If you are considering outsourcing your accounts, forewarned is forearmed. Above all, avoid rushing into it without careful examination of the pitfalls and how these will impact you and your business.
When looking at your outsource options you are always comparing what you currently have “in-house” versus what your ideal scenario where things are just done and done completely and accurately. Will this save your money or cost you more money in the long run? There are many questions to ask and being fully informed will be your best way forward.
For the purpose of answering the many questions that business owners raise, we look at the various risks around outsourcing your accounts and what is the solution to avoid these pitfalls.
Solution – Before selecting an outsource partner, talk to other clients that are already using their service.
Solution – Agree the format of communication before hand and preferably have a dedicated contact that you can call if you have a particular question that needs to be answered urgently.
Solution – Pick a provider who specialises in your area. They are less likely to get distracted by other things and should have developed good processes to deal with this issue.
Solution – Very important that you agree deliverables and timeframes prior to starting any engagement.
Solution – Do a background check on your potential outsource provider. Look for answers to see how long have they been in the outsourcing space?
Solution – Engagement with your team on the reasons for outsourcing and focus on the benefits for them, such as, freeing up time and resources to focus on core business activities etc.
Solution – Check the data protection measures, privacy, security protocols and intellectual property systems and processes that the outsource provider has in place to deal with these.
Solution – Get clarity from the offset on this. Reading the agreement carefully is paramount before signing it, in order to give you full confidence in your new provider moving forward.
Solution – You already know this one: “If it seems too good to be true then in probably is”. Understanding that your outsource provider needs to make a profit to stay in business. On balance, the cost savings should be delivered through better efficiencies through technology and expertise in the specific area you are considering outsourcing.
Solution – Look for an experienced provider who can identify and bottlenecks and possible risks and mitigate against them. At the very least, you should feel very comfortable with your new partner and they should be matching your expectations and understand your requirements.
Solution – Having a clear engagement and SLA should set out clearly what will be completed and the timeframes of when this will take place
Remember – whether you decide to outsource or not. Think about the outsourcing of tasks that have worked out well. Many companies outsource without realising that they are doing it already. This could be in the form of IT, HR, Security, Marketing, Payroll, telephone answering etc. Forewarned is forearmed. Outsourcing when it works well, it is brilliant, but when it is rushed or done badly can leave you feeling angry and burnt.
In conclusion, given these points there is lots of scope for a successful transition from in-house to your outsource provider. Most importantly, remember that this is a long term relationship that you are entering into that will benefit both parties.
Good luck with your selection
Brenda Smith ACCA
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