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business outsourcing - Complete Controller

Outsourcing is a business trend that has caught on quite feverishly in the past decade. Businesses realize that it is often a good idea to outsource mundane and low priority tasks to off-shore companies. Outsourcing such activities have reduced costs, expanded capacity, and increased growth in many businesses. This article talks about the functions of outsourcing and how it can help companies to develop and meet their desired objective and goals. Check out America's Best Bookkeepers

What is Outsourcing?

Outsourcing refers to how companies entrust specific business functions to outside vendors. These business functions usually are non-revenue generating and can include tasks like transaction processing, payroll, customer service, and inventory management, to name but a few. Any business process that can be done from an off-shore location can, in theory, be outsourced. Outsourcing is advantageous for businesses as it allows them to focus on job functions that are revenue-generating rather than ones that are not, which can lead to increased productivity and profitability.

Outsourcing activities can have certain advantages for businesses in terms of: Check out America's Best Bookkeepers

Cost Savings

Outsourcing business processes such as customer support, accounting, administration along with HR related activities can lead to substantial cost savings. This is primarily because off-shore companies in countries like India and the Philippines have much lower wage rates than that of the western world. Specializing in outsourced business processes are not only these off-shore companies cost-effective but also maintain the level of quality standards one would expect to see from an in-house team. As communication channels improve with advancements in technology, this trend is likely to grow as more and more companies look to outsource non-revenue generating departments overseas.  Check out America's Best Bookkeepers

Increased Productivity & Efficiency

In most cases, outsourcing specific departments of your organization can help increase efficiency. This is because it is likely that the outsourced off-shore company specializes in that particular department and may have better expertise leading to increased productivity. Since time-consuming and mundane business processes get outsourced, this leaves more time to focus on core processes that will help grow and expand the business.

Reduced Investment on Infrastructure and Technology

By outsourcing departments such as accounting, HR, and customer support, a company can benefit from substantial infrastructure savings. Each of these departments would otherwise require the hiring of staff, office equipment, computer systems, and rental fees for office space. However, outsourcing the department means that the company no longer has to invest time and money into infrastructure development. Instead, they can use that investment money on marketing and R&D, which is more in line with core business processes that lead to providing higher value-added services.

Increased Flexibility

Things can often change rapidly in business environments. The introduction of new automated technology can make specific jobs redundant, and sometimes even entire departments within the organization may no longer be necessary. Outsourcing, to a certain degree, can protect organizations from such drastic changes by offering services such as virtual assistants and virtual customer support teams. These services can be made available in hours with the same level of professionalism and experience that you would expect from an employee hired in-house. Furthermore, such services can survive and adapt through the peaks and troughs of your business without the business itself having to incur substantial capital losses. 

Conclusion

The trend towards outsourcing non-revenue based business processes has grown exponentially in the past decade due to the multiple advantages that it provides, as mentioned above. Especially in the Western world, where comparatively wages are much higher, costs must be reduced to remain effective and competitive. The easiest solution to this problem has been outsourcing, and it seems that this business ideology is here to stay!

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
outsource or in house - Complete Controller

Outsourcing is a growing business trend that has proven to be quite effective for businesses looking to reduce costs and increase productivity. Outsourcing mundane and low priority tasks to off-shore companies often cut costs, expands capacity, and increases growth in many businesses. This article talks about the advantages and disadvantages of outsourcing. More importantly, it discusses instances where outsourcing may be beneficial for a business and cases in which it could do more harm than good. When a company chooses to outsource, there is no longer a need to invest time and money into infrastructure development. Instead, they can use that investment money on marketing and R&D, which is more in line with core business processes that lead to providing higher value-added services. Check out America's Best Bookkeepers

Advantages of Outsourcing

There are several advantages to outsourcing non-core business activities as discussed below:

  1. Cost Savings:

Outsourcing business processes such as customer support, accounting, administration along with HR related activities can lead to substantial cost savings. This is mainly because off-shore companies in countries like India and the Philippines have much lower wage rates than those of the western world. These countries also have fewer restrictions on taxes and are generally cheaper to operate, which translates to cost savings for international organizations.

