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6 key Factors that Influence your Business Finance & Accounting Outsourcing Success
Posted by ICCS BPO on Tuesday 10th of November 2020
Outsourcing is the latest fad in the business world .Every business worth its salt has been trying to enter the outsourcing arena .Why is business financial and accounting such a lucrative option for outsourcing companies is actually quite simple. One gets to have the best of best via outsourcing the specialized fields like finance and accounting .It's not only a financially viable option but also entails that the best brains are available within the budget .So basically if one wants to have reduced costs, best of the best brains, latest technology and expertise at hand then outsourcing is the only way forward for the following key reasons.
Enabling to focus on the key business
Finance and accounting are actually one of the most outsourced business activities of all. When the companies outsource the accounting and finance function they are able to concentrate more on their core functions .Thus enabling them to have a more profitable preposition .This is why more and more smaller as well as bigger firms are looking at outsourcing this function .`
Outsourcing the business function is definitely cost effective and pocket friendly .Getting the best within the budget seems to be a big motivational draw for the company’s .The decision to outsource the functions is firstly and fore mostly looked from the budget angle and outsourcing companies definitely fit the bill. For this sole reason alone there has been mushrooming of accounting outsourcing service companies in India. More and more BPO companies in India are looking at expansion in this arena.
Now Let's look at the below key six factors greatly influencing the success of A & F outsourcing companies in India :
Optimal pricing strategy seems to work best in the accounting and financial success of a BPO offering accounting and financial outsourcing .Too high a price and budget goes for a toss and too low is a big demotivational trigger .To get the best out of the service provider and have a win - win for all the parties involved .Now pricing can be further done in terms of FTE (full time model) OR transaction based pricing model. FTE model involves paying basis time and material investment of the service provider .While on a Transaction based model the price is fixed basis the number of transactions performed .However more and more BPO companies are employing Hybrid pricing model which is a better preposition to ensure success in the outsourcing .
The method for ensuring success in accounting and financial outsourcing depends to a large extent on the method of outsourcing .Some companies choose to outsource the entire accounting and financial function while some only outsource a portion .Sometimes different functions are outsourced to different accounting and financial outsourcing companies. Cost benefit analysis plays an important role here in decision making .Which could to large extent help in boosting core functions of the company.
Location of the service provider
Choosing the service provider from the right location is also the key factor determining the company's success story .Now location with concentration of talented manpower pool, skilled and reasonable cost is a big draw .Cost of logistics, transportation, training, currency differentials, inventory costs etc. are also factored in for making the apt decision .Right location definitely boosts the cost saving and hence greater profit margins.
The greater the customization the more are the chances of business expansion and success .More and more companies are looking for customization to suit their needs .We can surmise that the F & A process for an automotive firm would be different from a healthcare firm .Adaptation and customization could be the extra ingredient for smooth sailing and expansion of business .Tailor made is the word .Nothing works better than adapting to the different arenas via customization.
Security of Data involved
Utmost care needs to be undertaken to ensure that sensitive information is not leaked and accessed by the others .Confidentiality of data needs to be ensured at every step of the way .This is simply non - negotiable .Data centres had to be hack proof .The security arrangements are needed to be discussed at length with the service provider .Frequent audits and restrictions are the key words here .Only designated person to have access to the critical data.
Regular feedback and cost benefit analysis are the order of the day if success in outsourcing is to be attained .Regular feedback helps in timely mending of the loopholes and much of the wasteful activities can be done away with .Improvement in operating costs, enhancements in timely delivery of processes, ensuring compliance at all levels are sought actively .If these are not achieved then losses will mount and cost -benefit ratio will go for a toss.
Companies swear by the above mentioned key determinants to ensure smooth sailing of A&F outsourcing as well as heightened profit margins and least security breaches.