Brazil’s Best Counsel 2022 - Chapter Opening: Outsourcing (BPO)

Posted Monday, December 13th 2021
Brazil’s Best Counsel 2022 - Chapter Opening: Outsourcing (BPO)

BPO: Business Process Outsourcing

Organizations that count on professional experts in accountancy, finance, taxes, systems, managerial and financial controls have many competitive advantages.

It's slightly frightening that in the 21st century, despite the above statement, that many businessmen still do not give due value and attention to the accounting, tax and controlling departments of their companies.

Many are unaware of the costs of services and products, don't know the profit margin of each product, the effective tax burden over their businesses, often work without cash flow and budgeting, among other examples that take them on a kind of unaided flight without many key instruments.

Market competition usually leads to cost-cutting which, most of the time, results in layoffs and staff reduction, or the search for accountant and financial services at lower prices.

This overview intends to present a series of advantages for small to medium-sized companies upon hiring specialized consultants in accountancy, taxes, finance and controlling, also known as BPO services:

i) Technology

It's not necessary to talk extensively about how expensive technology is. Its implementation takes time and money, demands follow-ups and proper equipment.

Accounting firms with highly technical standards have integrated systems available within the organization.

So, in a very short amount of time, without investing in software and robust equipment, the company can count on advanced management and control tools that will simplify, on a daily and more relevant basis, avoiding rework, defective sheets, and personnel reduction.

ii) Anti-fraud security and errors

Integrated systems have systemic security and internal control structures which reduce the chances of errors and fraud.

iii) Correct and timely managerial and accounting information

By hiring a specialized firm, before the work starts, experienced professionals of each of the specialized areas of BPO fir (accounting, taxes, IT, financial control, controlling and HR) perform critical diagnosis of accounting, financial and managerial existing controls.

These professionals understand the specific need for info required for the proper business management. They discuss and guide businessmen on the importance of the utility and advantages of this information.

After being discussed and approved, routines are implemented and services to be developed are defined, as well as deadlines and agreements on the level of service.

This way, information is produced and delivered at the right time, error-free.

Based on it, decision making is safer, always counting on the support of professionals with large experience in business management.

iv) Permanently trained and up-to-date experts

BPO services count on highly qualified and permanently trained personnel, capable of answering to the services demands in a fast and professional way.

With the support of experts and the safety and quality of accounting and managerial info, companies can focus on their core business and their decision-making processes.

v) Tax experts

Another decision-making factor for companies to outsource their back-office activities is the complex tax system in Brazil, that demands a vast legal knowledge about dozens of different taxes and the production of hundreds of controls and reports.

Counting on direct and indirect tax experts can be another competitive advantage.

Many companies don't make use of all the possibilities to recuperate legitimate tax credits or make wrong options in taxing their profits.

There are many cases in which companies are surprised by high penalties and fines because of tax mismanagement.

By hiring the right firm for tax management all of the problems mentioned above are mitigated.

Another advantage of counting on expert support is that high performance companies, in terms of accountability services like BPO, work as a “controlling” area.

Hiring arrangements can be made to include fundamental features involving Management and Finance. For example:

a) Supporting Strategic Planning, including support and follow-up of short and mid-term goals for company's departments, and the necessary actions for reaching them. This is a powerful tool to help competitive organizations.

b) Support to define Annual Budget aiming to help the decision-making process, as detailing all the goals and expected results, as well as their monthly follow-up. Deviations are readily identified and action plans are established.

c) Implementation and cost control, with the definition of an accounting cost plan, including fixed and variable ones, allocation criteria and diverse apportionment. This tool is essential for proper pricing, margins and profits.

d) Following up the result and identifying possible deviations.

e) Implementation of diverse internal controls, development and policy, norms and procedure formalizations.

BPO offices, more and more prepared and structured with systems, personnel and processes, are absorbing many controlling and finance functions, creating opportunities for businessmen to focus on their main deals, on growing and leading within their markets.

These advantages were observed by major organizations, that with each passing day, outsource their accounting, finance, controlling and HR management activities with accounting firms prepared to work by Brazilian and foreign accounting rules, with professionals fluent in many languages, using more sophisticated systems that meet deadlines in an adequate way.

Maintaining the trend in 2021, the expectation is that in 2022 the BPO market will expand, especially because of the movement of the outsourcing of services for large national and multinational companies.

Assess the advantages of having the support of BPO services. You'll certainly be surprised with the evolution and professionalization of service providers, supporting organizations with high quality services.

If you already hired an accounting service provider, make sure that you made the right choice, taking into consideration services provided by high performance firms.


About the Authors:

Paulo Carvalho

Partner Paulo José de Carvalho has more than 30 years of experience the in management and execution of BPO, external audits, M&A and consultancy work, having spent the last 29 of his career at PP&C.

Phone: +55 11 3883-1600

Marco Aurélio Silva

Marco Aurélio Silva has more than 30 years of experience working with controllership and finance and frequently advises medium-sized and large national and multinational companies.

Phone: +55 11 2231 1227