  1. Increased Efficiency & Expertise

Specific tasks are outsourced to companies that specialize in that respected field. For example, HR tasks for recruitment, payroll, and scheduling can all be done overseas as long as the organization specializes in HR procedures and is aware of all the business’s policies. This can lead to increased efficiency as each task is outsourced to companies that specialize exclusively in that respected field or department. Check out America's Best Bookkeepers

  1. Focus on Core Business Processes

Outsourcing non-revenue generating tasks such as administration and customer support free up time to focus on revenue-generating business processes that can increase profitability and boost sales.

  1. Reduced Operational, Infrastructural and Recruitment Costs

Outsourcing departments frees up space and saves on hiring staff, purchasing office equipment, computer systems, and rental fees. Apart from this, day-to-day operational costs are also reduced as the company no longer has to invest time and money into infrastructure development, employee training, or recruitment. These responsibilities are now transferred over to the outsourced vendor responsible for hiring, training, and management. 

  1. Risk-Sharing

When an organization outsources specific components of business processes, they also shift responsibility associated with those processes over to the outsourced vendor. They are now responsible for all the risks related to that process, and since they are the specialists, they can better mitigate those risks.

 

Disadvantages of Outsourcing

Although there are many advantages to outsourcing, there are also several disadvantages that a company must consider when deciding whether to outsource a business process or not? Here are some disadvantages of outsourcing that any business should be aware of:

  1. Risk of Exposing Confidential Corporate Information

The risk of losing sensitive data and the loss of confidentiality is perhaps the most significant disadvantage of outsourcing business processes. When outsourcing departments like HR or customer support, the third party has to be often disclosed to confidential data that can easily be stolen or sent to the wrong hands. Corporations take intellectual property quite seriously, so having foolproof measures and checks regarding data loss and confidentiality contracts is a must when negotiating outsourced deals. Check out America's Best Bookkeepers

  1. Service Delivery

Once a business process is outsourced, feedback and reporting occur on a weekly and sometimes daily basis. This may not be enough, especially if the delivery falls behind schedule or quality is below expectations. Measures cannot be implemented as quickly as it would be if the department were operating in-house.

  1. Instability of Outsource Companies

If an outsourcing company goes bust, so does the entire business department for your organization, leading to devastating outcomes.

  1. Lack of Customer Focus

Outsourced companies often work with a wide variety of clients and cater to the expertise needs of multiple organizations at a time. This can often result in underwhelming results on organization tasks as outsourced vendors may quickly lose track and focus.

 

Conclusion

Although cost-effective, off-shore outsourcing brings about its own set of challenges that have to be carefully analyzed by any business looking to outsource its nonessential business processes. These challenges may present themselves in the form of hidden costs, language and cultural issues, poor quality, and reduced customer focus. Choosing whether to outsource or remain in-house is a key decision that can often make or break an organization.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Outsource - Complete Controller

Leading large-scale manufacturing and service-oriented corporations have been stressing scaling down costs and outsourcing low revenue business-generating units to offshore countries. This is the latest strategy adopted as part of the global competition, curbing cost and outsourcing little revenue business units, such as customer service centers, software, and design development, and assembling of electronics and consumer appliances. World-renowned corporations have adopted outsourcing approaches, such as stitching, labeling, packing, and finishing. Such businesses include Zaraman, Inditex, Ralph Lauren, and other leading stitched apparel. Check out America's Best Bookkeepers

Now the question, which comes to mind is how outsourcing jobs or outsourcing business processing operational units can generate revenue in offshore countries as opposed to being an internal division of the organization. The answer is simple, ever since the Activity Based Costing (ABC) has been introduced; many large-scale and world-renowned corporations started to demarcate Cost Business Units and Revenue Business Unit. These units are like financial division, production division, customer relationship department, human resource department, customer service department, printing department, in-house software development, and advertising department. For example, Apple has outsourced the assembly, packing, and printing of its consumer items like iPhone, Ipad, and iMac to China. If someone from the Middle East, Far East Asia, South East Asia, and Oceania wants to purchase any of the Apple Products online, when the package arrives, the backside of the product will clearly state, “Made and Assembled in China.” This is because the cost of production and labor is substantially lower in China. In the end, when cost and revenue are collated, and the bottom line is derived. This primarily affects the EPS (Earning per Share) and the value of share price on the stock exchange. This is imperative, as these corporations are public-quoted and listed on the stock exchange. If there is any financial misrepresentation or negative trend in the income statement, it is bound to impact the share price, investor’s confidence, and overall share value of the company. Check out America's Best Bookkeepers

