| With the advent of globalization, vastly increased | | | | Companies are increasingly resorting to outsourcing |
| availability of bandwidth at rock-bottom rates and | | | | the finance and accounting function to BPO firms |
| wage differences at various locations across the | | | | located overseas. Preferred destinations are India, |
| globe, firms are increasingly resorting to Business | | | | Ireland and countries in Eastern Europe. The finance |
| Process Outsourcing, or BPO. This allows firms to | | | | and accounting function is concerned with the |
| focus on their core business activities and strategic | | | | acquisition and use of funds by the business. These |
| functions that are the revenue drivers. Non-strategic | | | | needs cannot be postponed or put on hold. Any errors |
| functions and business processes are outsourced | | | | in this department can have disastrous consequences |
| from an outside partner. These could include customer | | | | for the entire firm. It is, therefore, of prime importance |
| support, invoicing and claims processing. | | | | that the outsourcing is carefully planned and executed |
| Strategic Outsourcing: | | | | and lower costs quoted by a provider are not the sole |
| Considered at the strategic level, outsourcing | | | | criteria for selection.o Advantages - Outsourcing of this |
| essentially involves the transfer of control of a product | | | | function can accrue substantial savings for businesses. |
| or a process to a supplier who may provide the | | | | A separate accounting division may not be necessary |
| service either at the same location or remotely, | | | | with consequent savings in recruiting, training and labor |
| whichever is most cost effective. In strategic | | | | costs. The outsourcing firm with specialized expertise |
| outsourcing an entire service, product or product line | | | | and technology can help you improve the processes.o |
| may be handed over to the supplier for strategic value. | | | | Services Available - Services that can typically be |
| By its very nature, strategic outsourcing yields best | | | | outsourced include bookkeeping, audits, preparation of |
| results by outsourcing to a provider who adds value to | | | | financial statements, ledger maintenance, payroll |
| the company's core business processes.o Benefits - It | | | | processing, training of accounts staff and software |
| is now well established that strategic outsourcing yields | | | | assistance, to name a few. These are essentially low |
| many tangible and intangible benefits to a business. It | | | | value adding activities and eminently suited for |
| yields many competitive strategic benefits, lowering | | | | outsourcing. |
| manpower costs, freeing up internal processes and | | | | BPO is being accepted increasingly as an effective |
| ease of management.o Concerns - The strategic | | | | management tool enabling businesses to take |
| outsourcing decision makes sense only if it brings | | | | advantage of labor arbitrage. It enables firms to |
| tangible business benefits to the firm. If not properly | | | | access specialized services and latest technologies at |
| planned, outsourcing could well result in lowered | | | | competitive costs. It cuts on transaction times by |
| customer satisfaction levels, decreased quality, | | | | leveraging the different time zones across the globe. |
| delayed deliveries, theft of intellectual property or | | | | Firms must include this aspect in their strategic planning |
| customer information and increased costs for the firm. | | | | to maximize the gains. |
| Outsourcing Finance and Accounting Services | | | | |