Outsource Bookkeeping Services
Do you know by doing Outsource Bookkeeping Services what benefits you will get, read this blog post, and get an idea.
Outsource vs offshoring for bookkeeping services
With changing business dynamics over the years, the way businesses function has also changed. A lot of multinational companies choose the option to focus on their core work and try to lighten the rest of their work. Generally, a company has two options for this purpose; outsourcing and offshoring. These two terms are much alike but contain some base differences.
What is outsourcing?
Outsourcing is the process where a business offloads some of its responsibilities to a third party who does not have any association with the business directly, i.e. the service of outsourcing accounting activity to an individual accountant or accounting firm. One can do outsourcing in the same country where a business operates or in another country as well.
What is offshoring?
Offshoring is the process where a business establishes its own business unit or set-up in another country in order to take various benefits. Such benefits include cost-effectiveness, law labor, availability of manpower, etc. A U.S based business setting up a unit for its business process in a developing nation is the best example of offshoring. The team that a company establishes in another country works only for that company, unlike outsourcing.
Why is offshoring increasing nowadays?
There are various factors that affect the decision-making process of business to go after offshoring. Some of their business activities, which are as follows:
Many times, maintaining a certain business activity in the home country becomes very expensive. Thus, by opting for offshoring such activities in another country can prove to be cost effective. A company can save a lot of money by choosing the right country to offshore its activities; developing nations are generally the best option for this purpose.
Skilled manpower in developing nations:
Offshoring business activities to a developing nation like India would not only benefit a company in cost but also in terms of skilled manpower. Developing nations are the best source for brushing skills and less expensive manpower.
- Connectivity technology:
The hurdles of connectivity between two countries no longer exist, and thus a company can easily choose to offshore its business process to another country. There are various techniques such as Skype, Google Duo, etc. which makes the process of offshoring easy to monitor.
Cloud bookkeeping software:
Different counties have a different set of people having unique mindsets and abilities. That thing ultimately improves the quality and output of a business. Thus, a firm gets an advantageous position if a company chooses an offshoring nation wisely to grow the business.
Use of software:
The usage and reach of advanced software have increased in recent years. There is various software that helps a business to get connected to its branches regardless of place limitation. Software such as Asana and Karbon HQ are helpful for tracking the performance and growth of businesses.
Mobile technology and speed of data:
With 4G already in wide usage and 5G on the way, connecting to offices in different countries has become a touch away. With advanced and digital mobile technology and high-speed data, the connectivity limitation gets eliminated and offshoring becomes easy to manage.
With advanced accounting tools, accounting activity has become easier. A business can overlook and monitor all of its accounting activities in real time with the usage of software such as Xero, QuickBooks and more. It lets the businesses excess the data anywhere and anytime, making the process real-time.
Increase in e-contracts:
Goes are the times when a company has to copy and sign bulky contacts. With digitalization, e-contacts has gained great popularity. From small-scale business to multinational companies, e-contracts are widely used and make the physical necessity of contracts void. Thus, a business can sign and agree on contracts for its offshoring businesses with great ease through simple modes like emails.
Accounting becoming a commodity:
With the digital revolution and advanced technology, accounting has become more automatic and rapid. It has made the accounting procedure simpler and has commoditized it and thus benefiting the firms to save their cost.
Global laws: Laws in various countries are different:
Some are strict in favor of the corporate world. This makes many companies attracted to countries that have liberal or less stringent laws so they can have an advantageous position for their business.
Accounting as a reporting tool:
Accounting activity is no more the traditional activity of maintaining books of accounts, it has become more vivid with passing time. Companies around the globe see accounting activity as a tool for financial reporting and based on that they make important business decisions. In short, accounting activity is much more about the growth than the cliché of keeping accounts in place.
These changes and improvements have encouraged companies to offshore their business activities.