Therefore, if the business corporation outsources those units of the operations that are not generating substantial revenue, it can be a very profitable proposition. The monetary advantages can be brought to fruition in the least amount of time and provide you the leverage to concentrate more on producing sales and effective customer service, thus being evaluated efficiently.

The scope of outsourcing is broad. Entities are providing both inbound and outbound customer services through IP telephones, accounting and bookkeeping services, CAD drafting services, photography, advertisements, marketing services, and other areas to bear in mind when considering how one can amplify revenue stream. Check out America's Best Bookkeepers

At this juncture, it would not be an incorrect statement to say that, nowadays, those units are usually being outsourced, which are generally labeled as after-sales service. In real-life scenarios, we come across situations where a lot of managers and executives spend a substantial amount of precious time dealing with after-sales service. This is frustrating for any management executive. When the person is finally able to make a sale or close a deal with the anticipation that the performance appraisal will bear fruits, the same person finds a glut of messages and issues related to after-sales. Therefore, the business unit of customer service is of paramount importance. Since they consume a lot of time, consequently, such groups are outsourced to professional call centers and customer service organizations to retain the customers. On the other hand, the in-house or internal management executives can focus on bringing in more revenue by acquiring new customers.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Finance and Accounting Processes - Complete Controller

By outsourcing the finance and accounting processes, organizations can have several benefits. These benefits help them to gain revenue and profits. Benefits that can be achieved by outsourcing the finance and accounting processes include: Check out America's Best Bookkeepers

1.   Strategic Redeployment of Staff:

The accounting staff of many countries has to work with workforce limitations, which eventually becomes a problem. Companies should realize that few people cannot cater to the immense quantity of data that accounting of the company requires. An outsourcing company, expert in finance and accounting, may have an excellent team for different accounting processes. These organizations will assign qualified specialists to work on the data, which can eventually be a win-win condition for everyone. However, in several cases, the client-company accountants may proceed to a guiding role that can merely entail dealing with the service-provider company and make sure that either the tasks are accomplished or not. In addition to this, outsourcing finance and accounting lets the companies provide relief for their staff from daily operations associated with the accounting processes and reassign them for work that can bring more business and add value for the customers.

 

2.   Monitors Accounting Rules and Implementation:

It is difficult for companies to pursue continuous changes in accounting rules. But some of the organizations devote themselves to financial process outsourcing. These companies keep track of all changes and also implement them when they are required. They make sure that the service provider company is always in the good books of governors associated with the financial market. However, an outsourcing company must follow the guidelines and standards of accounting, including GAAP and IFRS. Check out America's Best Bookkeepers

3.   Best Accounting Heads on the Job:

Sometimes, the position of a specific company may not allow them to get access to experienced accountants. In this regard, outsourcing models can be a solution to such difficulties. The service-provider companies, located in the city or country and regularly produces the most exceptional financial minds, this can result from tapping the talent pool efficiently. The client company can have such a highly qualified accountant through this business model while looking after their books. Outsourcing companies assure that the quality of operations associated with finance, accounting, and bookkeeping is error-free. 

 

4.   Advanced Technological Know-how:

Technology is making an immense impact in every field, which also includes accounting and finance. Many of the companies are not aware of the available applications in the market. Applications that are suitable for their business and some are too expensive for them to buy. Outsourcing in such cases can provide benefits to the companies as these external service providers are eager to invest in the technology as they know which type of application is best for which kind of business. They also profitably invest in the whole line of new applications as they are providing services to different clients with different needs.

