Large Professional Institution – New accounting requirements
The problem
This organisation was either looking to streamline its accounting function, which was carried out in-house with 12 people or outsource it altogether to a third party. There was the usual membership subscriptions collection training courses and other trading activities that needed invoicing together with all internal work including the payroll, staff expenses, VAT, PAYE, investments, accounting for a large number of regional branches and other general business expenses. Added to this was also their Benevolent Fund which had similar investment functions, payments to beneficiaries and Gift Aid reclaims.
The research
We undertook a review of the situation to see if things could be done better with greater efficiency and possible cost saving and provide the appropriate report. We found that no real strategic thinking had taken place for a number of years and various areas of responsibility within the accounting functions were confused and messy.
Following a complete review of each and every function within the accounting area, it soon became clear that there were in fact only six separate functions plus two management accountant positions required.
Next came the costing exercise and once again it soon became clear that outsourcing was the most cost effective. Not only did it enable one of the Institutes buildings to be sold and provide a significant cash windfall, but the ongoing costs were also very competitive.
Following a complete review of each and every function within the accounting area, it soon became clear that there were in fact only six separate functions plus two management accountant positions required.
Next came the costing exercise and once again it soon became clear that outsourcing was the most cost effective. Not only did it enable one of the Institutes buildings to be sold and provide a significant cash windfall, but the ongoing costs were also very competitive.
The solution
Following the tendering process a three year contract was awarded. For the next three months in-depth work studies were undertaken alongside existing staff to ensure that when the transfer date was reached, very little disruption to the work flow would happen. The two management accountants remained in place and assisted with the change internally with the new culture.
It became very evident that the service being experienced by the Finance Director from an external provider was much better than he had been receiving from his own staff some six months earlier.
The whole project went very well and towards the end of the first three year term, negotiations began for a further contract. Agreement was reached very quickly and a new six year contract was signed. Not only has the client had fixed costs for the past three years but has known costs for the next six years.
It became very evident that the service being experienced by the Finance Director from an external provider was much better than he had been receiving from his own staff some six months earlier.
The whole project went very well and towards the end of the first three year term, negotiations began for a further contract. Agreement was reached very quickly and a new six year contract was signed. Not only has the client had fixed costs for the past three years but has known costs for the next six years.
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