As organisations face increasing financial pressure many are reviewing their internal capabilities, as they search for new ways to remain competitive.
Outsourcing of accounting continues to move into the mainstream, as an increasing number of firms are starting to consider outsourcing. Many businesses are finding that outsourcing accounting allows the management team to focus their efforts on the aspects of the business which deliver the most significant business growth.
In this article, we take a look at some of the reasons why businesses are choosing to outsource their accounts department. We also consider some of the concerns which organisations share and how these can be overcome.
The growth of outsourced accounting
In recent years there has been a rapid growth in client accounting services. This can be largely attributed to the cost savings which can be found, as there is less demand on building and maintaining a large in-house accounts department.
However, the value of outsourcing goes beyond simply lowering costs. Outsourcing can improve the focus on the core aspects of the business, reduce risks associated with employees and also provide access to the latest technology and valuable expertise.
The benefits of outsourcing accounting
1) A focus on business growth
In every business, there is pressure to maintain a competitive advantage and sustain business growth. In many cases accounting is not considered to be a core competency of the business, which means managing the burden of accounting often becomes a difficult task. By outsourcing accounting, the management team are able to refocus their time to drive the business forward and achieve the expected growth.
2) Management of human resource issues
As a business grows there is significant pressure placed on the accounts department in terms of recruiting, training and managing additional staff. By using the services of an external team, a business will benefit from the skills and resources of an entire accounting department, at a percentage of the cost of hiring additional team members.
The external accounting experts will understand the advancing technologies which could be beneficial to your business. By devoting their attention to researching the latest upgrades your business will always have the technology required to maintain efficiency.
3) Scalable solutions and peace of mind
By investing in the services of an outsourced accounting department your business will have access to scalable solutions, which will meet the changing demands of your business. By hiring an external team your business will have confidence in the quality and accuracy of the important financial data. This peace of mind will allow the business to focus on the key important management tasks, with the necessary accurate data required to make business decisions.
Overcoming concerns relating to outsourcing
1) The security of data
In many firms, although there is an awareness of the benefits which outsourcing accounting could provide, there are some objections. The main objections which are raised in relation to outsourcing are usually relating to the security of data, particularly client data. However, data always creates a security challenge wherever it is located, and a reputable outsourcing firm will have robust procedures, policies and technology in place to provide the appropriate level of protection.
2) An effective workflow
An issue which can create an initial challenge when outsourcing is managing the workflow and the sharing of data. This is particularly apparent in large organisations where people are required to work in a range of time zones. However, by creating a strong internal system for the sharing of data the workflow can be managed effectively. The most successful outsourcing partnerships involve the appointment of an internal champion, who is able to manage the relationship with the outsourcing partner.
3) Maintaining a highly skilled workforce
There are organisations which are concerned about the impact of outsourcing on the internal skillset of the team. However, the most progressive firms view these changes as an opportunity to redefine the capabilities of the team. By creating a stronger focus on the evolution of accountancy technology, workflows and efficiency levels will improve.
Here at Virgate Accounts, we specialise in providing outsourced financial services to large retail and hospitality businesses. If you would like to find out more about how we can help you, please contact our team today.