Record to report: which parts should you outsource?

Key takeaways

The record to report process (R2R) runs from recording transactions to producing management and statutory reports. Most of its hours sit in recording, reconciling and preparing, which outsource well. The judgements, such as accrual estimates, provisions and sign-off, stay with the business and its accountant. Split it at the review step.

• Record, reconcile and prepare: usually outsource.
• Estimates, provisions and sign-off: keep.
• Split at the review step, not in the middle of recording.
• Agree a close calendar with dates for each stage.

What are the steps in the record to report process?

Record to report has five broad stages. Each has a clear input and output, which is why the early stages outsource well.

• Record: post sales, purchases, bank and payroll transactions.
• Reconcile: bank, control accounts and supplier statements.
• Adjust: accruals, prepayments, depreciation and provisions.
• Report: produce management accounts and commentary.
• Review and sign off: check, question and approve.

• Which business processes should you outsource?
• Month-end close: how to finish faster with less effort

Which stages of record to report can you outsource?

Recording and reconciling are rule-based and high volume, so they move first. Routine adjustments, such as monthly depreciation and recurring prepayments, can move once the rules are written. Judgemental adjustments, the commentary on what the numbers mean, and sign-off stay with you or your accountant, because they need knowledge of the business and carry accountability.

• Bank reconciliation outsourcing: daily, not month-end
• Supplier statement reconciliation: catch missing invoices
• Fixed asset register: keep it current all year

How do you split record to report cleanly?

Put the split at the review step. The provider records, reconciles, posts routine adjustments and prepares a draft pack with a list of open questions. Your finance lead or accountant answers the questions, makes the judgement adjustments and signs off. A close calendar with a date for each stage keeps both sides on time.

• Management accounts: outsource the pack, keep the review
• Outsource, split, fix or keep: four process verdicts

When should record to report stay in-house?

When transaction volume is tiny, when your accounting system is unreliable, or when the books need a clean-up first. Outsourcing a messy ledger moves the mess. Fix the chart of accounts and the opening balances before handing over, or the provider will spend its hours untangling history.

• Should you fix a process before you outsource it?
• Doing your own bookkeeping: what it really costs

What does this look like in practice?

A pattern we see: once recording and reconciliations run daily rather than in a month-end rush, the close shortens without anyone working faster. The work was always there; it was just arriving all at once.

• See client work
• BPO Solutions for UK businesses

Record to report checklist

Check these before splitting the process.

• Chart of accounts is clean and agreed.
• Opening balances are reconciled.
• Rules for routine adjustments are written.
• A close calendar sets dates for each stage.
• Open questions go in one log.
• Sign-off stays with a named person.

• Finance processes to outsource, and the ones to keep
• The process selection score: outsource, split or keep?

Next step

Tell us how your month-end runs today and who does each stage. We will show you where we would split it and what you would need to prepare.