As a good Brazilian friend and colleague used to say to us Finance guys: “Our job as finance people is to let the CEO sleep well every night”. You know what? He was right back then and is still right today.
It was a very simple and straightforward way to summarize the multiple, complex, and sometimes demanding functions and roles any typical finance team plays in any business. Irrespective of the size, nature, or geography, businesses do need to be well-controlled – all times, any time!
Take the case of a nice-looking, a bit expensive and no doubt fast (and furious) red-colored 2016 Ferrari 458 MM Speciale. This Ferrari was built to reach up to 202 MPH and goes 0-60 in only three seconds but if it lacks the high-end, advanced technology of a carbon-ceramic braking system, the journey may not end well. So you would agree with me that it has to have a strong, high quality, and ready breaking system to keep you safe especially when you’re going fast and furious, right?
It is quite the same with businesses: no matter how fast and stable your company is or how well it is doing on revenue growth, cash flow generation, share price performance, shareholder dividends, etc., you will always need a robust, objective, and preventive internal control framework that allows the business to detect, prevent, and correct any abnormal activity or transaction risk that can quickly and unexpectedly become a nightmare for finance executives. This was true when Sarbanes-Oxley (SOX) rules came into play back in 2002 and is just as true today.
Objectiveness is the key—it demands qualified professionals with a high degree of integrity and commitment to drive continuous improvement across an extensive list of internal controls underpinned by leading edge technology. And objectiveness can go further when you have “the eye” of an independent process services provider in the game that will follow a contract and stick to the SLAs and governance framework agreed with your business.
A BPO services provider can serve as a finance process specialist to run the control and test whether all defined criteria have been met to validate, for example: that goods were delivered, the client has accepted them, and all applicable taxes were calculated, booked and reported accordingly. By having an objective third party who does not know your sales-agent (who fights the fight every day to meet the sales-target) or your people collecting receivables, or the guys in charge of inventory at the warehouse, you remove potential bias that may affect the report and potentially have a negative impact on your business.
So what is the actual role of a provider in a rigorous, state-of-the art internal controls environment?
I have listed a few key-reasons to get a third-party specialist involved:
I do want you and your CEO to sleep well at night and when you are in the driver’s seat of that beautiful, red-colored Ferrari 458 that I spoke about earlier and you hit the break-pedal, you can trust you will arrive safely at your destination.