 

5.   Protects Company in Adverse Economic Situations:

Due to advancements in technology, companies are continuously making significant changes in their workforce by aligning it with the economic situation changes. However, it is a challenging and resource-intensive process. Companies can be protected by outsourcing functions and processes such as finance and accounting. As the managing responsibility of the assigned talent to the project lies with the outsourcing company, the client company does not have to make any decision associated with their internal workforce or pay huge compensations in the retention pay. Check out America's Best Bookkeepers

 

6.   Flexibility and Scalability:

A client company can gain several benefits by selecting a specialist finance and accounting outsourcing company as their partner as it provides solutions customized for their requirement. They can even scale up or down the process regarding finance and accounting operations as per customer requirements. In this way, outsourcing can be advantageous for the business.

 

7.   Security and Confidentiality to Ensure Business Confidence:

A professional outsourcing company strictly follows the standards and guidelines pertaining to maintain the confidentiality of the information and data protection of clients. Through this activity of outsourcing companies, the client company can rest assured that their finance and accounting data would be handled and stored safely.

 

8.   24×7 Operations:

Companies can confer a time-zone advantage by outsourcing the functions of finance and accounting to an external service provider with operations provided daily. These companies assure that their finance and accounting tasks would be accomplished within the scheduled deadline.

 

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
vendor management - Complete Controller

The successful management vendor management is assured by following these six steps.

Step 1: Evaluation of Process

The vendor relationship is initiated before the period when you sign the contract with the vendor. The initial step for successful vendor management requires you to possess a complete understanding of the business processes that you are willing to outsource. The business processes’ keen analysis reveals the cross-sectional departmental processes, which are unmeasured, fragmented, disconnected, and unmanaged. Check out America's Best Bookkeepers

For successful vendor management, you need to consider that there is no requirement of outsourcing the fragmented and disconnected processes. Bookkeeping is essential for making decisions related to the outsourcing of fragments. To benefit from outsourcing, you must possess a strong understanding of your business processes, and the potential outcomes of your business processes. This information will assist you in the development of meaningful performance metrics. The evaluation of the process is an ethical ingredient. It allows you to create a shared understanding with your vendor related to the management experienced and performances.

Step 2: Selection of Insources and Outsources

After understanding the processes, you should carry out the objective evaluation of the right contenders for outsourcing. Before making decisions related to outsourcing, it is crucial to evaluate whether or not the process is core- or no-core, concerning the competitive strategy.

Making a selection of insourcing and outsourcing can be extremely subjective and requires strong approaches for focusing on the areas in which you possess strong skills. Irrespective of the criteria used by you for carrying out outsourcing, it is crucial to avoid making decisions for outsourcing lightly. Once the decisions related to outsourcing and insourcing are made, it is challenging and time-consuming to bring the process back in the house. Check out America's Best Bookkeepers

Step 3: Selection of Vendor

Previously, vendors got selected on the cost alone; however, the new scenario is entirely different. It is required to consider several other factors before vendor selection. For example, it is essential to find the cultural fit between the two organizations. The cultural compatibility consists of a range of factors, such as the organizational structure, the processes considered for making decisions, the rates of changes in the processes, the time orientation, and the workforce’s age.

Other considerations, which are essential to consider while selecting vendors, include vendors’ financial stability, vendors’ working environment, and the utilization of standardized procedures.

Step 4: Development of Contracts and Negotiations

 It is essential to bring the mentality of the team towards contract development as well as for the negotiation phase. Despite leaving the outsourcing contracts to the managers and staff, the outsourcing procedure must be carried out by legal, and senior executives. The process owners and the operational staff must be involved in the initial stages, not after signing the contract. The involvement of these employees is likely to contribute to assessing the performance and ensuring that nothing gets overlooked. The contracts and negotiations must possess outlined vendor roles. The contract must be flexible enough to renegotiate specified terms and conditions.

Step 5: Management of Working Relationship Check out America's Best Bookkeepers

After signing the contract, build a collaborative partnership with the vendor. They are establishing communication vendors about the goals of the organization, as well as about the process strategies. The management of the working relationship is made by creating the structures with the suppliers, directly interacting with the internal clients, and motivating vendors by promoting rewards and incentives. The management of vendors is an ongoing process, including process monitoring, tracking metrics, extracting results, analyzing performance, and assessing feedback. The management of the working relationship is carried out by selecting a governance model for assuring that all processes are delivered with efficacy. Process owner, vendor management office, and single point of contact are some of the most commonly used governance models.

