Outsourcing Finance & Accounting (F&A) role has been a popular trend today. The main benefits of accounting outsourcing include cost reduction, efficient processes, and accurate reporting. Aside from this, it has also helped the business owners to focus on core competencies.
Outsourcing the Finance and accounting function decision will have a long-lasting impact both on the human resources department and also the entire organization. Hence it is important to take time to decide whether the accounting function of your company should be outsourced or not. The right team, technology and practices should be in place to get the most value out of outsourcing.
Factors that Influence Outsourcing Accounting Success
When signing a contract with an outsourcing service provider, it is essential to check that the price paid for the services is right. The price should not be very high because then the cost savings, process improvement and return on investment do not justify the price. The price should also not be very low because the service provider will not give the best when the pay is low. Optimal pricing is necessary.
Near-shore or local outsourcing option looks better with mitigating threat, but might miss the cost advantage; whereas companies in India provide direct cost reductions of up to 50%. And also the favorable time difference enables round the clock operation.
Technology and Experience
The analysis of technology used and human resource is important. It is very vital to check if the software is up-to-date and the employees are well trained and able to execute the given work efficiently. It is also best to check if the service provider has a prior experience in this field and do a reference check.
Quality and Security
Quality of work is similarly as significant as cost savings. Low quality of work or delay in submission will have a negatively offset. Same way security is another critical factor for the success of outsourcing. Inquiries should be made about the disaster recovery process and data security measures.
Communicate clear objectives
While communicating with the outsourcing partner, it is essential to keep communication open, particularly when it relates to your goals and expectations. It is very important to pass the feedback, focus on positive aspect, but speak about the negatives and move towards the goal.
For the success of outsourcing it is imperative to choose the service provider very carefully. The whole responsibility lies in the hand of both the partners to reap the maximum benefits of the venture.