The success of your business depends to a great extent on certain key financial decisions taken by you. Should certain functions be performed in-house or should they be outsourced? The right decision, often, is the difference between business success and failure.
One such major decision you are bound to be confronted with is the accounting function. There are some minor and major important things which plays a very important role in establishing a new or existing organization or you can say there are most important pillars which are very important to survive a company. Each and every company should have its own accounting department to manage all the financial decisions and forecast his overall business profit and loss. Most of the companies do not have their own accounting then they search to outsource the accounting firms which take some fee and take all the responsibility of all its company accounting. The accounting function plays a major role in the success of your business; hence outsourcing accounting services would also need to be carefully considered.
It all comes down to opportunity cost; if outsourcing a function means more time and resources available for business growth, then outsourcing accounting services would be a smart decision.
The question that arises now is how do I know if outsourcing will be profitable or not.
5 Factors That Will Impact Your Outsourcing Decision
These are some of the factors that will aid you in making an informed decision regarding outsourcing accounting services:
#Reduction in costs
One of the major reasons to consider outsourcing is whether there will be a significant saving in operational costs, which leads to higher profitability. If you find that the savings through outsourcing are not significant enough, then the idea should be shelved.
You also need to determine whether the expenditure on in-house staff and equipment are significant or not. It is also important to analyze the quality and variety of services provided by the outsourcing firm.
While shortlisting vendors, the fee should be one of the more important considerations. While outsourcing accounting services, you need to look at the range of services provided by the vendors. Free customer support is an important value addition, and if the vendor is providing this as part of the package, then it is worth considering such vendors.
You need to assess whether the vendor has the required infrastructure; primarily resources and technology, to address your outsourcing requirements adequately.
This would include the latest technology vis-a-vis accounting software as well as experienced and qualified staff, who are well versed with the latest regulations in accounting. The vendor should be competent enough to be able to handle any kind of emergency in terms of work volumes.
You should be able to get the right kind of support from the vendor when it comes to meeting deadlines. If any important accounting information is required at a certain point of time, it should be available instantly, cause otherwise, it would not make sense to outsource the accounting services. Don’t just look for quality; you need to pay attention to promptness also. These queries should be settled with the vendor before signing/hiring them. You need to also check with the vendor if they have any backup plans in case a deadline is missed. If they don’t, they should be avoided.
The reason an organization outsources accounting services is so they can channelize their resources towards more profitable avenues. Therefore, the vendor should be able to provide end-to-end solutions that meet your quality parameters. They should be able to operate independently with minimal supervision or else the whole purpose of outsourcing is defeated. When the vendor is functioning at an optimal level, they should allow you to focus on better client servicing and expand your business.
Achieve Higher Profitability with the Right Vendor
When you outsource accounting services, the vendor becomes an integral part of our business. As accounting plays a major role for all businesses with regards to business profitability and MIS for taking critical decisions, choosing the right vendor for this function becomes all the more important.
There is one important thing you should think about before hiring an accounting firm. First you should check the company background and its trustability across the world wide after that you have to confirm what is the company size or how many persons teamwork for your company you have to clarify that if your company hire that outsourcing company for your accounting project then they will work for your company in your time session. There are a lot of professional accounting firms to whom the accounting function can be outsourced, but you, as an organization, need to critically analyze which firm would be the right fit for your business.
You need to understand your outsourcing requirements first before engaging a vendor. This is vital as it will help you define the parameters for the selection of the vendor. Price is not the sole consideration work is more important but the price is also according to the work. If your work is not satisfied with your price then there must be a problem with the quality of the work here; a combination of the price and the services provided should be the deciding factor.
The experience of the vendor, then the vendor should be experienced in his work means the organization or firm which takes your company project should be not new in the existing field because of experienced firms and organization work better than the newly established organization. So always you should hire a reputable organization for better work experience as well as the technology used by them in accounting should also be considered.