The concept of operating Industry is changing nowadays.
Organizations are leveraging that concept as a strategy to change their operating models.
Are you aware of that concept?
It’s none other than outsourcing. Outsourcing is a blessing for businesses in today’s dynamic market. Companies are outsourcing different services and getting the work done in the lowest possible costs without compromising on quality and compliance.
Outsourced accounting services are one that reduces the cost of hiring in house employees and brings down the operation cost without losing efficiency/productivity. Therefore outsourced accounting services are undoubtedly an intelligent and smart business choice.
Accounting services are one of the most outsourced services among businesses.
Considering outsourcing as the best cost-value relationship many companies decide to outsource their accounting services. But the most challenging thing is to select a reliable outsourcing partner. Because selecting the wrong service provider can spoil your company’s reputation and bottom line. Therefore take utmost care before deciding your outsourcing accounting partner.
Here are the factors to look at before selecting your accounting outsourcing service provider
Minimizing operation costs is the primary motive of outsourcing accounting. Therefore you have to check whether outsourcing helps you in reducing your capital in hiring employees and equipment. You also need to maintain balance between quantity and quality of the services provided by the outsourcing partner.
Do not compromise on the quality just to save a few dollars in the long run. Check all the pros and cons before arriving at a decision and consider this factor at the last for selecting an outsourcing partner.
Resources and Technology
Evaluating resources skill set and competency are essential while selecting the outsourcing partner. So check their resources professional expertise in accounting services. Accounting is an intricate and time-consuming task best left to accounting outsourcing companies with good track record and long years of experience in this field.
Check with the partner about the tools and technologies used by them for your project. These elements will help to assess partners’ capability of handling all your outsourcing needs.
If they are more expert in software technologies then the quality of your project would be better. Technical expertise is more important than limited technologies. To test their capability you can utilize their experience for the proof of concept project (POC).
Checking the market reputation of your partner is equally important as no business can afford quality, and deadline. The best way is to research the market and check their credentials and reputation. Go through the list of companies that already availed your partner services, connect with few clients and note their experience. This will give you a clear idea about their capability.
Do not lose any open ends from your end. Once you are convinced about the partners' market repo and confident that they can align well with your business goals and has a good track record of delivering on time then only you select them as your outsourcing partner.
Agility of Team
With time rules keep on changing regularly in the account and finance department. Income tax policies, accounting rules, and regulations, etc. Outsourcing partners should be flexible in adapting these changes quickly and continue providing an efficient level of service.
Reliability of Services
Trustworthiness and consistency are the two critical elements that ensure the company’s credibility. Therefore before you sign an outsourcing contract, visit the vendor's site. Check on the infrastructure, back-ups for downtime, safeguards and the availability of the staff.
Verify all the certifications, achievement remarks and the quality standard of the services offered by them. Make sure to visit the vendor’s site personally and check that everything is present on the floor not only on paper. This will give you a fair idea about the reliability of your accounting partner.
Flexibility is key in today’s global economy. Find out whether the outsourcing partner is rigid or flexible in their approach. Usually, outsourcing contracts are in place for a long time.
Over time situations may arise where renegotiation of the contract is required. In such a case your partner should be flexible enough to understand the customer concerns and offer possible solutions.
Communication is the key to success for any type of business. Many companies face this problem while outsourcing to third party. Therefore you need to check whether your outsourcing partner should be able to clearly understand the scope of work and promptly reply to your queries.
The partner should be able to understand your requirements clearly, convey their queries on time so that there will be no delay in the completion of your project. They should be able to use different communication platforms using the latest technology and can speak and understand the language your business uses fluently.
It is important to check that your outsourcing partner will take care of everything from scratch. Their approach should be solid and they should be able to produce the correct results. When the outsourcing partner takes complete project ownership then you need minimum supervision and guidance for taking the project to the next level.
The Management Team
It is important to know who will be leading your offshore team. Check whether they have appropriate skills and experience to meet your project requirements. The experienced leader of your offshore team ensures the seamless transition of work and a successful outcome.
The Service Level Agreement
The service level agreement is the most critical component between a customer and a service provider. This agreement states all key performance indicators required to measure the performance of the service provider. In case of any failure, neither party can plead ignorance.
So ensure that everything should be clearly written out with no room for confusion before you embark upon any outsourcing venture.