Step 6: Evaluation of Results

All available information gets used to evaluate the further requirement of outsourcing relation to a vendor. The decisions about changing the vendor or bringing or changing the function in-house must not be taken lightly. Continuous evaluation of results is likely to contribute to maximizing the return on investment from the vendor partnership.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
outsourcing accountant - Complete Controller

Outsourcing is an effective cost-saving strategy, which helps businesses delegate duties, which saves time and money. Outsourcing is adopted when companies are unable to handle different aspects of the business processes internally. In the future, outsourcing will provide several benefits to the accounting operations of the organization.

However, when it began, it was restricted to low-risk functions like processing of payroll and data entry, etc. Now, customer service operations get outsourced on a larger scale. This expansion has resulted in bringing the cost benefits of outsourcing to the forefront, and numbers of companies are taking an interest in outsourcing their accounting processes. In the future, it will provide increased benefits to the companies who wanted to leverage the outsourcing cost benefits. Outsourcing reduces labor costs for companies and has become the key business strategy for accounting operations in small and large business enterprises. In the future, outsourcing will benefit the organizations for their accounting processes in the following way: Check out America's Best Bookkeepers

Improvement in Data Management

In the future, outsourcing will help companies in their business operations quickly identify the vast amount of financial data to make better decisions. Outsourcing will provide a wide range of benefits to the organization, including revenue assurance, working capital analytics, etc. Clients will be able to control their data so that the accounts receivable portfolio improves while maximizing the cash flow.

 

Provision of Integrated Solutions Check out America's Best Bookkeepers

Outsourcing will help to deliver integration and holistic approach in the future. Its value proposition will aid the organizations to expand further in the bottom line. It will ultimately target the top-line performance of clients directly.

 

Transformative Technology & Tools

Some of the transformational technology and tools essential for companies include reporting, business performance, process efficiency, and transparency can improve through outsourcing. It provides the ability to access different tools that will enhance the existing technology by taking advantage of developing technologies.  Companies can achieve better insights and can improve their productivity by using these tools. Companies can manage their business’ finance and accounting operations through outsourcing as it assures them to concentrate on other essential factors that are significant for the company’s growth. Outsourcing helps the companies to provide an approach that is strategic and value-added, which can provide ultimate benefits regarding their accounting processes. It can also enhance business efficiency as outsourcing ensures that accounting and financial data are secured so that companies can focus on other company operations. Check out America's Best Bookkeepers

 

Trends of Outsourcing in Future

  • Outsourcing will help build relationships that would be more standardized, and process and people drove rather than price-driven. This change will level the playing for outsourcing companies in the future.
  • The pressure of the cost will cover the way for custom outsourcing contracts that would be flexible in their Service Level Agreements (SLAs) and scope of delivery.
  • Smagiveness corporations will experience a higher adoption of outsourcing so that the operational efficiencies can reduce and time for the business can increase.
  • It will also help resolve the issues associated with rising raw material, transportation, and oil costs as outsourcing could keep their operating costs low.
  • In the last decade, more high-end critical business functions used outsourcing to complete. As businesses move towards cloud outsourcing, support, and development would also increase.
  • Organizations would move to cheaper destinations to take advantage of low labor and operating costs. Furthermore, the outsourcing of accounting operations will also help to manage the accounts more efficiently and effectively.
Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers

It’s never been easier to decide between outsourcing the business and doing it yourself. There are specific pros and cons associated with each source and can provide potential opportunities and challenges to the business. Individuals who are going to start a business should critically analyze each aspect that can affect the business. If you are going to start a business website, it is crucial to understand some of the available options that can help you to start your business on a low budget. To get the best exposure, an individual should need to pay for several features that are premium on most of the web building platforms. To decide which way to go, you should go through the four specific options that can help you determine which way to go. Check out America's Best Bookkeepers

Outsource the work

When a person is going to start a business website and has little or no experience of creating websites should outsource the web design work. However, it might have an expensive price tag, but it is often worth it. In such circumstances where there is a lack of experience, you must focus on the other aspects of your business and should pass the work to someone else to design the websites on daily life. Outsourcing can benefit the business than DIY in these conditions because outsourcing can help to allow the business owners so that they can spread the cost of creating and managing the online space, which is crucial for their brand.

