PR - VWA Predicts Growing Demand for BPO and ARM Services

Garden Grove, Calif.-based Vengroff, Williams & Associates (VWA), a leading provider of receivables management and business process outsourcing solutions, today announced its predictions for 2008. Backed by industry analysts, the company believes that demand for finance and accounting (F&A) outsourcing will increase as CFOs prepare for a tough economy.

“The expectation is that outsourcing in the financial services industry will grow as buyers seek to reduce operating costs, avoid investments into new systems and capabilities, shift focus to more strategic activities, and leverage their growing supply of skilled global resources,” said Stan Lepeak, EquaTerra’s Managing Director of Research. “This trend in financial services illustrates that outsourcing as an industry has become ‘recession-proof’ and that outsourcing is a tool buyers use in up markets to improve performance and in down markets to reduce costs and remain competitive.

IDC Research also predicts that F&A outsourcing will increase. According to their recent research, IDC estimates that U.S. spending on F&A BPO services amounted to $9.4 billion in 2006 and expects this market to grow to $19.4 billion by 2011, a five-year CAGR of 15.6%. Source: IDC, “Worldwide and U.S. Business Process Outsourcing 2007-2011 Forecast: Market Opportunities by Horizontal Business Process,” Doc # 208290, September 2007.

“Since credit is now harder to come by, cash is once again pinnacle,” said Mark Vengroff, CEO of VWA. “As such, we expect companies to elevate receivables to their 2008 list of priorities as CFOs have to make sure their receivables are in tip-top shape to ensure steady cash flow.”

Based on feedback from clients, partners and industry experts, VWA sees the following specific trends emerging:

• The Return of Risk – Before the credit turmoil, a combination of low interest rates, plentiful liquidity, a strong economy, and a hot real estate market made investors less risk adverse and therefore made funding easily available to issuers, including speculative-grade companies. However, with the credit squeeze in full swing, expect to see a tightening in the credit management function and a push for more scrutiny over credit worthiness across all industries.

• Cash Flow Optimization and the Coming of the Financial Supply Chain – Especially with today’s credit market fears, cash is once again king. To that end, CFOs will put additional emphasis on making sure their financial supply chain and therefore their cash flow is optimized to ensure they are able to ride out the anticipated tough economy.

• Growing Pressure to Shake up the Entire Accounting Process – From the move to fair-value accounting, which could affect everything from hedging strategies to emissions credits, and a push to overhaul financial statements to make them better reflect corporate performance, the industry as whole is about transparency and efficiency around financial processes.  Above and beyond government regulated changes, CFOs will be taking extra measures to mitigate risk, which will likely result in additional documentation, disclosures and in general more business processes.