The Good and the Bad of Outsourcing for Small Business

Business outsourcing is the term used by Brisbane bookkeepers and the entire business industry to refer to the allocation of business processes to outside entities. The system of distributing specific office and business tasks to outside contractors and companies is fast becoming the norm. Anything from manufacturing, IT services, legal and bookkeeping services, customer support, and logistics are often relegated to outside workers.

The changing concept of business offices practically dissolved the office walls. With the power of the internet, advanced communications programs and platforms, and advanced technological gadgetry, it is now possible to share, communicate, and send documents, presentations, databanks, and projects from anywhere around the world, as if you are in the same room.

Most Commonly Outsourced Services

There are a hundred and one tasks to be done in every business enterprise. Some of these tasks are the core activities of the business, which usually are also the money-earning processes. And then many of these tasks are the peripheral activities that support the core processes. These tasks do not necessarily earn money, but are necessities to run a business. The following peripheral tasks are the ones that are usually outsourced;

Ø  Office Janitorial Services

Ø  Office and Warehouse Security

Ø  Customer Service Representation

Ø  Billings and Collection

Ø  Bookkeeping and Auditing

Ø  Sales

Ø  Advertising and Promotions

Ø  Legal Services

Due to the advent of online commerce, most businesses recognize the importance of internet marketing. Thus, the need for online workers that include;

Ø  SEO Experts

Ø  Website Content Writers

Ø  Web Designers

Ø  Online Marketers

Ø  Virtual Assistants

Advantages of Outsourcing Business Processes

Outsourcing offers a lot of benefits, both to individual workers and businesses. It is often regarded as an efficient way of pooling skilled and talented manpower to work on specialized business tasks. Advantages of outsourcing include;

  1. Cost Effective – You get the job done without hiring experts or training people. Instead of keeping an in-house auditing staff that will only work for several weeks or months a year, it is more feasible to outsource services for accounting, auditing, and bookkeeping in Brisbane.
  2. Focus on Competencies – A common option for small businesses who cannot afford to hire experts on every field or task is to delegate several tasks to one employee. Your billing officer might also function as customer service representative and secretary. This process might save you on payroll, but your employee’s productivity is likely to decrease.
  3. Expertise Value – By outsourcing business processes, you are assured of getting the best services as you are relegating the task to people who are experts in that field. Assembling and training an adequate IT department will cost a lot. By outsourcing your programming needs, you are getting the best programmers, without the extensive expense.
  4. Staffing Control – Some businesses have crazy months where you need to hire double in order to accommodate increased demands, and then lean months where you have to layoff half of your workers. Constant hiring and layoffs will cost you money. You have to maintain an extensive human resource and training departments, which are both cost centers.

Drawbacks of Business Outsourcing

Outsourcing also has its disadvantages. For one, some jobs are not fit to be outsourced. You might be able to find business solutions to some of your needs, but for the others, you have to keep it the work within the company. Here are some disadvantages with outsourcing business processes;

  1. Confidentiality and Privacy Threat – In the course of delegating the tasks, you are obligated to share and provide sensitive company data, which are better entrusted to people you personally know. Electronic transfer of information also leaves footprints, making files and documents prone to hackers and other online threats.
  2. Decreased Managerial Control – Outsourced business providers and contractors are your business partners, not employees. Thus, you have less managerial over them. Their performance and work are largely based on what you have agreed upon. Although they might consider your instructions, they are also experts on their own right, and would follow the standards and rules of their field. You can hardly instruct a web designer to do their job as you can your personal secretary. Nor can you dictate Brisbane bookkeepers on how to keep books as they follow established accounting and bookkeeping standards.
  3. Dependence – Outsourcing also entails transferring some of your operational risks to the contractor, but you are acquiring some too. When you entrust business tasks to a contractor, you are relying on their business solidity, good-standing, integrity, and good faith.
  4. Divided Loyalty – Contractors usually work with several clients. They could very well be working with your competitors of the same industry, thus loyalty can be an issue. Contractors could be bound from leaking information, but there are other ways they can sabotage your operations, like failure or late compliance of their tasks.

To get the best of business outsourcing, you first need to determine the right tasks and business operations that are appropriate for outsourcing. Secondly, you have to know how to organize your work with several contractors. Third, it is important to know how to properly screen contractors. Brisbane bookkeepers and accountants have worked with businesses and contractors alike and they can help you determine your outsourcing needs and how to best resolve them.