Data Security Measures Adopted
Data security is the biggest concern while choosing an outsourcing partner. Especially accounting function contains much sensitive information which can’t be disclosed. So you need to check and gather all the evidence from your outsourcing partner related to company’s physical security, data management, and records disposal practices.
Once you are convinced about all the security measures that are in place with your partner you can ensure that they have the ability to safeguard customer’s data and prevent its misuse.
Transparency is crucial in building a stable and trusted relationship with an outsourcing partner. Since teams won’t work face to face each day, therefore, it makes it much more important to commit to transparency before the engagement.
It is hardly visible at first glance but while selecting outsourcing partner you need to ensure in regards to authenticity, timeline, reach and contract of your business. This helps you to tackle any issues with the outsourcing partner.
While deciding to outsource, do it comprehensively. Handing accounting of a portion of the business and keeping the rest for in-house processing will only lead to messing up of a balance sheet.
Therefore ensure that the outsourcing partner can take full charge of the total accounting requirements of your business. Complex heads, for example, accounts payable and receivables, bank and credit card compromise and upkeep of records should be on the top of the list. Sales tax and filing returns, as well as the calculation of different duties including business and individual expense, should also be dealt by the outsourcing partner.
Pricing is the most important factor to ensure that the offered price is within your budget. You need to check that the cost charged by the accounting outsourcing partner is less than the local salary or not, else it is of no use.
Compare the offers of other partners and find out what are you going to get from another vendor as well. Some partners may offer customer support at no extra charge, which is a great deal itself. So price is immensely important but doesn’t let it be the only deciding factor.
Companies should have the ability to expand or downsize the business. So ensure you are working with the outsourcing partner that has enough resources to match your demands in a short time span. A good outsourcing partner can ramp up or ramp down the number of employees as per the project need.
The stability of operations is an absolute necessity for consistency of service. Therefore it’s essential that your partner should be in the business for longer duration. It should not happen that your outsourcing partner stops to serve you in the middle of financial year due to one or another reason.
Therefore checking the past records of the outsourcing partner will help you in establishing the trust necessary for a working relationship. It will also provide final assurance that you have made the right decision to go ahead and sign the contract.
Wider Experience Portfolio
Selecting a partner having more experience in accounting gives confidence that they can provide complete accounting outsourcing solutions. Also review the ratings offered by the national and worldwide organizations that assess the specialist as per the standard protocols and industry best practices.
Scale of Operations
Select a partner that is capable to maintain the robust scale of operations. This shows their lengthy service profile and capacity to cater to the business customers satisfactorily and according to their custom report.
Wider and strong portfolio indicates their stability and professionalism.
Ability to Meet Deadlines
Cost and timely delivery are the driving factors in business. Both are equally important. So ensure and select the outsourcing partner that adheres to the quality and delivery timeline.
If the outsourcing partner has little quality control measures or does not have any back-up plan then they will miss a deadline. Better not to select this outsourcing partner.
Employee retention is highly regarded as one of the most important factors in selecting an outsourcing partner. Especially in outsourcing accounting services this plays a significant role. Therefore you need to check how your partner is valuing their employees. Do they have any incentive programs for their employees? Do they conduct any team building activities to help them unwind?
If their employees are running in the system for a longer time that itself says a lot about how they treat and handle their people. When employees will be happy they produce higher quality of work and in less turnaround time.
Future of accounting services in India
Accounting services in India have reached a pinnacle stage and become a go-to option for multiple organizations. Accounting services in India market size is expected to witness robust growth by 2024.
In India accounting outsourcing has been a booming industry. With its ability to adapt to the changing needs quickly India continues to be the preferred destination for outsourcing accounting services.
India not only has a lower labor cost but they have multi-skilled workers who can execute the task more accurately. Thus accounting services in India match clients’ requirements not only in terms of price but also in terms of talented professionals, time zone difference, operational efficiency, good communication, customer service quality, and business process excellence.
Outsourcing demand is creating more employment avenues and increasing start-up culture in India.
Outsourced accounting services act as a savior as they reduce your business costs and optimize your operations in a better way.
By taking care of these factors while selecting an outsourcing partner. You would be safe and get abundant benefits from multiple dimensions like cost, efficiency, expertise and above all high professionalism.
If you are looking for accounting services partner, then contact pay square accounting outsourcing solutions. They are the leading accounting outsourcing services in Pune helping companies to achieve high-performance business results.