Regardless of whether your company is small, medium or large, and which services or products are the source of your profits, your company has to deal with accounting, taxes, finance, administration and other related matters. Some companies have their own employees performing these tasks while other companies have left some or a greater part of these jobs to an external professional partner. How this is resolved in your company? Do you outsource your accounting and financial needs? Are you considering it?
No matter how much accounting and financial needs are performed within your company or are left to an external professional partner, it is important to understand what outsourcing can bring and what are the advantages of contracting an external partner and letting your accounting and financial needs become the business of external experts.
The advantages of outsourcing
Companies that outsource their finances save time on administration and operational services, they operate with reduced risk and higher quality. Most importantly, they are focused on their core business, a job they love and in which they are the best because they are relieved of the jobs that do not bring profit.
Saving time and money
Contracting an external partner is cheaper and more flexible in regards to controlling costs than hiring your own employees to perform the same work.
You do not have to worry about how many hours will be spent by an employee to perform these jobs because you will engage an external partner for services that you need, when you need them. An external partner is more effective because of their experience in this highly specialized field. You will not worry about the training of specialized staff, vacation, sick leave, office space and equipment…
With outsourcing you increase the strategic objectives of the company through clearly defined plans and deadlines while freeing yourself of tasks that take up your precious time. Tactical costs remain the same because the outsourcing complements your tactical tasks. Administrative costs are significantly reduced because you leave the work to your external partner whose first and main business is administration and everything related to it. You spend less time on administration thus your expenses are lower.
Reducing business risk
Is achieved if the accounting firm you contract has insurance for professional liability (“liability insurance policy”). The policy is activated in case the user of the policy inflicts harm to the client (whether inadvertent, careless handling or the like). In this way, the client and service provider are both relatively protected while at the same time avoiding possible additional costs and legal complications if an incident occurs.
Focusing on activities that bring you profit
Using financial outsourcing not only brings financial savings but allows you to fully concentrate on your company and the job, which is the reason why you decided on an entrepreneurial venture.
By using financial outsourcing, a competitive advantage on the market is achieved due to increased productivity and the provision of the best services to clients.
Research confirms the financial profitability of outsourcing
The study “Strategic Evolution”, conducted by KPMG, showed the following results:
- 89% of respondents said they planned to continue using outsourcing
- 47% of respondents noted that outsourcing opened new perspectives
- 42% of respondents believe that outsourcing improved the financial part of their business
- 27% noted that outsourcing significantly improved competitiveness.
Using outsourcing services is growing! This branch of the industry will rapidly ascend to a higher level than it is today“. – Said Pradeep Udhas, from KPMG.
Interesting fact: how the term outsourcing came to be
Outsourcing was created in 1981 in the United States as the term “outside resourcing”; the business practice used by different companies to reduce costs and time by shifting part of the work to other companies so they can devote themselves to their primary activity.