Outsourcing is when you give a portion of your like a part of your manufacturing or your marketing work to another company to do it for you. Similarly when you go for accounting firms Outsourcing you are either giving a portion of your accounting function or outsourcing the whole accounting department to them.
Benefits of outsourcing can vary from company to company and depend on one’s own self. Some seek it for cost saving whereas others might outsource their work for getting better results. Outsourcing accounting function is usually done to get both better results as well as saving cost at the same time. Accounts Outsourcing Firms Work in areas where there are lower living cost. This makes it easy for them to hire professionals at lower cost as compared to the countries outsourcing the work to them. Not only this, these firms get the benefit of economies of scale. They are catering a large amount of clientele which gives them advantage of dividing their cost easily over each of them.
These accounts outsourcing firms work with online software mostly. This makes it easy for their clients to review their work at the same time as it is being done. Online software are a great help in outsourcing business.
Management can check the work as soon as it is done and make the required reports. Accounts outsourcing firms work on hourly as well as contractual basis. You can choose whichever way of billing you want to choose. A new type of outsourcing is where an outsourcing firm provides you with a full time employee. This is a virtual employee that works under your company’s supervision and is available to you 9 to 6 or as contracted by the outsourcing company.
When you outsource your accounting work, you are not only outsourcing accounting function but also problems related to it. These problems being the hiring and firing of people working in it. Starting from hiring to training and further retaining the employee is all on the head of outsourcing service provider. It is their responsibility to train the employee according to their client’s requirement. Similarly you don’t have to worry about the fixed cost related to maintaining an in-house accounts department.
Accounts payable outsourcing is the perfect example of how accounting firms outsourcing work. When you outsource accounts payable to an outsourcing company it is their responsibility to take care of all the aspects of accounts payable function. They check which creditor is pending for a long time and needs to be paid urgently. The outsourcing company keeps a close eye on each creditor so that their client don’t lose business because of paying late. All the legal actions and response of emails are the headache of the outsourcing service provider. The outsourcing company also bargain with your suppliers to get the maximum credit period. Thus when so much is being done by the outsourcing company the owner of the business has all his energy to focus on expanding his business.