Do it yourself with a friend

A person who wants to reduce the cost of the business as much as he can doesn’t want to go for outsourcing and don’t have that much experience so that they can do it by themselves should take help from a user-friendly website builder. But it is also significant for the business owners to bear in mind that by choosing this option, they’ll usually need to upgrade the premium or business package for them because they can demand an excessive amount of fee. Besides all the crucial aspects, they can help the business owners to enjoy the necessary business features, which include the name of the custom domain, options for e-commerce. They can also enable them to create accounts for users and to allow reviews.

Hire Someone

Freelancing also lies in the options for outsourcing your business website. It can be a good deal for the business owners to get a basic website design on the platforms of freelancing. If the business owners are unsure about where to start or what should be selected while building the websites by using different tools, they can get help by paying a freelancer a small amount of fee as they can put all these elements together for them. Even business owners who are willing to expand their budget further to cover a website that is fully customized can get help from a freelance developer as they can bring different ideas to life effortlessly.

Build yourself

DIY can also be the best option for all business owners. Individuals who want to be a successful entrepreneur and have enough experience about how to code and can navigate their way around the backend of a website should develop the site on their own. It is crucial to choose the option of DIY if you think that you have the skills to design a website because it can cut the costs of business. However, you should have the experience of web designing before going for DIY, instead of outsourcing it.

Either you are going towards outsourcing or DIY for the business, and it is essential to have a record of your business through bookkeeping. It can help you to review all the operations that are carried out in the business. Deciding between DIY or outsourcing is essential as it can affect the success of the organization because doing it yourself without experience sometimes can have a detrimental effect on the business as well; You might fail to develop a website. That is why it is important to analyze every factor before selecting an option to avoid any inconvenience.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers

Outsourcing or subcontracting is a business practice that took several years in the market to take hold. The essence of outsourcing is pure; one company outsources to another a specific series of products and services. There are multiple examples of companies that outsource in the world market. For example, computer companies commission the development of part of their products or telephone companies to outsource equipment and wiring installation.

The advantages of outsourcing for companies, professionals, and the end customer are many. Still, before deciding to implement it in your organization, you must look at both the advantages and disadvantages. Here are some pros and cons of outsourcing to help you make a sensible decision on whether to outsource. Check out America's Best Bookkeepers

Advantages of outsourcing

  1. Outsourcing allows the company to focus its technological and human resources on the key products or services it commercializes. Subcontracting some responsibilities or production to other qualified companies will make this focus possible.
  2. Outsourcing products or services frees the contracting company from a multitude of organizational and management tasks, training costs, and direct costs in labor.
  3. Subcontracting products and services allow the company to convert an important series of fixed costs into variable costs. From an accounting perspective, outsourcing can be cost efficient and profitable.
  4. The outsourcing process allows companies to grow more quickly in their specific economic sector. If a company does not have enough staff to fulfill production and other company needs, subcontracting can be key to continued growth.
  5. Outsourcing leaves time to react more quickly to the demands of a continuously changing globalized market. Giving production and other tasks to another company or individuals can improve overall time management and alleviate stress and missed deadlines.

Disadvantages of outsourcing

  1. Subcontractor services or products do not meet the expectations of your client. This will reflect on your company and could cause loss of business and poor reviews on social media. There is less control over the quality and training of staff which can be potentially harmful to your reputation.
  2. Offshore outsourcing to other countries with lower labor costs can lead to job losses in the local market of the contracting company. This con has been one of the most hotly debated issues of outsourcing to other countries. Many who are qualified in the local market of the contracting company could be laid-off or have their hours affected.
  3. Offshore outsourcing to other countries can be a detriment to the quality of the product or service that eventually reaches the consumer. Quality standards in some countries are far lower than others, subcontracting to countries with less regulations on standards could potentially lower the standards of your products and services.
  4. Offshore outsourcing to other countries can lead to poor communication because of language barriers, differences in cultures, and work practices. Though these differences can be overcome through training and setting standards, since the contracting company is not responsible for the staff, standards of communication may not be met.

