why outsource your accounting business?
TRANSCRIPT
Grow your firm by leveraging technology and outsourcing
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1. Outsourcing introduction2. Business processes that are outsourced3. Why do companies outsource?4. When to outsource5. Who is doing it?6. Top market7. How can you do it8. The technology behind outsourcing9. Benefits of outsourcing10. Outsourcing pitfalls11. Infrastructure12. Questions to ask when you consider outsourcing13. What next14. Team and experience – Ravi Kurani15. Questions
Agenda
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“Definition
A practice used by different companies to reduce costs by transferring portions of work to outside suppliers rather than completing it internally.”
What is outsourcing “www.qxas.us.com
http://www.brainstormmag.co.za/index.php?option=com_content&id=673:outsourcing-timeline
Outsourcing history
Adam Smith, formulates theory of competitive
advantage extracting the notion of outsourcing
1776
1930s
Textile industry work is outsourced to England
1960s
Outsourcing becomes very profitable with the
advent of the WWW
Computer companies outsource their payroll
1970s
1980s
Accounting services, payroll, billing, and word
processing outsourced
1989
Outsourcing is formally identified as a business
strategy
1990s
Became common to outsource tasks with massive information
handling such as data processing
2003
Outsourcing accumulates $298.5 billion in global
revenues
Outsourcing was one of the topics of debate between the candidates in the U.S.
presidential election.
2004
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o Finance and accounting services (most common being tax preparation and payroll services)o Contact center serviceso Healthcare serviceso Human resource serviceso Software development, testing and maintenanceo Web designo Manufacturingo Data entry serviceso Virtual assistance serviceso Market research and development
Common business process that are outsourced
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Specific business processes being outsourced in the accounting industry
Order to cash order management, billing, accounts receivables, cash receipts and application, credit and collections, bank reconciliations
Purchase to payment
purchase order management, vendor management, cash disbursement, bank reconciliations, contract administration, cost accounting, fixed assets
Hire to retire payroll, benefits administration, employee data administration, pension accounting, travel and expense compliance
Financial reporting
general accounting, consolidation and management reporting, intercompany allocations, activity based costing, reconciliations, project accounting, tax compliance, tax returns
Compliance and control
cash management, treasury, budgeting, forecasting, regulatory reporting, risk management
Source: ICAEW report
Finance and account outsourcing
Why do companies outsource?
o Focus on core business
o Reduce costs
o Increase spend to market
o Foster innovation
o Conserve capital
o Improve work quality
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Form strategic alliance Retain
OUTSOURCEEliminateStra
tegi
c im
port
ance
Contribution to operational performance
High
Low
Low High
Outsourcing decision matrix
When to outsource
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Major global players in offshoring of finance and accounting
Company (HQ location) Locations Offshore revenue
Accenture (US) India, Philippines, Spain, China, Czech Republic, Slovakia, Brazil, Australia
Over US$5 billion
Hewitt Associates (US) India, China, Philippines, Thailand, Malaysia, Czech Republic, Poland, Hungary, Brazil, Mexico, Argentina, Chile
over US$5 billion
IBM (US) India, Czech Republic, China, Australia US$1–5 billion
Tata Consultancy Services (India) India, Hungary, Brazil, Uruguay, China, Chile US$1–5 billion
Wipro (India) India, Canada US$1–5 billion
These firms utilized the outsourcing model and experienced huge benefits
Who is doing it?
Source: CPA Australia
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Who is doing it?
Upt o 2008 2009-12 2013-14
68% 62%53%
23% 28%30%
9% 10% 17%
Large market
Mid market
SMB
Source: FAO annual reports 2015
There is an increase in outsourcing contracts by the SMBs
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Asia Pacific is the top market for Finance & Accounting outsourcing
Top 5 outsourcing destinations in 2015
Bengaluru, India (1)
Manila, Philippines (2)
Mumbai, India (3)
Delhi, India (4)
Chennai, India (5)
Source: June 2015 PM Network Magazine
Top market
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Your worries:
o Do not have the knowledge
o Lack of experience
o Do not have sufficient capital
o Do not have enough time to set up facilities offshore
How can you do it?
Solution:
There are a number of outsourcing firms that partner with small – medium size accounting firms such as yours to offer you the benefits of outsourcing with none of the management or internal worries
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Secure server based solution
1 – SCAN & UPLOADYou scan and upload files to the outsourcing companies secure server
2 – RECEIVEThe outsourcing companies team records all source items into their system and produces your accounts
3 – COMPLETE TASKS & REVIEWWork is completed and reviewed before it is submitted to you
4 – SUBMITFollowing your approval the final working papers are made available to you
Technology behind outsourcing
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1 – INSTALL SOFTWAREOutsourcing company provides you with software to install on your system
2 – REMOTE LOGINUsing this software the outsourcing company remotely logins to your system
3 – COMPLETE TASKS & REVIEWWork is completed and reviewed before it is submitted to you
4 – SUBMITFollowing your approval the final working papers are made available to you
Technology behind outsourcing
Remote access based solution
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o Increased efficiency
o Lower operational costs
o Improve margins
o Save time
o Reduced staff turnover/growth without overheads
Benefits of outsourcing
o Get a competitive advantage
o Acquire flexible resources
o Be compliant
o Access best practices
o Level the playing field
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Before After
Benefits of outsourcing
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Save against current costs for accounting, VAT, bookkeeping and tax.
