Is Your Company Ready for Business Process Outsourcing?
The main goal for any business is to build enterprise value by growing current and future profits. But finding the right tools to meet this objective remains a challenge for many accounting firms. According to a study titled, ‘CPA of the future’, 90 per cent of CPAs say that delivering efficient processes to clients will become a key differentiator among accounting firms in the next five years. One of the biggest strategies that have emerged to help accounting firms achieve exactly this is to outsource certain business functions. Outsourcing frees up critical time for firms, allowing their in-house teams to focus on higher value activities and generate revenue.
But is outsourcing the best choice for your company? The answer to this largely depends upon what stage of growth your company is currently in.
Stage 1: Young Firms Without Standardised Procedures
Newer firms in the early stages of growth often don’t have a systematic, standardised process. These firms are usually faced with a time-crunch and are on the lookout for quick solutions that can effectively deal with their existing challenges. For newer firms, offshoring isn’t always the best option as they might lack the infrastructure required for the process to run smoothly. Instead of offshoring their operations, these firms can consider engaging with a process reengineering consultant. By working with one, young firms can map their processes from beginning to end, identify redundancies, eliminate processes that are no longer required and pinpoint the many variants the firm might have in their existing structure. Once the firm implements these suggestions and finds a process that works best for them, they can consider offshoring at a later stage.
Stage 2: Growing and Wants to Free Up Time
Firms that are a few years old usually already have a standardised process in place. For these companies, their biggest challenge is to separate high-volume low-value tasks from consulting time. Client relationships are the ultimate driver of an accounting firms’ revenues. Increasing face-time with clients is crucial for these firms as there is a strong direct correlation between client face-time and higher revenues. However, when in-house teams are burdened with time-consuming routine tasks, they are unable to allocate adequate slots for face time with their clients. For these companies, offshoring is an ideal tool to maximise efficiency as well as drive down operational costs. With the introduction of GDPR guidelines, however, firms need to ensure they do a full background check before outsourcing to a third-party to ensure compliance.
Stage 3: Looking to Upgrade Processes
If firms have been using a certain process or technology for a while, they might be looking for an upgrade to improve their operations. One of the most important technologies that is changing the way accounting firms operate is the emergence of cloud technology. Migrating to the cloud is an excellent option for firms that are in a phase of transition, looking to woo new clients or want to access new markets without having to make additional investments. The advantage of moving to a cloud-based platform is that it is also cost-efficient. Most cloud service providers offer modular solutions where firms only have to pay for what they use. They also don’t require capital expenditures on servers and storage. When firms transfer their operations to a cloud server, it can make them better equipped to offshore certain business functions as well. It allows them to track activities in real time, transfer files seamlessly and gain full visibility of every process that has been offshored. It can also be an important way to improve cybersecurity for accountants.
Stage 4: Large and Doing Repetitive Work
For big companies who are simultaneously handing a number of different functions under a single roof, streamlining their multiple operations can be a challenge. When firms grow to this size, offshoring certain processes becomes crucial to maintaining productivity and efficiency. It allows the firm’s employees to focus on what they do best instead of getting bogged down by mountains of routine tasks.
Some firms at this level are already offshoring certain functions, but might not be offshoring processes from end-to-end. They might be engaging with multiple outsourcing partners, each of which are handling different steps of the entire accounting process. When large firms do this, offshoring might not actually help them bring down costs or optimise time. End-to-end accounting outsourcing allows large firms to minimise the risk of errors that invariably arise when only certain functions are outsourced if there are a number of outsourcing partners. This ultimately helps them increase process efficiency and bring down operational costs.
The world of accounting is constantly changing, with new technologies and processes being introduced. For an accounting firm to build enterprise value, the key is to not hop onto the latest trend but to determine what tools are actually best for them.
To learn more about Sundaram Business Services and how we can support your organisation, visit sundarambizserv.com