Page 175 - E2 Integrated Workbook STUDENT 2018

The finance function

6.5 Contractual relationships and service level agreements (SLAs)

One of the most important aspects for organisations to consider when outsourcing
the finance function is how they will manage the relationship with the outsourcing
party.

The agreement between the organisation and the outsourcing party is a contractual
one. The organisation must set up a binding contract with the third party to undertake
the required activities on their behalf. It is essential that these activities are done to
the standards required by the organisation and that they have redress available to
them in the event of the outsourcing party not performing as required.

Service level agreements (SLAs) will set out exactly what is required by the
organisation. These SLAs should be agreed by both parties and should form part of
the outsourcing contract. It is important that the SLAs are measurable and are
measured on a regular basis. A relationship manager should be appointed by the
organisation to oversee the work carried out by the outsourcing party and to monitor
the compliance with the SLAs.

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