Consider your firm’s bottom line when thinking about in-house vs. outsourcing reconciliation.
But finances alone aren’t the only factor.
- What will make your life easier?
- How much talent is available?
- What will help your operations adjust to changes more quickly?
Maybe the solutions are (already) there internally, or solutions can be attained through outsourcing.
In-House vs. Outsourcing Reconciliation Reporting: Points to Consider
There is no shortage of expenses. You have employee salaries, plus benefits and occasional bonuses.
Then there are recruiting, training, and turnover costs.
Purchasing and implementing new technology also has a price tag.
Do you handle these costs well or have you struggled with them? If you’re struggling, outsourcing middle- and back-office functions might reduce some of the expenses.
Some like the simplicity of the reconciliation reporting done in-house. As operations director, you’re right there to see it all, and you can provide assistance when necessary.
Perhaps your ideal is to have the reports processed and finished immediately after the trade data is available from the custodians.
But the data might be released at 3 or 4 o’clock in the morning, and finding someone willing and able to get up at o’dark hundred could be a challenge.
A reconciliation outsourcing provider could have the reports done before you get to the office in the morning. Likely the provider will be in a time zone that is favorable for getting the work done at a time you should spend sleeping.
Some investment companies may have all of the talent they need in-house, and they have no trouble replenishing their ranks when employees leave. If your firm is in the situation, it’s becoming increasingly an exception, not the rule.
Whatever talent there is currently in-house, those individuals may lack the expertise in portfolio accounting software and robotics process automation (RPA).
If you have that high-level talent, perhaps there’s not enough, and you’re worried about key-person risk. If that back-office superstar leaves your firm:
- will the reports get done?
- will they get done on time?
- what will the reporting accuracy be like?
Outsourcing could mitigate some of that risk by providing you with a team of portfolio accounting specialists who specialize in your software and can implement the new technology your operations needs.
When you look back at times where your firm has experienced growth or contraction, how have your operations handled these situations?
In times of growth, were you able to:
- add staff quickly?
- get quality staff?
- maintain reporting accuracy?
In times of contraction, did you ever:
- let staff go, only to realize a year or two later you would need them again?
- struggle with giving your back-office team enough work to do?
- find it hard to cut costs to match workloads and budgets?
Have these processes gone smoothly enough to where issues were minimal or non-existent, or has it been a trouble spot?
Fund administration outsourcing companies that specialize in reconciliation reporting could help your firm deliver a more scalable operations. They should have the expertise and resources to provide you with labor when you need it, and they can easily subtract it when your workloads decrease. The process should be smooth.
Make Your Operations as Great as You Want
When comparing in-house vs. outsourcing reconciliation reports, think about your costs, what is convenient, access to talent, and scalability.
You might conclude your operations are doing just fine keeping everything in-house. Your costs are under control, you have the talent you need, and your operations are ready for any changes that come. It’s convenient for you.
You may also realize how bad things are: costs are too high, there’s a talent shortage, and there’s no scalability. To say it inconveniences you might be an understatement. Some of those issues could be solved internally, or a reconciliation outsourcing services provider could help.
Whatever solutions you seek, you have the options in making your operations great for once, great again, or greater than they already are.
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