Benefits of Outsourcing in 2021

Hiring shortages and budget cuts have been at the forefront of the minds of small business owners and human resources managers over the past year. By 2030, all baby boomers will be age 65 or older, meaning younger, less-skilled professionals will be left to fill in the labor gaps. Budget concerns are also looming large as many industries are still struggling to recover from the COVID-19 market collapse.

As a result, the U.S. economy has seen a sharp uptick in outsourcing across industries. In five years’ time, the global outsourcing market will be worth over $425 billion. As 2021 slowly draws to a close, there’s no time like the present to take advantage of outsourcing trends, from call centers to IT support.

Why are Companies Outsourcing?

In the 2018 Global Outsourcing Survey, Deloitte found that companies are embracing outsourcing more now than ever before, but for a different reason. Cost savings, once a popular driver, dropped out of the top five reasons.

Company leaders are now realizing that outsourcing can help them “deliver competitive advantage by transforming the way” they “operate, and making them more agile, efficient, and effective.” This realization is seen in that 84% of companies surveyed are either discussing or have implemented some type of outsourced solution.

Top 5 Benefits of Outsourcing

If you’re like most executive leaders you’re looking to improve performance (62% of respondents), reduce errors (53%), streamline existing processes (52%), gain access to new technology ideas and innovation (51%), and lower costs (44%). Outsourced accounting is uniquely able to provide value in all of the above-mentioned areas.

1. Outsourcing Improves Performance

By hiring an outside accounting professional you have the option to select someone with a proven track record for success. You can hire a professional who isn’t just an accountant, but one that specializes in what your business needs at any particular moment in time whether that be assistance with tax issues, mergers, streamlining processes, or improving your internal reporting package.

2. Outsourcing Reduces Errors

Much for the same reasons as with improved performance, working with an outsourced accounting team will result in fewer errors. Outsourced accountants are up to date in their industry and can harness all available resources and technology to ensure there are as few manual processes as possible. Data entry will be a thing of the past. With no doubt experience in many companies similar to yours, an outsourced accountant will know the pitfalls and common areas of misstep and be able to pay close attention to those.

3. Streamline Processes with Outsourcing

Process improvement is the number one consulting service provided by Szweda Consulting, a bookkeeping service for small businesses. From experience with many similar companies, an outside accounting firm will know best practices, typical workflows, and be able to review your current processes with the goal of making them more efficient and designing them to safeguard against abuse. Going through a process improvement consulting project results in time saved, money saved, and generally increases employee buy-in and satisfaction.

4. Outsourcing Has Access New Innovation

Outside accounting firms have opportunities to test new software and interact with even more software among their various clients. This helps them determine which technology works best, which technologies integrate best together, and allows them to make recommendations that will meet your needs. You now can receive innovative advice from an accountant partner instead of a tech company salesperson who isn’t an accountant or business owner. An accountant can also think ahead to the needs of your business is likely to have in the future, and anticipate how different technologies will meet those future needs.

5. Outsourcing Lowers Costs

As an added benefit you get to cut your operating costs. This is beneficial to a small business as they can access a CFO level professional at a fraction of the cost. Many small businesses, especially seasonal operations, cannot afford to pay a $150,000+ salary, but engaging in a pay for what you use scheme is feasible. Even if you could foot the bill, outsourcing a function saves the company money in the areas of employer payroll taxes, worker’s compensation insurance, and benefit packages.