With the environment for global corporate services becoming increasingly complex from a tax, economic and regulatory perspective, Richard Mukungatu highlights how outsourced accounting can supercharge the strategic growth capabilities of internationally-dynamic businesses.
Q: What are the drivers behind a firm considering outsourcing its accounting function?
Richard Mukungatu (RM): The reality is that accounting as a function has evolved considerably over the years. It is no longer just a back-office role – the complexity of global and domestic tax systems, coupled with increasingly sophisticated reporting and disclosure requirements has meant that accounting is inevitably interwoven with multiple other areas within international businesses – from compliance and risk, to change, operations, finance, and reputation management.
We are seeing that complexity driving considerable demand for specialist outsourced accounting support, in multiple ways and at various levels, according to the diverse needs of businesses.
Q: How has that evolution been mirrored at JTC, in terms of its outsourced accounting proposition?
RM: We’ve seen demand for comprehensive, professional, specialist outsourced accounting support expand significantly in recent years, and our own service line has expanded and grown alongside that demand. Today, the team has experience in supporting a broad range of clients, ranging from asset holding vehicles like JPUTs and other Special Purpose Vehicles (SPVs), to Limited Partnerships and Special Purpose Acquisition Companies (SPACs). We’re also supporting a growing number of firms with their listing ambitions, both pre-listing and through actual placement.
Ultimately, whatever is outsourced, whether it is specific expertise or full financial control, has to meet the needs of clients, so it’s important to be flexible and tailor the service accordingly.
Q: Tell us a bit more about how outsourced accounting can be tailored?
RM: Today we have teams in Jersey and South Africa supporting international businesses with all aspects of their accounting needs. That can range from providing a fairly straightforward traditional bookkeeping service to more bespoke levels of support, which might include working with a business, perhaps through a hybrid model with their existing team, to help it flex its finances and budgets on certain projects or initiatives.
At the far end of the spectrum is the fully outsourced model, whereby the team will provide all aspects of governance, due diligence, NAV reporting, liaising with lawyers and third parties, or guidance through pre and post IPO procedures. It can even play a ‘virtual’ finance director or financial control role.
Q: What are the emerging areas in this space?
RM: It’s no surprise that the high interest rate environment we are seeing at the moment is prompting concerns from borrowers and lenders – there’s definitely a need to provide insight, forecasting, scrutiny and support in that space. It’s a real, live example of how outsourced accounting is playing not just a back-office function, but a strategic role in enabling businesses to navigate a challenging environment.
ESG, impact and sustainable investing is also another big area where we are seeing rising demand for specialist support. Businesses are alive to the need to be aligned with best practice when it comes to disclosure and reporting – and best practice, rules and frameworks are constantly changing, so that’s driving demand, both from an outsourced accounting point of view and in tandem with JTC’s Sustainability Services proposition.
Q: What role is AI playing in supporting outsourced accounting capabilities?
RM: There’s no doubt technology is increasingly important. AI and digital tools are pivotal in enabling accounting teams to increase productivity and manage volumes of data at scale – when it comes to reconciling data or bookkeeping, for instance. Technology is also playing an increasingly important role in safeguarding sensitive data.
Q: How do you see the outsourced accounting space evolving over the coming months?
RM: Overall, multijurisdictional tax laws and rules are becoming increasingly complex and, combined with the volatility we are seeing in global markets this year, businesses with growth ambitions are finding themselves under mounting pressures in realising their aims. That will continue to drive the demand for specialist support from an accounting and financial control perspective.
Businesses are also increasingly appreciating the benefits outsourcing can bring – it can reduce risk and the costs of employing personnel, and enhance productivity, resilience and scalability by being able to draw on the broad expertise of a whole team.
Ultimately, the objective is to enable clients to focus on their core business and take the hassle away when it comes to the complexities of financial control and associated accounting functions. In the current environment, that’s a powerful proposition.
How can JTC help?
JTC provides corporate, trustee and administration services in relation to a broad range of structures including companies, investment holding and financing vehicles, joint ventures, corporate acquisitions and disposals, and listed vehicles.
Administering complex structures is a core part of our business, with our expertise gained from many years of practical experience.
To find out more, please contact Richard directly.