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Archive for the 'Outsourcing Research / Trends' Category

Back office outsourcing can be defined as a subdiscipline of business process outsourcing (BPO) wherein back office tasks or essential non-client facing support positions are outsourced to onshore or offshore outsourcing companies.

In the evolution of back office outsourcing, we have seen that more and more specialized back office tasks are being handled by BPO companies.

Back Office Outsourcing

Back office outsourcing provides a vital link to businesses to provide them with more technical and robust manpower that will enable small businesses to immediately scale its operations without additional capital expenditures.

Some of the back office jobs that are being outsourced are the following:

  • Human Resource Recruitment
  • Accounting and Finance Services
  • Data Encoding and Data Processing
  • Support Desks

As you can see, these jobs require technical and particular skill sets to be able to perform the tasks expertly.

Companies Need To Use It

With the growing demand to be globally competitive, companies need to cut their operational costs. More often, companies are hesitant to outsource their back office jobs because of perceived loss in operational management.

This is true with traditional outsourcing.

We at MicroSourcing have a solution for this: Managed Operations.

MicroSourcing makes it possible for your organization to have its own operations in the Philippines by way of a unique alternative which delivers the ideal middle ground between outsourcing and starting your own company in the Philippines.

To illustrate:



With this setup, you have your own dedicated team that’s located remotely. You can even set their working hours to coincide with yours or 4-6 hours ahead. That way, your company is literally working while you sleep.

As a company, before you start back office outsourcing it is a must that you a have a solid plan about what your goals are. Is it scalable growth? Is it setting up a permanent team offshore? Whatever your goals are it is important to partner with the right team that will help you achieve your objectives.

Talk to our experts and openly discuss how MicroSourcing will provide top notch services for your back office processes.


Back Office Outsourcing

Back office outsourcing to improve operational efficiency

Of all the developments in the business segment, outsourcing is still one of the popular business tools maximized not only by large corporations but by small and startup businesses as well. Apart from providing business owners and decision-makers cost effective options, outsourcing helps companies improve operational efficiency by helping in-house employees focus on core functions. A good way to do this is through back office outsourcing.

In a nutshell, back office operations are the part of a business that deals with routine internal administrative roles like finance and accounting, data processing, data entry, HR and recruitment, and other tasks that do not require the employee to face clients. It’s also worth noting that with the fast-moving changes in the tech segment, back office operations have expanded to skill-specific processes such as web design, search engine optimization, and database management among others.

Back office work was not even considered part of a company’s revenue-generating function, with some thinking that back office processes play minor roles in the company, and often push back office work aside. It was only recently that stakeholders began to realize that there are areas in back office units that they can improve on and maximize.

For instance, a company is on track in hitting its growth targets, but this rapid growth could amass more work for the internal teams. This often leads to bottlenecks in key departments: the company’s billing and bookkeeping operations, inventory and procurement processes, and even production.

There are also instances wherein the in-house recruitment and HR teams can no longer take on additional work on top of finding additional people to fill internal roles and end up consuming valuable resources.

Another example is when a brick and mortar business wants to improve their webstore to cater to a much wider market. Now is the perfect time to do so because they are gaining traction in their segment. However, they can’t because the in-house dev team is focused on creating new webpages and fixing website errors, and nobody has the right skills to create new content. Small projects like this are then disregarded and put off, causing opportunities to fly out of the window.  

If you ever find yourself in similar situations, it’s probably time to consider back office outsourcing to address challenges like the ones mentioned above properly and swiftly by complementing the regular operations of the company. Doing so also enables your business to be scalable, and provides you with access to a large pool of back office experts.

So where do you start? First, you would need to analyze which part of the business you are going to outsource. Fix anything that needs fixing before you outsource by setting standards and making sure that everything is documented.  

Next, you need to find the right outsourcing company for you, one that is willing to add value to your company and not just earn from you. At MicroSourcing, we will make the right recommendations based on proper analysis of your businesses’ requirements. We offer transparent pricing that tells you upfront where your money will go.


Maximize Growth through Finance & Accounting Outsourcing

Accounting Tasks that can be OutsourcedNowadays, business owners are looking to find the best solution to streamline processes - from planning, marketing, sales, human resources, and even finance and accounting. They do this to come up with the best way to optimize day-to-day operations and continuously grow the company. One of the go-to solutions is outsourcing.

Some of you might be surprised to find finance and accounting mentioned above, but the reality is it has been one of the most outsourced processes among small, medium, and even large companies for many years now. Some organizations keep an internal team of accountants; some outsource accounting processes in bulk, while others use a hybrid operation of having an in-house team for major processes, and outsourced accountants for basic finance tasks.

Believe it or not, some businesses do not have a process for their accounting, and because of inconsistent execution, mistakes pile up leaving them with incorrect reports and information, and uncertainty over whether they are meeting the company’s financial goals. When the time comes for them to face their books and check on their financial condition, they will realize that putting accounting work aside was a horrible move and they will start regretting that they should have planned and prepared for an efficient solution to avoid all of that mess.

This is where outsourcing comes in handy. An outsourced finance and accounting team can work hand in hand with the internal team, or autonomously to address the accounting tasks that are usually brushed aside.

But which finance and accounting processes can be outsourced?

