A Resurgence of Outsourcing

The word “outsourcing”, in some instances, has a bad connotation, but for many it means being able to compete with other companies worldwide. The most basic method of outsourcing is using an external service provider to perform functions that the company does not want to perform itself. There are many ways that this can be done and not all of them mean sending business overseas.

There are two different types of outsourcing: onshore and offshore. When Company A has Company B, which is in their same country, complete the service, which is onshore outsourcing. Offshore outsourcing has two types, nearshoring and farshoring. For any company that is outsourcing to a company that is geographically close to them, but not in their country, they are nearshoring. Farshoring would be using a company that is not geographically close to them.

A company of any size can outsource. There are two sides to outsourcing—a service provider and a service buyer. To help companies find other companies for outsourcing the International Association of Outsourcing Professionals (IAOP) generates a list of the best services providers.

There is not an ideal way of outsourcing for any company. By looking at all the possibilities, finding the right solution for their company is possible, but first we need to know why a company outsources. The main reason is to reduce operating cost, but other reasons include assess to new skills or technology, and to make global operations more effective.

Companies that choose to outsource services are typically outsourcing IT, human resources, finance and accounting, procurements and facilities management. The biggest of those services outsources is IT. Many times the company providing the IT services has technologies that midsize to smaller companies do not have the money to invest in, and it make more economical sense to outsource it to a company that has the technology already.

Outsourcing in some aspect will continue into the future. There have been predictions that offshoring will continue to increase. With the increase of unemployment, many companies are looking at different cities in the US for outsourcing, but with wages still cheaper in other countries, outsourcing will be here to stay.

Here at Crowley & Halloran CPA’s, our consultants would be happy to help you plan and manage your business budget. Click here to request a proposal.

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Want an Efficient Business? Consider Outsourcing

Small business owners have so much to try to balance to make their businesses successful. They have to do everything, from hiring employees to taking out the trash at the end of the day. Part of what makes a small business enterprise so challenging is the overwhelming nature of getting things started. Often, outsourcing certain tasks, such as your accounting and payroll, can free up some of your time to focus on marketing your company and serving your customers.

Freeing Time for More Important Endeavors

Outsourcing provides small business enterprises with several benefits. The first is the most obvious, and that is the time freedom that it gives. When you, as the owner of your business, are not spending your time on tasks that someone else can do, you have more time to focus on actually growing and marketing your business.

Improving Efficiency

Outsourcing improves efficiency. By outsourcing, you will not have to learn skills you do not have, but rather can let someone who has these skills handle the tasks for you. This makes your business run more efficiently, because you will not have a learning curve to deal with.

Saving Money

While it may not seem like paying someone to do something for your business would help you save money, it actually can. When you outsource, you do not have to pay an individual to come to your business, get trained, use an office and receive benefits. Instead, you can pay just for the services you need, and that cost is almost always much less than you would pay to hire a staff member to do the job.

Utilizing Experts

Finally, outsourcing allows you to tap into the knowledge of experts. For instance, if you outsource your accounting, you will have a fully trained accountant to help manage your books and payroll needs. Instead of relying on someone who might have good “business sense,” but not necessarily accounting training, you will have someone with all of the training necessary to do the job well. This allows your small business enterprise to act like a big firm filled with highly trained professionals, all while staying within your smaller operating budget.

Frankly, outsourcing some aspects of your business, especially those that are better handled by a trained professional, simply makes sense. As you are looking for ways to improve efficiency and compete with larger companies, consider finding ways to outsource tasks for your business.

Here at Crowley & Halloran CPA’s, our consultants would be happy to help you plan and manage your business budget. Click here to request a proposal.

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