Well after lot of deliberation and thought you have finally decided to outsource your finance and accounting function. We are quite sure that cost is not the only factor in making up your mind to outsource. If it is, please go through below factors as well before you decide to outsource your books before it is too late:
Are You Spending Too Much Time on Daily Task? If you are owner of a small business and find yourself spending too much time on compliance and admin tasks, then outsourcing could be an option for you.
Always Need to Make Changes in Accounting Software: Well with the constant change in laws and reporting requirement, it has become quite common for most of the businesses to constantly upgrade their accounting application. Take for example GST is to be implemented soon and you might be required to make changes in your tax master and expert help might be required to comply with the law. Inevitably in such scenarios, outsourcing becomes a must rather than option.
Process Gap: Just imagine at the end of the month, when it’s time to pay your sales people incentive, accounting numbers are different from numbers given by sales team. Whom do you believe? In effect there is a process gap which ensure that’s numbers are consistently reported throughout the company. Outsourcing could be help in this regard, as the service provider tends to be dispassionate and will only report what’s true and set up the right process in this regard.
Difficulty in Hiring and Training: How many times it has happened you have trained an accountant only to find that after six months he leaves the job without proper knowledge transfer. This episode repeats indefinitely. Outsourcing could help as the service provider will be responsible for the seamless delivery of services.
Timely and Inaccurate reports: It is very common place to see a business owner evaluating his business numbers at the end of year, by that time it becomes very late to react and take proper decisions. With outsourcing, you can clearly define the deliverable and make your service provider responsible for timely and accurate reports.
Improving Company Competitiveness: If you are looking to improving the competitive advantage then outsourcing could be a better option. But again it depends on the engagement model, whether you want to have strategic or operational alliance with service provider. In strategic model, the service provider knows the expectation well in advance and therefore can plan and monitor the quality of his services. This way you know your future cost and benefits to be expected from the outsourcing engagement. In long term it has a profound impact as key executives in your business including you will be focusing on core activities of business like revenue generation, increasing profitability, expansion and investment initiative. Essentially you free up lot of time.
On other hand in operational model, a client typically changes the requirement on adhoc basis thus affecting the deliverables and quality of services. Typically in such engagement models focus is geared towards recording financial transactions and not on business insights and intelligence. Ideally speaking once you have identified a service provider, you should go for strategic alliance model.
Access to Experts: If you are in a business which needs constant monitoring, tweaks coupled with changes in regulatory requirements, then expert help is needed. In such a scenario, outsourcing makes sense because you are not bringing an individual on board but team of experts.
Risk Management: Typically when the finance and accounting function is handled internally, there is an inherent risk that bringing things back on track as far as the processes are concerned will take time when a team member leaves the job. There is also a risk that business might be exposed to various tax regulations and requirement of which internal finance and accounting team is completely unaware of entailing huge pay-out in form of penalties and interest to various tax authorities in future. If you doubt the capability of your team then outsourcing could be an option
Turnaround Time: Many times an employee takes the job for granted and in process turnaround time suffers. In case of outsourcing you can hold your accounting service provider for a definite turn-around time In long-term it can have a huge impact in making key business decisions.
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