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According to a report in Capital Counselor, the top reason for outsourcing is cost savings. The report said that US outsourcing statistics show only 19.4% of marketers observed any change in outsourcing marketing activities during the pandemic. A CNBC report from last year reported that 60% of businesses closed as a result of the coronavirus pandemic were permanent.
Those that survived required significant unlearning and preparedness, including developing digital capabilities to support remote working and online transactions. Apart from direct economic shortfalls, businesses also faced the loss of staff through furloughs and layoffs. A recent McKinsey report on COVID-19 implications for business reports that 69% of respondents said that building skills of existing staff is more important than any other method of talent building, including hiring.
As businesses struggle with financial and staff shortages even in mid-year 2021, outsourcing can help build on existing capabilities, laying a firm foundation for short-term sustainability and long-term. A PR Newswire article says that as small businesses grow, they should prepare to outsource some of their accounting needs. Costs involved in hiring, training staff, setting up infrastructure, and maintaining the entire in-house set-up requires heavy capital investment that can be saved by outsourcing.
Given how accounting and bookkeeping are central to business profitability and financial health, here are some reasons how outsourcing accounting functions can help your efforts at business sustainability, growth and development.
Automation, cloud computing, and robotic process automation are no longer simply state-of-the-art; they have gained higher relevance in a world that needs to gear up for online and digital transactions to adhere to contactless transaction norms.
Developing digital capabilities is central to leveraging cloud benefits. Businesses that are grappling with financial shortages can benefit from outsourcing assistance. A Deloitte report refers to the need to build value while cutting costs as ascertained by the current COVID-19 pandemic.
Outsourcing to enable company digitization can help free your time to spend addressing and meeting changing customer expectations in an unpredictable landscape where social distancing restrictions can disrupt timelines and deadline planning.
The plug-and-play convenience provided by outsourcing providers can help ensure companies continue to sustain existing business, while preparing for the digital needs of the near future, including evolutionary cloud processes and solutions.
Value addition and cost-reduction
Regardless of whether your small business is a startup or is established, cost savings are a priority. As quoted in a Capital Counselor report, cost reduction is the top reason to outsource for 70% businesses.
Outsourcing accounting services enables companies to optimize their resources, reducing workloads, and helping them focus on planning, strategy, and networking needed to grow a business. One of the direct benefits of outsourcing is that companies can save money spent on hiring, training, and paying salaries to staff. By outsourcing accounting tasks, companies can also utilize the expertise and reliability of outsourcing providers to add value to their client deliverables or even extend deliverables without first making capital investments in-house.
Companies can also entrust accounting functions to outsourcing firms to save money on expenses associated with in-house infrastructure set-up, including software, upgrades, and security patches. All of these not only save money, they also reduce the hassle and worry that accompanies creating systems in-house.
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Trends Influencing How Small to Mid-Sized Business Accounting Departments Operate.