The challenges of concentrated supply chains and centralized business functions have long revealed the vulnerabilities in many industries. Early indicators showed that a significant percentage of professionals were already experiencing major business disruptions, with others anticipating substantial issues on the horizon.
In response, businesses are continually seeking strategies to not only survive but thrive. One effective approach is outsourcing key business functions.
Here’s why outsourcing is more crucial than ever:
Outsourcing Benefits
Eliminates Bottlenecks
Businesses struggling to meet demands see hiring more employees as a solution, and while that may be the case, outsourcing can achieve similar success at a fraction of the cost. Outsourcing certain activities, such as customer service, accounting, shipping, IT, etc., can reduce the burden and eliminate the different bottlenecks businesses face.
For example, finance and accounting outsourcing companies are ideal for businesses that need accounting specialists in their back office. With a more robust accounting department, your company can deal with complex accounting issues like cash flow management and accounts receivable.
Additionally, help with marketing, IT, and customer service can free your company to prioritize aspects of the core business. Whether you need to plug a gap or scale up quickly, outsourced services can help you strengthen your business.
Ensures Speed and Flexibility
Marc Benioff, CEO of Salesforce, emphasizes that the new currency for successful firms is speed, making outsourcing more crucial than ever. However, speed without flexibility is ineffective. For example, even the best accounting software is useless if it can’t integrate with various CRMs or e-commerce platforms like Shopify.
Supply chains have been severely disrupted, and relying on a single supplier, especially from a hard-hit country, is risky. Exploring alternative supply options and outsourcing parts of your supply chain can help mitigate these risks.
To ensure an external partner is fast and flexible, take advantage of trial periods or start with a one-time project to assess their capabilities before making long-term commitments.
Outsourcing to specialists can enhance efficiency, keep you competitive, and ensure your offerings align with market trends.
Lowers Costs
No matter what, the ultimate goal of every business is to make money. Cost-saving is another reason why outsourcing is more important than ever. Had it been an added expense, businesses around the world wouldn’t have considered outsourcing at all.
Outsourcing non-core business activities helps you save operational, labor, and administrative costs associated with managing them in-house. This is particularly true when you can outsource to entities in developing countries. These countries host the world’s major outsourcing hubs with highly educated yet affordable employees compared to those in developed countries.
Allows Access to Most Advanced Technology and Specialized Resources
With remote work becoming the norm, businesses need advanced software to keep operations running smoothly. However, many are hesitant to invest in unfamiliar solutions with uncertain outcomes. Outsourcing provides access to cutting-edge technology without the need for hefty investments.
Outsourcing firms are equipped with niche technologies and tools and constantly update to the latest frameworks. Given that the current crisis is temporary, investing in specialized tech for in-house use may not be practical. By outsourcing, you can utilize the latest technology for your projects without the financial burden or responsibility of maintenance.
Additionally, outsourcing firms offer access to specialized talent, such as web developers and engineers, which might be unaffordable to hire directly, especially during challenging times. This allows you to leverage both human and technological resources while saving on recruitment, training, and office space costs.
Helps you Grow and Adds Value to Your Business
You may have decided to outsource to survive or address the troubles presented by the coronavirus pandemic, but the decision may actually help your business grow.
The advanced technology and specialized resources possessed by reliable outsourcing companies may make your processes more efficient. Maybe you were not able to grow because you could not focus on your core business tasks or other in-house activities, such as customer service, IT, or shipping, were not providing sufficient support.
In either case, outsourcing supporting operations should give your business a boost and help it grow way faster than before.
Given the high competition, many outsourcing companies now offer a range of extra services to stand out from others. These services improve efficiency and productivity while lowering the risk and costs within your firm, both during normal circumstances and in times of crisis.
Outsourcing Challenges
No doubt, services like outsourced financial services and outsourced accounting can better your company by unloading some of the burden. However, outsourcing also has its drawbacks.
When looking to outsource business functions, keep an eye on the following areas:
Work-From-Home
It’s important to understand that most outsourcing plans were originally formulated to support businesses and help them achieve their goals, not to ensure their very survival through a global pandemic that necessitated widespread WFH procedures.
The outsourcing industry has indeed done incredibly well considering the situation. For instance, India has been able to manage about 80% of its pre-pandemic productivity levels despite 9 out of 10 employees in the country working from home. However, they need to have disaster recovery plans that address emergencies in which the resources of the outsourcing service provider are working from home. Outsourcing companies will need to modify contract provisions to factor in cases like these.
On top of that, outsourcing companies specializing in IT have to have protections and pre-requisite controls in place like never before. They must consider how confidentiality, data security, privacy, audit rights, and intellectual property must be secured with remote work settings.
Changes in Price Models
You should also know that many outsourcing firms have revisited their price models and made modifications to reflect operational shifts. For instance, many service providers have now switched to the time-and-material pricing model, which involves billing customers for actual work scope based on hourly labor rates. This can be good and bad for your business, so conduct a proper cost-and-benefit analysis before signing contracts with outsourcing companies.
Why You Should Outsource Your Accounting
Outsourcing your accounting function can be a game-changer for your business, providing you with the financial strategy and expertise needed to stay competitive. By choosing a specialized provider like Fully Accountable, you gain access to top-tier accounting services and CFO services that are designed to optimize your financial operations.
One of the key benefits of outsourcing accounting and bookkeeping services is the ability to improve cash flow management. A skilled outsourced finance team can help you monitor key performance indicators, ensuring your business is on track to meet its financial goals. Additionally, their industry expertise allows for more accurate and timely financial statements, giving you a clear view of your business’s financial health.
Fully Accountable stands out as a top choice for outsourced finance and accounting. They offer comprehensive CFO services tailored to your business needs, helping you develop a robust financial strategy that aligns with your long-term objectives. Whether you need assistance with financial statements, improving cash flow, or setting up effective accounting systems, Fully Accountable’s team of experts provides the support you need to enhance your accounting function and drive business success.
Outsourcing your accounting not only saves time and resources but also ensures that you have a dedicated team focused on your business’s financial intricacies, allowing you to focus on growth and innovation.
The Strategic Advantage of Outsourcing
In today’s fast-paced and ever-evolving business environment, the benefits of outsourcing cannot be overstated. By eliminating bottlenecks, ensuring speed and flexibility, lowering costs, and providing access to advanced technology and specialized resources, outsourcing helps businesses not just survive but thrive. It allows companies to focus on their core operations while leveraging the expertise of specialized partners to handle critical functions.
Whether it’s accounting, IT, customer service, or supply chain management, outsourcing offers a strategic advantage that can drive growth and add value to your business. Companies like Fully Accountable exemplify how outsourcing can enhance financial strategy, optimize cash flow, and deliver industry-leading expertise in accounting and CFO services. Schedule a call or contact us today to learn more about our outsourced accounting services.
