Accounting outsourcing is a great way for businesses of all sizes to streamline their operations and increase profitability. This can help to eliminate payroll, bookkeeping, accounting, and benefits errors. This will result in helping your business save a lot of time, money and energy that can be used towards other endeavors and services that you have to offer. Accounting and bookkeeping errors can cost a company a lot of money in late fees, bank fess, and similar expenses. So, by putting a company’s focus where it needs to be, which is on the bottom line, accounting outsourcing can help maximize a business’s effectiveness. Companies of all shapes and sizes can save a minimum of fifty percent of their yearly overheads by using accounting outsourcing services. This is especially valuable in times of a recession, when it pays to count every penny and evaluate every business expense to ensure that the corporation’s bottom line is not adversely affected. It just makes sense for a corporation that is concerned with its profit margin to look into accounting outsourcing.
Why Outsource?
Competition is pushing companies to offer their customers
- Faster response time
- Better customer experience
- Cutting edge services
Providing them while keeping the costs to a minimum is a challenge. For any business, time is best spent, doing what is essentially required for the customers rather than focusing on the daily accounting tasks. Time spent on these activities add little or no value to your customer relationship or growth.
To remain competitive, it is imperative that businesses rethink its strategies, take a hard look at where they are creating value for their customers and then focus on those areas.
Outsourcing is a very important strategic option for the companies to cut costs and increase focus on the areas of growth. Large corporations are enjoying the benefits of outsourcing for some years, now even small and medium sized firms can enjoy similar benefits.
Advantages of Accounts Receivable Outsourcing
Recovering past due accounts without spending more in staffing and training is one of the greatest challenges for any business. Most often, companies write off this receivable amount as a loss because the cost of hiring and training a qualified in-house staff to manage them outweighs the cost of collecting the debt. Due to this predicament a high number of small medium size businesses are running out of cash in-flow which is critical for sustaining their business. By outsourcing accounts receivable, small medium size businesses can avail a less expensive, higher quality specialized solutions to achieve significantly higher collection efficiency, thereby improving liquidity and company bottom lines.
By accounts receivable outsourcing, companies gain access to top notch Professional firms and their huge wealth of Knowledge and Resources in this domain.
It doesn’t take a long roster of past due clients to make a big dent in a company’s bottom line. According to statistics, once an account becomes 90 days overdue, your business is likely to receive only 75 cents for every dollar owed. After 6 months, the amount drops to 50 cents on every dollar and down to 25 cents after one year. Outsourcing addresses such delinquent accounts within the first 90 days, before they get out of hand.
Where to start?
If you decide to outsource, the most important step is to plan your outsourcing strategy. There are some horror stories of outsourcing going wrong and this was definitely caused due to poor planning and hurried execution.
For your outsourcing project to be successful, the most important step is identifying a suitable offshore partner who is flexible to match your exact needs and go with the right outsourcing strategy.
The companies that went with clear outsourcing strategies have enjoyed massive benefits, out thought their competition and are operating at an enviable position.
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