Outsourcing non-core business activities has long been leveraged by businesses to improve their operations. Accounting is one of the most outsourced tasks. A report by Grand View Research revealed that the global accounting outsourcing market is estimated to grow at a CAGR of 9.3% from 2024 to 2030. The market has expanded notably through the years as there is a constant increase in the demand for reliable and cost-efficient services. However, while there are pros to offshore outsourcing, it is also best to know and consider the cons of this proposition.
At Staff Domain, we understand that offshore outsourcing is a significant investment for your business. We listed the pros and cons of offshore outsourcing for your business to help you make well-informed decisions.
Offshore outsourcing has numerous advantages for businesses looking to enhance efficiency and reduce operational costs. These advantages drive growth, innovation, and competitive advantage for your business.
Offshore outsourcing allows you to make better use of your resources. This lets you focus on consultative work while your offshore team fulfils the leg work. To help you know more about this, we have an extensive discussion on expanded capacity. You can read it here.
One sector that most companies outsource is accounting. Outsourcing accounting services provides increased capacity and improved operational efficiency and flexibility. You can refocus your internal resources on more strategic activities by outsourcing basic accounting tasks to qualified specialists in offshore locations.
According to SMB Guide, 59 per cent of companies use offshore outsourcing services to cut costs. These savings include lower costs for production, labour, infrastructure, and administrative overhead. Such strategic migration enables firms to more efficiently utilise financial resources, thus increasing profitability and fostering long-term competitiveness on a global scale.
Outsourcing accounting services allows businesses to have a dedicated team of experts to complete specialised functions — and their focus is solely on that. Tasks can be fulfilled faster and more accurately, which results in improved customer experiences.
No outsourcing partnership is perfect. However, with constant communication, proper planning, and an established process, you can reap the benefits. The following are some of the most common challenges you can encounter in a partnership:
A good outsource provider will have stringent policies and procedures in place to protect data. Before outsourcing, you must have strict, clear policies and procedures on what your outsourced staff can and cannot do with company client information.
Another way to protect client data is to put restrictions on computer usage. In the case of Staff Domain, staff were given office computers, and no personal devices were to be used. In cases where this is not an option, a personal computer should only be used through a secure server or a secure remote desktop connection. This way, you, as the employer, maintain all the security controls and data in your own environment. Two-factor authentication should also be established every time remote access is commenced.
There is a perceived notion that when you outsource, you lose some control over the processes that take place. This shift in control dynamics is due to the physical and logistical distance between the parent firm and the offshore service provider. While this is a genuine concern, good governance frameworks and strong communication channels can help to reduce these issues. Implementing extensive monitoring systems and developing transparent communication tactics are critical for retaining accountability and ensuring alignment with business goals throughout the outsourcing process.
This idea is a misconception, and one that can be easily addressed. Setting key performance indicators (KPIs) and service level agreements (SLAs), developing processes, and holding regular catch-up meetings with your offshore team help ensure your outsourced staff are fulfilling their tasks efficiently. Work with an outsource provider that is completely transparent with their processes and policies. Be just as transparent with your own processes and policies to ensure the success of your outsourcing partnership.
At the end of the day, each business has its own unique needs, and a customised outsourcing solution can help you maximise its benefits and address the challenges of working with outsourced accountants.
By selecting Staff Domain as your outsourcing partner and implementing robust management practices, you can optimise your operations, maintain high service quality, and achieve strategic objectives. Embrace a customised approach to outsourcing with Staff Domain today.
Staff Domain‘s offshore outsourcing solutions connect your business to a highly experienced global talent pool for game-changing results. Effortlessly manage your offshore workforce with our comprehensive compliance, payroll, and HR support, and benefit from fixed, transparent pricing in your local currency. Contact us today or schedule a meeting with our sales team to quickly source the right offshore team for your business.
To reduce risks, businesses should conduct extensive due diligence when hiring offshore partners, establish clear communication routes and performance benchmarks, build strong governance frameworks, and assure legal and regulatory compliance. Regular monitoring and reviews of outsourcing deals are also required to ensure openness and accountability.
Offshore outsourcing can help businesses grow by reducing costs, boosting operational efficiency, and gaining access to specialised skills and experience. It also shortens product and service development cycles and stimulates creativity through cooperation with global teams.
Current offshore outsourcing trends include increased use of cloud-based technologies for remote collaboration, and increased demand for cybersecurity measures to protect data across borders. Additionally, hybrid outsourcing models that combine onshore and offshore resources are emerging to improve performance and reduce risks.
Outsourcing can improve service quality by harnessing the experience and specialised talents in foreign markets. However, ensuring consistent service quality may necessitate tight performance monitoring, adherence to SLAs, and good communication between the outsourcing firm and the offshore provider.
Companies may improve outsourcing relationships by setting mutual goals and expectations, offering regular feedback, and encouraging a collaborative mindset across onshore and offshore personnel. Continuous performance evaluation, process improvement, and strategic alignment with business objectives enable long-term success and enhance the value of offshore outsourcing initiatives.
Share this post
Subscribe for the latest trends, best practices, and strategies for global teams
