Cost management has become a way of life and directive of organizational activities. Now most of the executives are increasingly turning to outsourcing to reduce costs, improve productivity and differentiate their functional working as the service-providers are providing it cheaply and efficiently than companies can do on their own. It also helps a particular firm to concentrate more on its core business. In today's competitive world, one should focus on revenue growth and fundamentals of value creation and some companies consider outsourcing as a strategic weapon for change. This article shows how outsourcing finance and accounting offers a powerful tool for newly privatized companies like Magyar Oil and Gas Company.

The main benefits of outsourcing finance and accounting are cost saving and improvement of process efficiency. Further, it can eliminate the headcount along with the in-office wages, real estate and insurance costs which is one big component of savings. The savings happen by simplifying and standardizing operations and the underlying business rules, automating procedures through the use of new technologies and exploiting economies of scale by offering similar services to a wide range of corporate clients.

Standardizing systems and consolidating operations are significant milestones while deciding to have shared services center or to outsource the functions for a cost advantage to external experts. Running one payroll for a one lakh people is a lot cheaper than running 10 different payrolls. The finance managers can move from routine work to more value-added things such as business planning, forecasting and financial analysis. The firm may have access to specialized knowledge, particularly tax and regulatory expertise. The advantages are on the increase as SMEs compete with low operating

Outsourcing of Finance and Accounting Activities, Cost management, Technology and Business skills, Total Quality Management, Business planning, Financial analysis, Generally accepted accounting principles, GAAP, Dynamic revenue management, Management Commitment, Mutual Trust.