Accounts payable and receivable
You have to keep track of your payables so you will not encounter issues with your suppliers and circumvent bad debt costs, and accounts receivables so you can avoid bottlenecks in your company’s cash flow.   

Inventory and procurement
These two are part of finance and accounting as well, though some companies do not consider it as a core process. Keeping tabs on the company’s supplies and vendors is an important task of an organization, but it takes up a lot of time and resources that could otherwise be applied to crucial areas of the company.

Cost of goods sold
Having an organized cost of goods will give business owners a clear view of their profit margin. Some businesses do it in bulk and follow a strict schedule, but experts recommend that business owners keep accurate records and roll out updates regularly to see the trends and changes so the business can respond accordingly.

A reliable and competent finance and accounting partner can provide more than the processes listed above. They will help you create value for your money by improving your business’ productivity and transforming your finance and accounting processes.
 


Driving Profitability through Finance and Accounting OutsourcingFinance and accounting outsourcing is a great way for businesses of various types and scale to find flexible accounting solutions. It is a tried and tested business model that helps drive operational expenses down, and provides greater value across the board.

Benefits of finance and accounting outsourcing

Finance outsourcing presents two opportunities. First off, you have the short term goal, which aims to drive finance operation costs down, and the long-term goal, which aims to create value in finance and accounting departments.

Case in point: business executives of non-finance companies do not like to crunch or be involved with the company’s numbers such as the routine expenses which often include paying their suppliers, people, facilities, as well as collecting scheduled payments from clients, etcetera. The bosses only want to see the results.

Additionally, you will not find them exerting effort in creating value in their financial processes. They only want to see the “more for less” part of their outsourced finance and accounting services and hope their solution will stick in saving more money.

You are now probably asking, “How can executives produce additional value from their finance and accounting process?” The simplest answer is instead of treating finance and accounting as necessary evil, why not push for a well-orchestrated finance process that could result in a better finance operation?

Yes, it’s a painstaking process, but wouldn’t you rather have your decision makers focus more on the core processes and growth of the company, rather than trying their luck in fixing the bottlenecks in the accounting department?

So where do you start? Before you get too excited in finding the right finance outsourcing partner, take into consideration that not all providers are the same. Some excel in carrying out basic accounting tasks, while others have more experience in creating finance strategies. Moreover, more and more finance outsourcing providers are starting to move towards in-depth sector and domain knowledge approach.

Also, you have to look into what type of client-provider relationship you will be having because this will greatly affect the outcome of your partnership. Too stringent and it will be a day-in-day-out kind of operation where the client’s viewpoint and “rules” can affect limit the provider’s range,  or too lax and there’s a possibility that the company’s internal finance skills could decline.

All in all, you will not be able to see what opportunities you are missing from outsourcing finance processes until you have finance experts help you find the problem areas in your financial data and streamline your finance function. It’s simply making the best financial decision for your business. More importantly, bear in mind that you do not need to create new finance processes and start from scratch. You can adapt and create a better finance route by creating a shared services environment where your existing team can work with the outsourced finance team, or have the outsourcing service provider create a custom plan for you.


Outsource Finance and AccountingWe all know that accounting and bookkeeping are some of the processes that take require a lot of attention and time and each company has its own way of handling accounting tasks. Some do it the traditional way, which is hiring a full-time accountant, while others outsource it to accounting and bookkeeping services providers. Thanks to technology, it is now even possible and easy to work with someone offshore.

Now you are probably thinking “Why would someone want to outsource their accounting tasks?”

Reasons businesses turn to accounting outsourcing

Here are the common answers from various business owners and decision makers:  

It’s a reasonable means for small and startup businesses.
Having full-time accountants on board is always an option. However, small and startup businesses have to make every penny count. Also, the level of workload and output is probably still manageable, so it isn’t necessary to have someone on board full-time.    

They are expanding.
During the process of expansion, the amount of work increases for the internal team. The impact of the growth is more noticeable in the finance team because while developments are being executed, the finance team needs to manage the company’s current/existing finances while making sure that every dollar spent in helping the company grow is accounted for. An outsourced accounting expert could help cushion the additional workload.

Have better control and reduce fraud.
Small and startup businesses rarely have access to controller and CFOs who can look at all the finance activities of the company. These experts are also the ones who are trained to look for fraud signs and carry out fraud protection processes without compromising internal relationships because they are a third party contractor and are expected to be neutral.

So when is the best time for a business to start outsourcing?

Some business owners prefer to do it after filing taxes so that they can start fresh with their outsourced accounting expert. By the time the outsourced accountant steps in, the majority of the work are already ironed out, so the accounting expert will have more time in familiarizing himself with the company’s books and finances. Moreover, a clean slate will enable the client and outsourced accountant go through the critical events the company will face throughout the year – making it easier to close and evaluate the books when needed.

Outsourcing can be overwhelming at first, but as your organization grows, it is a great way to dedicate more time, talent and money to the core processes of the company instead of catching up with the routine grunt work and back office tasks.

Accounting outsourcing can help businesses in so many ways.  When choosing the right accounting outsourcing firm, don’t just go for the bigwigs in the industry, try to look for ones that will bring in additional value to your business and are willing to go the extra mile in helping the company grow.