Businesses can remain healthy and operative only when all the functions in the company work in tandem. A disruption in one of the functions can affect the company's other functions and result in a divergence from the adopted goals and revenue targets. Businesses such as SMEs with limited sources may face issues to execute all the required functions. Outsourcing such processes can prove effective for such companies.
Outsourcing in a company involves outsourcing some functions to a third-party company that are essentially experts in executing the function on behalf of the company. There are many advantages of outsourcing, including cost savings, availing the expertise and technology advancements, among other things. In addition, it allows the management to focus on the company's core activities to achieve revenues and growth.
During times of economic crises, the company management needs to focus more on identifying issues, finding solutions, implementing mitigating risk strategies, and analyzing markets instead of concentrating on the non-core activities taken up by professional service providers with relevant knowledge and qualification.
Outsourcing functions in a company can be occasional or regularly depending upon the requirements of the business. Accordingly, the company makes contracts with the service provider. Outsourcing can often imbibe innovation and allow access to new skill sets that can positively impact the organization.
Benefits of Outsourcing
One of the major benefits of outsourcing is that owners and managers can regularly receive financial information planned and accurate. There are other benefits of outsourcing as shown below:
Businesses can achieve their objectives when the core activities are focused on many factors such as market research, competitiveness and marketing strategy. The last thing the business owners would want is to worry about the non-core activities at the expense of the core activities. In addition, handing non-core activities to professional service providers can ensure timely execution and reporting.
Specialized Skill Sets
The third-party service provider is usually experienced professional handling the outsourced functions. The service provider providing services to many companies must be experienced and skills honed for the requirement. As a result, companies need to invest additional resources to upskill their employees.
Accounting is a crucial function that requires following best practices with necessary controls in place. The auditor will carefully examine the company book of accounts during the audits; improper accounting will lead to issues that may affect the business. In addition, certain functions require adherence to compliance as per the law. Therefore, a qualified professional with experience and up to date with compliance requirements can prove very useful.
Costs Savings and Hiring Flexibility
Hiring staff is always a tedious and time-consuming process. Additionally, the costs involved in employing and maintaining staff are higher. Companies need to additionally bear expenses related to office space, insurances and other perks. Outsourcing non-core functions to service providers result in lower overall costs.
When the business sees a spike in the activity, many functions may need additional hands to carry out the necessary activities. Companies may not have the required time and resources to immediately fulfil the requirements. The professional service provider with significant staff can quickly deploy the required workforce as per the requirement.
Activities a Company can Outsource
Irrespective of the industry, the outsourcing arrangement can provide many opportunities for companies to innovate, achieve growth, and rise above the rest of the competition. The outsourcing tasks in a company include invoice generation, trial balances, profit and loss accounts, financial statement generation, Payroll Processing etc.
Outsourcing can additionally provide complex and value-added services, including financial planning, financial analysis and business forecasting, cheques and treasury management services, among other things. The below are some of the activities that a company can outsource:
- Outsourcing Bookkeeping and Accounting functions include maintaining ledgers, invoices, preparing financial statements and bank accounts transactions.
- Outsourcing VAT-related activities, including VAT preparation and VAT Filing
- Outsourcing Company Payroll processing includes processing timely salary credits, bonuses advances, loan advances, employee expenses and leaves, employee joining and exit.
- Outsourcing lead generation and customer services include support on various mediums of email, phone calls and internet chat.
- Outsourcing social media marketing to generate sales via social media posts, campaigns and lead nurturing.
How can We Help?
Jaxa Chartered Accountants, an accounting and audit company with a presence all over UAE, has served many local and foreign companies over many years. Our strengths of financial expertise, efficient and reliable staff, experience working with Government agencies have made us one of the best in the industry for companies looking to outsource financial functions. Please Contact Us to know more about our offerings. We'd be delighted to help!