Outsourcing a company’s accounting and bookkeeping processes is not a new phenomenon. As far back as 2013, Forbes was reporting that the practice was booming as CFOs searched for ways to better drive efficiencies. In the wake of the global financial crisis, the benefits of assigning accounting, bookkeeping and/or compliance work to professionals in another country were obvious to many.
Well, it is now 2021 and the world is facing another crisis. The COVID-19 global pandemic has a new generation of CFOs searching for smarter ways to do business and outsourcing remains a top priority as evidenced by FinancesOnline ranking it third on its list of ‘11 Accounting Trends for 2021/2022.’
In the words of the independent software review platform: “Outsourced accounting service providers is one of the fastest growing areas in the accounting industry. Every year, businesses experience satisfaction in their outsourced accounting value and results. Outsourcing is now an increasingly important method for CPA firms to deliver efficient services to their clients, as well as to analyze business operations and add more value to their business.”
By definition, outsourcing is the practice of hiring a party outside of a company to perform services that were traditionally completed in-house by one’s own employees. Transferring some of a business’s operations to a top outsourcing destination like the Philippines means they can enjoy larger and more diverse workforces at cost-effective price structures.
What’s more, new and enhanced technology is making outsourcing more accessible and effective than ever. From cloud computing and digital data to video conferencing platforms, the internet age has handed companies the tools they need to have confidence that partnering with remote workers is not only viable but beneficial. Technology is the backbone of any outsourcing operation and it’s fair to say that it has never been stronger.
The reasons companies choose to outsource bookkeeping and accounting services are many and varied. That said, they have one thing in common – they all want a better way of doing business. Outsourcing provides them with that opportunity and, as is often the case, can deliver benefits they did not initially consider.
Where outsourcing was once about call centers, data entry jobs and basic admin support, the game has well and truly changed. Markets such as the Philippines are filled with potential staff who not only boast the highest of qualifications but the work ethic needed to succeed in a competitive business world. The fact average wages for offshore staff is on the rise highlights the increasing complexity of roles on offer including:
There are clearly huge benefits to outsourcing accounting and bookkeeping services but making the leap can still be daunting. There’s no simple answer to whether it is the right move for a particular business and that’s why it is important to dedicate significant time and research before making a decision.
While cost shouldn’t be the sole determining factor, there is no doubt the numbers must stack up and an initial cost-savings analysis would be highly recommended. If it does appear to be a clear cost-cutter, it’s then a case of considering the types of tasks that would deliver the most benefit if they were managed by an outsourcing partner.
Outsourced accounting and bookkeeping are often most useful in transactional areas that involve repetitive tasks such as payroll, accounts payable and accounts receivable, thus allowing onshore staff to focus on more complex jobs. Companies interested in outsourcing must also be open to embracing the digitization of their financial and accounting processes, given the vital role technology plays in bridging the divide between geographical borders and time zones.
For more insights into whether outsourcing should be the next step in the evolution of your accounting and bookkeeping needs, download the free eBook Everything you need to know about offshoring Part 1.
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