Deciding if outsourcing is right for you or your organization can be a difficult task. Researching the advantages and disadvantages will help you make an informed decision that is right for your company.

 

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers

It is very useful for specific work or to improve in those aspects of your business where you do not have enough knowledge. Basically it is about hiring the service of other expert professionals in certain areas.

It is unproductive to try to implement a web page for your business, for example, without knowledge of computer programming. Or mount an advertising campaign on Facebook, if you do not understand social networks.

You have to be aware that delegating certain aspects of your business to other professionals is a plus. The time savings for you and the effectiveness of the results for your business are basic to take this step.

My advice is that you do not try to keep the accounting and taxation of your activity if you do not have enough knowledge. You will spend too much time and you will lose money from paying fines and surcharges. The idea is to reduce expenses. Remember, trust professionals.

Save on the development of your activity

Here everyone has to do an “examination of conscience”. You have to think if the activity you develop deserves to have a rented space or specific facilities. If your business can be developed at home, do not miss the opportunity to eliminate the cost of a rental. In addition, you can deduct expenses.

But, if you have rent to deal with, you are very attentive to the costs of supplies. There are certain offers for specific hours that you must match with your working hours.

If the telephone is another tool for your work, you have to know that the telephone companies also have offers, including plans for the self-employed. Take a look before deciding on one in particular.

And if your business could be developed in a small space, but you have to receive clients, for example, and you do not want to do it at home, opt for a “coworking”. They have shared workspaces where a fairly tight rent is paid and the common areas are shared with other workers. They usually include expenses in the price and there are different styles. Normally each one has its assigned and bounded space, even totally closed.

Beware of external financing

It is not bad to resort to a financial institution to obtain credit to start a business or certain projects within it. But it is not bad either, quite the contrary, be aware that there are other ways to finance cheaper than paying interest to a bank.

The first one is to postpone your debts with the Administration. Finance and Social Security offer you this possibility.

But you also have other formulas such as crowdfunding and crowdlending for which, in exchange for certain rewards or low interest, you get the necessary credit from a group of anonymous investors. Do not let them pass.

Make a good forecast of income and expenses

If there is something that will make you reduce your expenses is to eliminate those that are unnecessary. Ever before I have spoken on this point.

My conclusion is always the same: if you have taken the pulse of your business you know perfectly what you are spending that does not contribute to you and where you have to invest more to obtain greater profitability.

For this, it is important that you make a good forecast of income and expenses. That you know where the capital will enter and where you will invest it. This is an analysis that you must do every so often. It must be a periodic exercise.

Consult several suppliers before deciding on one, outsource parts of the production process, control delinquency, have something saved to deal with the unexpected … All this is vital to reduce costs and obtain greater profitability.

Go to digitalization to reduce self-employed expenses

It’s fashionable if you have already managed to digitize part of the process, make the final leap. From day 1 of this same month, the self-employed have to relate to Social Security with your digital signature and all the procedures are via telematics. So more than an option, this step is becoming mandatory.

The sooner you do it better because you save time and time translates into money. In addition, you will reduce costs in paper, printer, ink, electricity … And you will help preserve the environment.


 

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About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file, critical financial documents and back office tools in an efficient and secure environment. Complete Controller’s team of US based accounting professionals are certified QuickBooks™️ ProAdvisor’s providing bookkeeping, record storage, performance reporting and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay services. With flat rate service plans, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

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Transaction Cost Economics

Transaction cost economics is one of the leading linear models that explains what can be outsourced and what can’t. The model tries to clarify why firms exist and set their boundaries. The main idea of free markets suggests that the supply and demand drives the prices of goods and services which is referred to as price mechanism. According to one transaction cost theory, it is profitable to establish a firm because there is a cost associated with using the price mechanism. Another theory links transaction cost economics to economizing the costs rather than strategizing.

