Most of the outsourcing companies fall under the SME category, and these very small and medium sized businesses make an integral part of any economy. Despite being smaller in their size as compared to the companies that outsource business operations, outsourcing companies form the backbone of the bigger industry. Although almost all of the business operations that are taken over by outsourcing companies are done more productively and efficiently but accounting and finance operations have a bigger significance.
Financial and accounting outsourcing services are not exactly auxiliary activities, but since they do not directly lead to revenues and profits, they are usually outsourced to external companies. The primary advantages gained from this outsourcing are cost savings, operational efficiencies, and accurate reporting as per the statutory requirements. An added benefit is of course that of increased competence when the businesses outsourcing such operations get to focus their time and resources to core activities.
However, there are a couple of factors that affect how successful the outsourcing services can get for accounting and finance. These are as important for the businesses outsourcing them as they are for the BPO companies. Let’s go over them one by one.
The most important factor remains the cost of outsourcing. If the price of getting an external company to do these tasks is not lower than getting them done on your own, then there is little point left. You might still gain efficiency and higher productivity, but financial considerations remain the key point. Furthermore, since there are always outsourcing companies that are providing you the cost benefits in addition to all the non-price benefits, why settle for less? However, be mindful of the fact that the cost should not be too low either. Ridiculously low prices may appear to be a catch but they will only end up making outsourcing companies work less than their best.
The location of the outsourcing company is not only important with respect to their skills in understanding the legal and operational processes of the area of your business, but it can also become an additional source of cost savings. In some cases, it is better to have a BPO partner that is located closer to you so the risks of any miscommunication or difference in financial statements are mitigated. In other cases, an off-site outsourcing company might have better qualified personnel and lower prices giving you two times the advantage.
There is a reason beyond cost savings which makes businesses opt for outsourcing the finance and accounting processes. That can be improvement in operational processes, better legal compliance, or any number of targets. The idea is to choose the outsourcing partner that can provide you exactly what you are looking for. For instance if the only thing you want is savings on costs, then you will be better off by outsourcing the entire process. However, if you need one specific area of the accounting and finance process, then you should only hire a BPO company for that segment to achieve the best results.
Accounting and finance processes are extremely valuable for any business, big or small. They not only reveal the financial position of a business but also dictate the future strategies for growth and expansion or austerity and contraction. Therefore it is imperative to check the security status of the outsourcing company and their procedures to protect your data. You can check the layers of security in your potential outsourcing partner, check with their past or existing clients and also take a look on how frequently they conduct their audits. The cyber security is as important as physical security detail these days so keep an eye out for that too.
Flexibility and Customization
Finally you need to make sure that the BPO company you are planning to take on board offers the necessary flexibility in their staff and operations for finance and accounting segment and can also customize their processes to suit your needs. For instance, if your business is one that depends on seasonal fluctuations you need an outsourcing partner that doesn’t splash you with lump sum cost of twenty-five people when the work was only doable by five. Same goes for irregular time periods you need your accounts and finances taken care of. The outsourcing company needs to be able to provide their services as and when your business demands. The above mentioned factors are universally influential on finance and accounting outsourcing services, but they are not limited until there. Frequency of operations and transactions, specificity of assets, mutual trust and opportunity from either end of this business deal, as well as the competition in the market are all factors that can affect the efficiency and success of outsourcing these segments for your business. Therefore it is imperative to do a thorough study and find the perfect BPO partner that works as an extension to your business with similar focus on quality and performance based results. Intersoft BPO is one such bet for you that will never let you down. Try us!