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Outsourcing Done Right: Tips for Avoiding Common Problems

Outsourcing Done Right: Tips for Avoiding Common Problems

Generally, it has been observed that the main reason why people or organizations hesitate to outsource any of the business functions or tasks to third-parties, is that that such people themselves or people in the close network, have had some bitter experiences in the past when outsourced any business activity to someone. Such an unwarranted experience is a result of the lack of knowledge and awareness or maybe because of negligence about the outsourcing industry. 

Outsourcing brings in a lot of benefits for your business organization, to list a few – it is relatively cheaper as compared to employing a full-time employee to carry out given tasks, keeps the manipulation away and intent clear as the work is being performed by independent parties, and delivers the work within the mentioned timeline. However, it is crucial for you to note that these benefits will come only if you understand the tasks very well, the expectation out of such tasks and the third-party to whom the outsourcing is proposed to be done. If any of such aspects are unclear or ambiguous, you may end up incurring an unnecessary cost without having the intended outcome. 

As it is rightly said, outsourcing the business-critical activities to the wrong third party or agency can cause irreversible damages to your brand name, and this will cost you in the long run as well (commercially as well as non-commercially). Hence, it is highly advisable to invest your time in identifying the best-in-class third-party firm whom you can rely upon for the quality of work, timeliness, and a dedicated support team.  

You must have heard people complaining about how their business operations suffered just because they outsourced their organizational requirements to a wrong or incompetent third party or because they did not invest time in checking the authenticity of the consultancy firm. In such case, no matter what the reason is, the business is and will always be at stake.  

This article revolves around all common mistakes organizations make while outsourcing their business-critical activities to a third-party consultancy firm and measures to overcome or avoid such mistakes. 

So, without asking you to wait any longer, let us begin.  

Tips for Avoiding Common Problems

Four common problems and mistakes to avoid while outsourcing

People often commit a few mistakes while outsourcing their business requirements to outsiders, which leads to irreversible tragedies in their operations. Here are the four primary errors that businesses make and face undesirable results.  

Many businesses experiences reporting issues despite of outsourcing the complete accounting and bookkeeping functions. When the situation is being analyzed, it is found that due to the inefficiency and inaccuracy of the third party, the business is suffering. 

The primary showcases of inefficiencies are – 

  • Recording transactions under incorrect head, 
  • Missing the timelines, making the impact of outcome weak 
  • Work done by juniors, not being reviewed by the experienced seniors, etc. 

Noticing such types of issues at the very initial stage can help the business save itself. However, sometimes the level or the intensity of these mistakes are incredibly minimal and may go unnoticed. It comes into the picture when considerable damage has been done. Inefficiencies in recording, managing, and analyzing financial transactions will give you inaccurate financial statements like balance sheets and profit & loss statements, leading to your business’ incorrect financial results and misinterpreted financial position.  

At the stage of proposal, when quoting the price, many outsourcing firms quote a price which is below the industry average, just to attract the attention of the people in need. However, they tend to recover the costs by charging different forms of hidden fees and additional costs. These bewilder the clients at the time of releasing monthly or quarterly retainer fees. Please note that this may not always be the case.  

Sometimes, outsourcing companies quote below the average price and delivers low-grade quality services, because of their lack of knowledge, competencies, and experience. Thus, with below-average price comes the below-standard services. 

To avoid such circumstances or situations, it is highly recommended to outsource your business requirements to someone who can make a tailor-made plan for you and charge only for those services that you are willing to seek.  

Sometimes, the accounting / bookkeeping outsourcing firms tend to hire the self-taught accountants and bookkeepers to cut down the cost of services. With this, comes the incompetence and lack of knowledge, unprofessionalism, and unclear communications skills. When such people try to offer the services that your business is looking forward to, blunders are bound to happen.  

In order to avoid such situations, it is vital for you to check the experience, knowledge, and expertise of all the team members working for the outsourcing company and are going to work for you. This saves you from unnecessary hassle and safeguard you from undesired results arising due to work being performed by unprofessional amateurs.  

In addition to that, two-way communication is the key to every successful task. You have to be extremely clear in communicating your expectations to the outsourcing firm and the results expected out of it. Don’t shy away from asking the team twice whether they have understood your requirements and demands well or not.

Poorly managed outsourcing service providers can also bring a toll on the confidentiality and security of your business-critical data and overall business. In addition to that, with such service providers, the confidential information related to your clients is also at risk. You obviously would not want a situation where you break the trust of your clients by keeping their personal / commercial information at stake.  

To avoid such situations, you must outsource all the essential business requirements to someone who knows the value and importance of data security and also knows how to maintain that.  

Acquiring Professional Accounting and Bookkeeping Services

When it comes to accounting and bookkeeping services to be outsourced, there are a few measures that will keep you away from unfavorable and undesirable situations. Here are the top three techniques or tips that you must follow to get the best and expected results from the services.  

Before you reach out to any professional accountant or bookkeeper to outsource your business requirements, it is vital to check the actual need for the same in the first place. For instance, if you just have started up and immediately outsource all your accounting-related requirements, you will waste your business’s scarce capital. This is due to reason that as a start-up, you may not have much of the transactions to be managed or recorded, and this may be taken care in-house only. However, as the business grows, you might want to outsource these requirements. Hence, evaluate the scope of growth, your current financial position, the volume involved and internal capacity and capability, etc.

The back-office department of your business is held responsible for the success or failure of your business to a large extent. Hence, it becomes extremely vital to ask your outsource service provider about their experience and expertise in working with different clients from different industries. This gives you a fair idea about the overall experience and proficiency of the team you are handing over the crucial functions of your business.  

To stay competitive with the latest market changes and ongoing trends, it is imperative to walk hand-in-hand with the latest technology and developments. Merely using the newest technology is not enough, but you will also require people who are acquainted with the technology and can use the same in favor of your business. Do not shy away from asking which version or technological advancements the firm is using or the workforce it is having to operate that technology or software. 

Final Words 

Now, you are well-versed in the common mistakes committed by individuals while outsourcing their requirements and the ways to overcome them that will keep you safe from so many undesirable and dramatic situations. It can also help you take away that stress and help you make your decision around what piece of activities to be outsourced and to whom. 

If you are looking out for a professional outsourcing firm, who is well experienced, have served many clients across different industries, and adopts the best-in-class technological advancements, then CFO UAE is your one-stop destination

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