Accounting Outsourcing

When a firm decides to outsource either all or some of its accounting functions to a professional, the aim is to either cut costs, attain competitiveness or gain access to expertise. Outsourcing has captured the thoughts of businesses for a long time now and the reasons to outsource vary from mundane cost reductions to simply following the trend. There are many frameworks which have been developed to figure out what can be outsourced and what cannot, in order to optimize costs.

For any firm, there are costs associated with providing an activity internally which are called production costs while, if you purchase the same activity, it would be referred to as transaction cost. The transaction cost economic perspective suggests that all firms seek to equalize both these costs before performing a function internally or deciding to outsource it. Higher transaction costs would force a company to internalize their accounting functions.

Ex-ante and Ex-post costs

There are two basic transaction costs in outsourcing accounting for a firm, including ex-ante costs which are related to negotiating and drafting charges that are incurred before entering an agreement. The ex-post costs are related to haggling, maladaptation, governance and bonding costs. Maladaptation costs are related to redefining the contract when it is still in motion but is not meaningful to one or both parties. Researchers believe that maladaptation may lead to strong opportunistic behavior by one party and is one of the main drawbacks of using a transaction cost framework. To understand how transaction costs actually work, we first need to comprehend some of the key factors that can influence it.

Asset Specificity in Transaction Cost Economics

Specific asset is a term usually used for assets that have a greater value in their current use rather than if they had been used elsewhere. General assets, as opposed to these, have the same value everywhere. The four specific assets that have been identified include physically specific, human-specific, site-specific and dedicated assets. Asset specificity is one of the most significant factors in determining the intensity of outsourcing in transaction cost perspective. A high asset specificity signifies cost is only valuable within a specific transaction.

In accounting context, the physical assets of any firm would refer to the software and tools, while human assets would include information and human capital. Human assets will only be specified when an accountant requires particular knowledge about a specific characteristic of a firm to complete a defined accounting function. Transaction cost economics suggest that in time of high asset specificity, a firm would have to search longer for professional accounting and contractual negotiations would be more belligerent. In such a scenario, it is beneficial for a firm to in source rather than outsource and save high transaction costs and allow for frequent adaptations. In case the financial functions of a firm are highly tailored, the asset specificity would be influenced directly and outsourcing would become more costly.

Environmental Uncertainty

Environmental uncertainty relates to the expectedness and steadiness of accounting workload as a consequence of volatile business activities. Vicissitudes in corporate structure, mergers, acquisitions, plant closures and unstable sale and purchase invoices due to seasonality are some of the volatilities or uncertainties that have a direct impact on the workload involving accounting practices.

Transaction cost economics juxtaposes the effect of high and low predictability of workload on transaction costs. In an environment where a firm can accurately predict the unforeseen circumstances, the transaction costs are low and a firm should decide to outsource. However, an uncertain environment would escalate the transaction costs due to renegotiation of the contract with a professional accounting firm, leading to insourcing. Moreover, a volatile environment forces a firm to reason that they are better placed to assess their own needs, therefore, should perform all accounting functions internally.

Behavioral Uncertainty

Behavioral uncertainty in accounting refers to the difficulty of appraising the accountant in terms of performing the job efficiently. When behavioral uncertainty is high, the transaction costs will be higher because of monitoring, writing, negotiating and enforcing contracts in order to avert opportunistic behavior. Subsequently, the firm is unable to evaluate the performance of the service provider which will lead to high drafting costs for contracts. The transaction cost economics argue that this is such a scenario where a company would decide to perform the accounting functions internally and the manager would appraise the performances in-house.

Trust in Professional Accountants

Trust in professional accounting entails that the manager of a firm expects professional accountants to be trained professionals who are adept at their job, perform consistently and are fair in all of their dealings. Trust is an essential element of the deal and avoids any chances of opportunistic behavior by both parties.

Transaction cost economics argue that the primary aim of both parties should be to minimize the degree of opportunism. Consequently, a higher degree of trust will reduce the transaction costs and formal control mechanisms leading to outsourcing of accounting functions. Therefore, we can argue that trust is one of the crucial factors for a firm before deciding to hire professional services.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.