N E W S & N O T E S
5 Advantages of Outsourcing for SMEs.
by: Mary Christine Galang
Wednesday, August 23, 2017 |
The outsourcing industry has been a strong economic driver for many countries across the globe, particularly in India and the Philippines and many businesses have long since taken advantage of it. From simple back office jobs to knowledge and information sectors, there is no undermining the rise in demand and variation of services being outsourced.
Nowadays, outsourcing is not limited to larger companies. Due to technological innovations and continuous changes in policies and regulations, small- and medium-sized enterprises (SMEs) are now also facing a more challenging operating environment.
The focus for most SMEs (and startups as well) is to ensure that their business cultivates a high competitive advantage. For this reason, outsourcing has become a popular choice.
Outsourcing advantages
1. Lower costs. This is the number one reason why many companies, big or small, choose to outsource in-house functions. You can avoid large expenditures such as equipment, renting or buying office space, as well as traditional manpower costs like employee benefits. Your savings on fixed costs can be directed instead to variable costs, allowing your business to allocate your capital to revenue-producing activities.
2. Work efficiency. Primarily, outsourcing ensures continuity of operations, which cuts on delays. But its most important time-driven advantage is that time-consuming tasks can be passed on to your outsourcing partner.
3. More focus. In relation to the aforementioned factor, SMEs who usually multitask in order to meet with operational demands can now focus on developing their strategies and core competencies.
4. Access to experts. Outsourcing companies are staffed with highly competent, trained personnel that often specialize in niche or various fields who can substantially improve your company’s performance.
5. Reduce risk exposure. A crucial factor in any project of any scale is risk assessment and analysis. Seasoned outsourcing companies handle and manage this for you. Furthermore, they can also act as your advisor in terms of risk reduction and mitigation.
The Top Five Benefits of Outsourced Accounting
RAFAEL VIDAL, CPA ON DEC 14, 2017
Business conditions are changing and outsourcing is on the rise.
Today’s business owners are facing greater expectations when it comes to financial transparency and government compliance. All too often, businesses are juggling day-to-day responsibilities alongside more complex and time-consuming tasks such as finance, accounting, compliance, internal audit, and risk management. They are simply trying to do more with fewer resources.
Increasingly, businesses, both large and small, are turning toward outsourcing as their preferred solution—with accounting being one of the primary outsourced tasks. In fact, many business owners are finding that outsourcing provides a unique opportunity to receive accounting support from talented professionals without the added overhead associated with in-house resources.
ProNexus, a leading management consulting and professional services firm, has identified some of the advantages of outsourcing accounting tasks, including:
1. Accessing Expert Advice.
In The Economist, Tom Peters argues that if the output of an in-house accounting division cannot be successfully sold on the open market, then business owners should subcontract work to firms that specialize in accounting. Why? Accounting experts live, eat, and breathe their job. They can do it right and do it cost effectively.
By teaming up with a firm, you can feel confident that only the most qualified individuals are handling your finances in an unbiased and objective manner. Services are often tailored and scalable to bring you the right expertise at the right time for greater flexibility across the board.
2. Meeting Compliance Requirements.
Accounting experts are up-to-date on all the latest regulatory requirements. They are attuned to what is happening across the industry and carefully monitor relevant laws and regulations to stay current on processes. You can gain the peace of mind in knowing that your accounting tasks are done properly by a qualified expert in the field.
3. Reducing Business Costs.
A recent study conducted by the General Auditor Information Network (GAIN) found that an average audit department produces 1,400 hours of productivity per employee each year and absorbs the remaining hours as the price of having the department. With outsourcing, you only pay for the services you need, when you need them.
Firms have the ability to accommodate your cash flow realities and organizational risks gaps to ensure that you’re getting the most out of your investment. Business owners can choose full outsourcing, co-sourcing, or even specialized resource enhancement to help address temporary staff shortages.
Even better, firms manage the relationship between the experts and the business, meaning business owners don’t need to worry about personnel carrying costs or turnover. You can downsize or upsize accounting needs without dealing with traditional personnel challenges such as the risks of unemployment claims or the need for new hire healthcare packages. Businesses also no longer need to allocate time or money to training and recruiting efforts; two tasks that typically bog down in-house resources.
4. Improving Productivity.
With a team of experts in place, business owners can rest assured that the accounting responsibilities will be completed on time. In fact, accounting tasks are streamlined to produce higher quality results and frequently include powerful analytics to help you better understand budgeting concerns and business performance. Suspicious activity is also immediately reported to the business owner, which reduces the likelihood of fraud or government penalties.
5. Gaining Valuable Time.
With the right outsourcing provider, a business owner can receive support for his or her accounting functions, freeing up valuable time and allowing for better workload management. Firms often provide help with a range of treasury and cash management tasks such as working capital optimization, cash flow preparation, credit facility analysis, debt compliance monitoring, investment monitoring, and even special projects such as initial public offering preparation. This means business owners can delegate responsibilities and redirect their focus on what really matters to them: the future of their business.
Focus On Growth: Benefits of Outsourcing Accounting
by Nicholas Sinclair in The Accounting Blog
Businesses are always under intense time and cost pressures. They must produce creative, advanced and original product line while continuously reducing costs and optimising their resources. Most small to large scale business owners struggle to be completely in control of everything and, as a result, there is no time or energy left to spend on their key strengths.
So as your company thrives and grows, you will eventually have someone in to help you improve your accounting processes and the way you do business. Whether you’re on the fence or fully settled, it is good to have a solid understanding of what outsourcing means.
You outsource services when you contract an individual, company or firm to provide services for your business. Small companies usually outsource the services of a chartered accountant. Others have a bookkeeper on staff while some businesses outsource bookkeeping services as well.
Now, does outsourcing make sense for you? Here’s a look at the specific advantages it may offer:
· Significant Financial Savings
The real value of outsourcing accounting is that it reduces costs. By outsourcing your bookkeeping operations, you’re only paying for the accounting help you need when you need it with absolutely zero employee-related cost to deal with. Worry no more on the typical employee expenses like benefits, insurance, payroll taxes, paid leaves, etc. Generally, you only pay for what you need—nothing more, nothing less.
· Expertise on Your Side
By teaming up with a firm, you will have an access to expert advice and confidence in financial reports that meet regulatory and compliance standards. Third-party service providers specialise in the work they do, so they are the perfect resource for getting projects done that keep up with the competition. You can gain the peace of mind in knowing that your accounting tasks are done properly by qualified, experienced and knowledgeable professionals in the field.
· Access to the Latest Technology
To ensure that they’re always at the forefront of technology, providers pride themselves in developing their accounting systems and techniques. With the right outsourcing provider, you’re not only getting trained staff to handle the job, you also get access to leading accounting software.
· Focus on Your Core Business
It is beneficial to the growth of your business to outsource administrative tasks like bookkeeping and accounting to focus your energy and time on growing your business. You won’t get distracted by worrying about what is happening on the back-end of your business. By outsourcing, you can stay focused on your core processes and your clients.
The driving force behind the decision to outsource is the ability to focus on core competencies. It is plain and simple that outsourcing allows businesses to be more efficient, more effective, and more competitive. Could outsourcing help you achieve your company’s goal and lead your direction to success? It’s time to turn the dice.