Myths and Realities : Outsourcing Bookkeeping Functions

Outsourcing today has evolved as a powerful tool which aids in the transformation of any conceivable business operation. However, there are a few myths still present when one considers the different aspects while outsourcing bookkeeping jobs to a specialist company. But the reality has dawned, even though late, that it is absolutely viable for small businesses too and presents tremendous possibilities in terms of cost saving as well as business strategies.

Myth : Only big corporate houses can afford to Outsource.

Outsourcing the bookkeeping functions used to be the prerogative of big business houses. With the winds of change sweeping the world, small business too have joined the fray and are outsourcing their bookkeeping functions in order to acquire increased efficiency and profitability in their respective business domains. Companies with a full-time bookkeeper can save about $30,000 a year by availing bookkeeping services of highly competent and competitive service providers in India. By outsourcing non-core business activities like Bookkeeping to destinations like India, China and Philippines, small business organizations .In the developed nations like the US and countries in Europe can save substantially by taking advantage of the difference in the foreign exchange rates.

Myth : Bookkeeping Outsourcing is not reliable.

No offshore service provider would risk their business prospects by unauthorized use of accounting data of the client company. Using secure FTP soft wares, offshore companies send the documents securely into the client server. Using customer-specified soft wares the firm finishes the assigned tasks and send the accounting files back to the customer's server securely. The clients then import the accounting files into their accounting soft ware. Thus the possibility of any breach of data security is ruled out.

Myth : Complex IT integration is essential.

It’s just a misconception that outsourcing requires complex IT integration. But just a server and internet connection will suffice. The service provider can use Remote Server
model to access client’s computer to perform activities like Bookkeeping, Tax Returns,
Account reconciliation etc. In the Secure File Transfer mode, all the accounting records are transferred securely from the client’s computer to the vendor’s. The trend has risen sharply and more and more companies are increasingly outsourcing accounting jobs and the sector is growing rapidly. An IDC study has predicted that the global market for bookkeeping outsourcing services, which crossed $30 billion in 2003, will touch $47.6 billion in 2009.

Myth : Bookkeeping when outsourced, induces job cuts and in the process harms the economy.

Small businesses, by outsourcing their bookkeeping functions, are witnessing an increase in their business returns and less processing time. Everyone, from the manufacturer to the customer and the governments accrue significant benefits. This is particularly more relevant for small businesses, since by resorting to outsourcing, they too can save money without compromising on the quality side. This benefit can be channeled for the purpose of hiring people needed in other operational areas to increase their production and sales. Ultimately, there is no significant loss of employment opportunities. (Vish)

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