Research says accountancy firms typically spend 70% of their time administering low-yield, data-intensive compliance functions. A good outsourcing company helps you reduce the time spent on these activities while still giving control. Other than the obvious benefits of cost-savings, outsourcing your accounting functions reduces overheads that come in the form of:
In addition to the above, the following benefits explain why firms should stop processing their data-intensive compliance function in-house:
Lower operational cost This is commonly cited as the primary driver. Under an ad-hoc business model, businesses pay for the resources as and when they need them. Even if they sign up for a dedicated resource, substantial reduction in costs is quickly visible. It is not uncommon for businesses to reduce their in-house accounting costs by close to 50%.
Increase operations efficiency This is, after cost reduction, the second most cited benefit. Small and medium sized firms lack access to best practices such as technology and infrastructure to perform efficient accounting functions. However, when they outsource such a task to an outsourcing specialist, they can easily achieve equal if not better efficiency and productivity levels as their big competitors. An outsourcing company can create this leveled playing field only because they are specialists who operate from a location where the overheads are lower than the client country.
Improve margins For accountancy firms, running data-intensive compliance functions is generally considered a low-margin activity. Outsourcing not only reduces costs but ups the margin. It is especially beneficial if you have huge volumes of compliance work.
Save time Outsourcing allows you to spend billable time on delivering higher billing work, building and maintaining client relationships and growing the firm. It also frees up managers and partners from time-intensive recruitment, training and compliance duties, leaving time for truly strategic initiatives like budgeting and forecasting. Our clients have gained 1000s of hours which were otherwise lost in data-intensive functions each year.
Get a competitive advantage Gives you an edge over your competitors as you can now expand your firm by offering higher valued services to their clients. An in-house survey of QX’s current clients found that outsourcing had allowed them to take on more profitable work.
Faster turnaround time American companies outsourcing to India gain from the time difference. With India 10 hours ahead of the East Coast of North America, work sent overnight can be returned the next morning. There’s great value in that service for tax, bookkeeping and financial services accounting and means you can shorten your response times.
Acquire flexible resources One of the most unique benefits that lets you run a lean operation. Outsourcing nowadays offers the option of scalability with an array of engagement models like shared, ad-hoc and dedicated. Depending on work volumes, you can choose the one that fits your needs. During peak seasons when you are inundated with work you can easily scale up the outsource team, and when work is slow you can trim it down. Moreover, you don’t have to worry about back-ups to cover holidays, sickness, maternity, together with the time and cost it involves.
Tap the best minds in the world Outsourcing opens access to an articulate, educated, English-speaking workforce that grows with your company without the HR headache. It also allows you to enjoy a larger workforce and increase your firm’s efficiency without increasing headcount.
Escape the maze of legislation Outsourcing companies take care of staying a step ahead of the ever-changing raft of legislation. They take over the complex legislation and work in partnership with IRS and US GAAP so you can concentrate on delivering the primary services of your firm.
Share risk Another less-spoken about benefit which directly affects the growth of your firm. When used as a business strategy, outsourcing allows you to significantly reduce your exposure to risk. To add to that, it reduces the risk of having in-house employees responsible for F&A who may not be available at a critical time due to sickness or holidays.
Access to a specialist team and industry best practices at a low cost This is especially beneficial for small and medium accountancy firms that are looking for ‘specialist’ employees. Outsourcing opens access to a team of professionals who are specialists at running your data-intensive compliance functions. Particularly in areas of technology, outsourcing provides an instant access to industry best practices that might be too cost-intensive to buy or hire.
Level the playing field It’s a given that small or medium sized firms can’t match the in-house quality of non-core tasks that big firms can maintain. This changes totally when SMEs get access to a specialist team and technology that in the past was only available to big firms. This further allows you to compete with bigger firms for bigger jobs and generate larger profits by outsourcing portions of the workload