In my career as a CPA, I have been asked about my thoughts on outsourcing, especially since I had worked at one of the best off-shore outsourcing companies in the world (in my humblest of opinions). I believe in the benefits of outsourcing and have seen the positive results of using an off-shore team with increased capacity and revenue. Here are my thoughts.
First, though let’s talk about 3 reasons NOT to outsource.
1. You do NOT want to eliminate paper.
There are many organizations and firms that just love paperwork. Maybe it is because they are used to the traditionally manual process of maintaining records. With paper records it is impossible to work with a remote staff, whether it be off-shore or across town. Many business owners are not willing to change or go by the mantra ‘that is how we always do it’. If you are a tax practice that still has clients come by and drop off their paper documents, then outsourcing is NOT for you.
2. You are technology averse.
Let’s face it, if the above is true, then this is also most likely the case. In order to utilize a remote off-shore staff there needs to be a tech stack in place. At the very minimum you would need some type of communication tool to collaborate on work. If looking to outsource accounting or bookkeeping functions, you would need software like QBO or a hosted version of software so someone who is not located within your 4 walls could access the data and not need to pass back and forth back up files needing to be restored.
3. You do NOT have documented standardized processes and procedures.
The first two items may be just too obvious to most but the lack of standardized processes and procedures would be the biggest reason why NOT to outsource for me. This is probably because of the fact that I have a hard time imagining that the first two cases still exist in today’s world, but the reality is they do.
In my years of working with the off-shore company. I found that many accounting firms knew what they do to get work done, but very few had actually documented their processes. Undocumented processes means that while the end-product may be the same, the steps to get to that end-product could vary wildly. This leads to inefficiencies, confusion and inconsistencies by the staff that is working directly with you. Work would become a free for all, which would translate to remote or outsourced workers who would prepare work in a manner they saw fit which may not fit what you need.
Here are the biggest reasons to outsource.
1. Reduced Costs
This is the most straight forward and may be the most attractive reason why businesses will outsource bookkeeping or accounting functions. When outsourcing work, you typically find favorable rates while avoiding the additional costs of recruitment and onboarding, equipment, benefits, ongoing training and other human resources costs.
2. Strong Talent Pool
Finding strong talent can be problematic. When you get ready to hire, you may get lots of applications or resumes, but the vast majority of them end up in the trash can because there only connection to bookkeeping is that they look at their own bank balances. You may find applicants that do do have experience in accounting, but worry (rightfully so) about their spotty work history. The truth is, there is a shortage of qualified talent.
By outsourcing with reputable vendor, you are able to take advantage of their recruitment and training programs. You may be surprised to find that outsource workers, particular overseas workers, are trained prior to starting on your work, are trained on your specific technologies, and receive ongoing training including certifications. These are talented and skilled people who do a great job and do not come with all of the extra costs of an employee.
One final note is that some vendors maintain workers whose jobs are to back-up others workers. This means no sick days, no down time while an employee is on vacation and no stoppage of work getting done.
3. Increased Capacity
Increased capacity from outsourcing comes in two places. First, by strategically picking which tasks are outsourced, you can free up your existing team to perform other tasks and services as well as manage oversight of the outsourced team. Second, outsourcing means you find more time for yourself to do other work.
Increasing your capacity can be realized in a variety of ways that could increase revenue or create a better work-life harmonization. By having many of the routine tasks completed by an off-shore team, you will be able to:
What is my opinion?
I may be biased, but I believe that accounting and bookkeeping practices should at least consider outsourcing. Want to chat about it? Please send me an email!