What compels businesses to make the decision to start shifting non-core activities overseas? Isn’t it risky to have your accounts work done by someone who is not a native English speaker and works thousands of miles away? Well, the pros must be outweighing the cons since the outsourcing industry hasn’t really slowed down and is expected to be worth USD 1.49 trillion by 2025 according to Grand View Research, Inc.
As businesses grow and flourish, many of them look for strategies to help regulate expenses, stay ahead of the competition, and implement innovative solutions without increasing the overheads. And accounting outsourcing – when done professionally – happens to be a solution that satisfies those requirements. However, not everyone is open to change and there could be some pre-conceived notions preventing CEOs and FDs from taking advantage of outsourcing finance and accounting services to India or other destinations. In fact, we’ve addressed some of the common accounting and payroll outsourcing misconceptions in our infographic.
So, why do businesses continue to outsource their finance & accounts functions to India? Here’s what we understand from what our clients tell us:
1) Cost savings
Business leaders looking for cost gains often choose to outsource their finance and accounts functions. Within a short period, businesses can cut down the costs by up to 50-60 compared to in-house operations. The key challenge is to achieve this without disrupting operations, or negatively impacting the quality of output. With a specialist accounting services supplier, these issues are easily overcome. The major cost savings come in the form of labour arbitrage, but value additions in the form of improved efficiency, revenue recognition and higher rates of accuracy can also deliver significant monetary benefits.
2) Flexibility in scaling operations
Quality finance & accounts outsourcing companies usually have strong recruitment capabilities and they operate in cities that have a surplus of accounting graduates. This makes it easy for the suppliers to hire skilled and qualified accounting professional in a relatively short period of time. Consequently, staffing shortage is a non-issue when you choose to outsource (as long as you are dealing with a mature service provider). The release from the stress of staffing issues plays a major role in the decisions of UK and US business leaders who usually face major challenges finding and retaining accounting staff locally.
In addition, you can also increase or reduce personnel according to busy times and holidays. In fact, many outsourcing providers will work according to clients’ calendars and are willing to go the extra mile to handle overloads, such as end-of-the-month and year-end accounting. The outsourcing partner may have a significant bench strength, or may have a surplus of trained resources as a back up to ensure the continuity of operation. Some staff may even available as a backup during holidays to guarantee timely delivery.
3) Seamless communication
We’ve all heard the saying “communication is key” well it applies even more when you’re trying to explain processes from across continents. CEOs and Finance Directors are hesitant at times to consider cost-saving options such as outsourcing due to the fear that an offshore team may not be able to communicate fluently in English or may not be a good cultural fit.
A good dedicated accounting team will be able to easily communicate over a phone, via mail or through video conferencing. The teams usually receive English communication and UK culture trainings to empower them to work efficiently with the clients. Companies like QX often hire people who have studied or worked in the UK to ensure a good fit. International Private Leased Circuits (IPLC leased lines) to ensure that you can just pick your phone and enjoy next-room telephony at UK rates.
4) Data security and compliance
Data security, which also now comprises of personal information privacy, will always be a concern for businesses and individuals wanting to outsource their work. Companies in India that focus on outsourcing appreciate this apprehension and have established themselves as credible outsourcing partners by pre-emptively addressing data privacy and security risks. Top Indian outsourcing providers also take measures such as attaining Cyber Essential Plus certification and reviewing their regulatory compliance to ensure it is in line with the European Union’s new General Data Protection Regulation (GDPR) rules.
A quality service provider will have achieved the globally recognised ISO 27001 certification, or other relevant certifications, clearly demonstrating a commitment to process effectiveness and data security. At QX, we ensure the highest level of data security by deploying multiple layers of protection and adhering to highest international information security standards. We’ve also implemented the following controls to minimise security breaches:
- Access cards and biometric login for all employees
- Confidential, non-disclosure agreements signed by each employee
- Data access restrictions to authorised users only
- All methods of data transfers to external sources are controlled
- SSL secure network and electronic locks on every access
- Anti-virus software
- 24x7 CCTV monitoring
- Regular security audits
To know more see our video on how QX keeps its client data secure.
If you are considering outsourcing accounting and finance and want more information, please get in touch with us on firstname.lastname@example.org.