The finance manager looks to the future, the accountant to the past – both are indispensable to the business. The symbiosis between the two functions helps to monitor and plan the financial position, performance and cash flow of a company. Accounting data is the most important input for financial accounting, helping to properly manage risks and investments. There is a widespread trend to outsource financial management and accountancy services to companies that are growing and developing rapidly, but it is not practical to employ a full-time financial manager and accountant. As the service is needs-based, it can be the best solution for both large and small businesses.
Accounting workloads have been reduced so much thanks to modern tools that the workload of a salaried accountant is generally not so great, and this means that the accountant is also being added to by the duties of office manager, secretary, procurement specialist, etc. This means that they don’t have time to concentrate solely on accounting and are not able to keep up with accounting updates. By outsourcing to a service provider with more than three accountants, the client gets a whole capable team with a huge amount of combined knowledge and experience. When a problem arises, there is always a solution at hand, someone who knows the right approach. Information on all sorts of topics comes into the office, we don’t have to search for it in general. The experience gained with one client can be applied to others.
FMJ Accountancy Services offers accounting services to businesses as its core business, but the recent trend shows that there is a growing desire to outsource the services of a financial manager. According to Kaie Moisa, Managing Director of FMJ Accounting Services, it is always the case that when a new client comes to us who previously had a salaried accountant, these procedures are very time-consuming. For example, the payroll of 100 employees is done in Excel and the accounting software does not use the existing facilities but is largely manual. In addition, tax exemptions that have been in place for years have not been used. Whether this is being done out of ignorance or with the aim of increasing their workload is difficult for me to say,” Moisa discussed.
In addition, outsourcing gives the possibility not to burden the accountant with assistant work, which would probably have to be done on the client’s premises, otherwise the burden on the accountant would be too small. This is what the chief accountant does – compiling the financial statements, analysing them, advising and consulting the client. During the spring emergency, the FMJ did a very thorough job of explaining the issue of pay during the emergency “initially there was not much material, we worked through what we had, asked the Estonian Unemployment Fund for more and really felt that we had a team that knew everything about the subject. We were able to do a division of labour within the company, with some people working in parallel to clarify the issue so that we could discuss and debate amongst ourselves that we had got it right, and advising all FMJ clients and acquaintances, friends and family members of clients on the issue. According to Kaie Moisa, a lot of people needed this information, “it was felt that working alone, an accountant could not do everything, because there was also a lot of work to be done, which is why accountants from many other companies asked us for help, even companies that actually have an accountant on the spot and are not our clients. Employment law is a very broad subject, but as we calculate monthly remuneration for about 500 employees, we usually know the right way to behave when problems arise and we can advise our clients on this,” Moisa explained.
Meelis Tint, CEO of Oü Liisbet Invest, who outsources accounting services, shares his company’s experience where outsourcing has paid off. “We chose FMJ as our accounting service provider because our interaction with them gave us confidence that they had the broad experience and capability to provide a comprehensive approach to our finances, as well as the innovation and interest in providing a range of options for management to manage cash flow. As a result of years of cooperation, many fruits are already being shown,” says Tint. “The advantages of outsourced accounting services are a fresh perspective, a good understanding of business processes, and the competence to create a long-term strategy as well as to solve current problems operationally.” he adds. “Our experience has confirmed that the holistic view of their team and the company’s readiness to contribute to business development through various new financial solutions is a combination that leads to results and enables the creation of new profitable investments”, summarises Meelis Tint.
As a result of successful financial management, companies are able to avoid financial difficulties, often bankruptcy, and increase their profits. However, the biggest benefit of outsourcing is to keep costs down, as it is usually cheaper to outsource than to have a paid employee. Under FMJ’s leadership, a seven-member finance team manages the full accounting for more than 100 companies.
AFMJ has offices in Jõhvi and Tartu, but clients are located all over Estonia. There are a wide range of customer activities, with more customers in the service sector – accommodation, catering, but also construction, all kinds of manufacturing, brokerage, agricultural companies, etc. Estonia is too small to be able to choose a client based on the field of activity of the client, and you really don’t want to, because every new field is a new and interesting challenge for an accounting firm. A recent trend is that public sector companies are finding us to outsource. Managers who are innovative and interested in business development will understand the value of outsourcing so that a utility or care home does not have to have a salaried accountant on site. The basic argument is that we have 400 invoices a month, we have to hire a person to do that, the reality is that we have to have a system that is as automated as possible to generate those 400 invoices in one day and send them out.
