance and accounting specialists.
Stephen Gross, CPA, CGMA, CVA, CFE — EVP of Hegemon Holdings and Co-Founder of Trusted CFO Solutions — is a big picture thinker and connector, with 40 years of rich and diverse experience in the C.P.A., business consulting, and venture capital worlds. Steve was an early adopter and evangelist of cloud-based accounting, as well as the concept of a virtual C.F.O. or Controller as a method of outsourcing the position in small businesses and startups. Learn More About Steve…