Grow business without being bogged down with the bookkeeping.
Cover the workload of staff who have left.
Take on more business without the need for costly recruitment or investment in staff.
Benefits that work for you
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o Pre-defined SLAs and KPIs with regular reporting
gives you full control
o Manage the workforce in your own way through a
single-point-of-contact located offshore
o With advances in technology, virtual communication in
the form of face-to-face meetings is possible through
video conference facility?Control
Outsourcing pitfalls
How to avoid:
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oISO 27001:2005 is demonstration of an outsourcing
supplier’s IT security risk-management capabilities
oSuppliers internal processes – if possible visit them
oInternational Private Leased Circuit (IPLC) connectivity?Security &
Confidentiality
Outsourcing pitfalls
How to avoid:
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Security
oISO certification
oRegular ISO audits
oUSB port, CD/DVD ROM disabled
oRestricted printer access on all PCs
oDefined computer access policies
oFirewall for content filtering
o24x7 physical security
Outsourcing companies take extra measures to keep your data safe.
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oEvaluate the company background
oTalk to existing clients
oEvaluate the management team’s experience
oSpend time with the team?Cultural differences
Outsourcing pitfalls
How to avoid:
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oCheck for existing processes
oAre they flexible to integrate with your processes
oProcess certification such as ISO 9001
oReporting mechanism
oFeedback internalisation?Poor quality
output
Outsourcing pitfalls
How to avoid:
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oDeal with an established company
oCheck the companies track record?Financial instability
Outsourcing pitfalls
How to avoid:
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oDo not ship documents overseas
oLook for an end-to-end service provider
oAccess to the scanned documents for back-up?Infrastructure
Outsourcing pitfalls
How to avoid:
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Outsourcing does not mean you have a person working in his bedroom but there are companies with good infrastructure
Infrastructure
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Next room telephony• IPLC leased lines ensure quality
and desk-to-desk telephony with calls charged as local rates.
Group service support• Finance, personnel, HR,
marketing and IT support.
Video conferencing• Virtual communication in the form
of face-to-face meetings is possible through a video conference facility.
Global connectivity• Internet Leased • International Private Leased
Circuits (IPLC) via different trans-world routing.
Infrastructure
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1. Is there a high staff turnover?
2. Is there a high capital cost?
3. Is a process taking up too much of the managements’ time?
4. Is the service not part of your Core operations?
5. Are the technology demands high?
Questions to ask when you consider outsourcing
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What next?
Robotic Process Automation (RPA)
“RPA is the application of technology to automate processes in a company using “robots”. Any company that uses labor on a large scale for general knowledge process work, will boost their capabilities and save money and time with robotic process automation software.
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What next?
Some of the areas where RPA can help organizations improve working capital and enhance productivity and efficiency.
oProcess having structured input source
oRemote management of IT infrastructure
oCustomer service centres handling high call volumes
oData transfer across multiple systems
oData being collated from multiple sources
Source: xchanging.com
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What next?
In Finance and Accounting Outsourcing, RPA is delivering multiple benefits. This will enable companies to improve response time to new markets.
Cost savings Enhanced accuracy
Scalability Increased compliance
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Ravi Kurani, Director, QX LimitedRavi Kurani is an MBA (Finance) from Australia and has over 15 years of experience in the outsourcing industry. He works closely with companies in the UK/USA to assist them to define their India strategy, to achieve efficiencies in the UK/USA and has responsibility for transition and implementation of QX services. He is a COPC ® certified professional.
Back Office & BPO Expertise (US & UK)
• Phone, Email & Chat Support for
Two Largest Online Retailer (USA)
BNY Mellon Bank (USA)
DishTV
Deliverables & Achievements
• Handling of over 1M emails and over 500,000 Inbound calls annually for two of the largest online retailers
• Handling of over 3.8M transactions for one of the USA largest bank (BNY Mellon Bank)
• Handling of over 100,000 inbound customer calls for DishTV towards order confirmation and cross selling of products
Team and experience
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Contact us248 Lorraine Avenue
3rd floor, Room 11Upper Montclair
NJ - 07043Tel: 1-800-310-9312
Email: [email protected]
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