Tag Archives | outsourcing

When to Outsource or Why Outsource at All?

As a financial leader of your organization, it’s important that you understand how your time works and what you are spending your time on. In today’s blog, we’re taking a look at when to outsource accounting or specific tasks and services and why outsource at all. Before we go into when, first, let’s understand, what is outsourcing? Many of you have heard the term, but don’t really know what it means.

Outsourcing is simply delegating and paying someone outside of your organization to do a service for you that you cannot do or do not have time to do.

Examining Your Daily Routines

For example, think about your daily routines. Think about what you currently do. The list may add up quickly if you’re like me and wear many hats.

Put a star next to the things that you struggle to find time to do in the first place.

In your personal lives, it could be mowing the lawn or changing your car’s oil or cooking yourself.

For example, I find myself as a business owner operating a franchise struggling to find time to really prep and cook dinner each night. So what we do often is go out and pick up food – essentially paying someone to cook our food for us. We could either dine there or take it home.

Time Value

It’s all about time value. Are you spending your time on what you or your company values most?

When examining your daily routines, do you catch yourself saying “I don’t have time…”?

“I don’t have time to mow the lawn.”

“There’s no time to clean my house.”

“I don’t have time to close the books because I’m out there running my business.”

Whatever those time consuming tasks are, it may be worth outsourcing to another person or agency. 

By freeing up your time as a CFO, you can reallocate that time to more important tasks – such as being your CEO’s trusted advisor. Learn how to become the trusted advisor your CEO needs.

When to Outsource Accounting

For example, you might have to hire a bookkeeper in your organization for them to come out and enter the transactions on a daily basis. For me, that’s important to outsource because I need to be thinking at a higher level as a Controller/CFO – not entering transactions. There will always be someone less expensive to do that. 

So really when we say we don’t have time, it is because of one of several reasons. We don’t want to spend our time on something else if someone else can do it for cheaper (and if it energizes them more). Plus, it may be time to start outsourcing accounting when you want to:

  • Make more money for you
  • Bring you more value
  • Do what you enjoy doing more

For example, entering transactions for month close is dry work and it wears on me. But I love coaching leaders how to be more effective in their roles and make their decisions more impactful. If I’m bombarded with transactions, I cannot coach leaders – which is more valuable to me and the bottom line.

On a personal note, when I do not have to cook dinner, I have an opportunity to spend more time with my kids. It also frees up my time to help my kids with homework and build memories with them. I can also read a book for personal growth or enjoyment. There’s so many opportunities out there for you to actually do things that you actually enjoy. 

Outsourcing accounting is just one area where you may add value to your company. Continue to do things that add value or free up your time so that you may add value. Click here to download our guide on how to be a trusted advisor to your CEO to help them improve your company’s value.

When to Outsource, When to Outsource Accounting, Why Outsource

Why Outsource At All

One of the top reasons why companies outsource at all is that they may be more efficient. When I outsource, I am hiring someone that might be more knowledgeable. If I am a business owner who does not know how to record certain transactions, then consider the time it will take to learn that skill (and the time you are not spending on improving profits and cash flow). Even if you wanted to implement Quickbooks so that you can start recording transactions (a one-time set up), it may be worth handing that off to someone more knowledgeable in Quickbooks so that you can focus on other things you are more knowledgeable in. 

Those are things you consider when to start outsourcing.

The goal is to create more time, more energy, and free you up to do something that can potentially make you more money.

Examples When Considering Outsourcing

To further explain the need to outsource, it’s important to consider roles outside of the accounting and finance departments.

If you are a good sales person for your organization, then you don’t want to spend your time behind a desk all day trying to enter your transactions. If you don’t have a lot of transactions, then that’s a perfect sign that you need to get out there and start making those sales for increased transactions for your business to actually record.

Outsourcing is a Key to Growing

I think that outsourcing is a key to growing. It is no different from a leader wanting to delegate the tasks that…

  • You just don’t have any time to do
  • You need others to do so that you can focus on what you are great at doing from a very high level

Now, at The Strategic CFO, we have several ways for you to tap into or start outsourcing individuals so that you can actually build on your business.

Consulting

We have accounting managers, controllers, and CFOs that are ready to deploy and add real value where it’s not currently being optimized. In our consulting practice, we work in several capacities, whether it be an Interim CFO role, financial and operational reporting, mergers and acquisitions, pre-audit preparation, etc. Click here to learn more about our consulting practice.

For example, your accounting manager, controller, or CFO may

  • Not exist yet (brand new hire)
  • Be on maternity leave
  • Take 3 months off to travel through Europe (I wish!)
  • Need extra help because your company is going through an audit for the very first time

Life happens regardless of what you plan for. That’s why we’re here to step in when you need it. We will come in and help you with getting the helping hand you need to be more efficient with your current team. Need hiring and training? We do that too. These are all different reasons why you may need to outsource. We are here as a boutique firm to help you.

When to Outsource, When to Outsource Accounting, Why Outsource

Coaching Workshops

There are also opportunities for you to come in and take workshops at our office, in an online setting, or at your office. For example, you can learn about what your leadership style is. Are you a Type A person that can’t just let go of doing the little tasks? By learning about yourself, you start to outsource or delegate what you are not strong at and focus on what you are great at. As a result, you can continue to grow the business.

We offer a variety of workshops to…

Your CEO needs an advisor they can trust. Learn what they expect from their CFO and how to become the trusted advisor your CEO needs in this whitepaper.

When to Outsource, When to Outsource Accounting, Why Outsource

When to Outsource, When to Outsource Accounting, Why Outsource

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Outsource Definition

See Also:
Administration Expenses

Outsource Definition

The outsource definition is the practice of transferring business activities to an external organization instead of performing the activities internally.

Outsourcing Criteria

Companies may outsource business activities if they feel an external organization can perform the activities better or at a lower cast than if the company were to perform the activities itself. Outsourcing typically involves a contract between the company and the external organization that stipulates the costs, quality standards, and other conditions regarding the performance of the business activity.


Click here to download: The Guide to Outsourcing Your Bookkeeping & Accounting for SMBs


Insourcing

The decision to outsource instead of insource depends on the nature of the business. Typically, companies want to focus on their core business activities and outsource peripheral activities. Value chain analysis may help a company discover which activities to perform internally and which to consider outsourcing.

Activities that are commonly outsourced include bookkeeping, legal services, transportation, security, and other business activities. When deciding whether to outsource an activity or perform the activity internally, it is necessary to consider the advantages and disadvantages of outsourcing.

Outsourcing vs Insourcing

It may be advantageous to outsource an activity if doing so is cheaper than performing the activity internally. It may also be useful if the external organization has superior expertise in the activity. Outsourcing also allows a company to focus its attention on its core business activities.

There are also disadvantages to outsourcing. Outsourcing customer service operations may cause customers to feel disaffected when they find out they are not dealing with the company they are trying to reach. Also, if the external organization has access to sensitive information, then there may be a risk of information leaking to competitors or other parties. Outsourcing certain operational activities may cause the company to give up valuable customer data used for marketing purposes. And finally, outsourcing may require the company to incur the costs of monitoring and auditing the performance of the external organization.

Outsourcing Overseas

In today’s global economy, more and more companies are outsourcing business activities to external operations in other countries. Labor and operational costs may be significantly lower than in the company’s home country.

Guide to Outsourcing Your Business's Bookkeeping and Accounting


Before you decide to outsource, determine what your core competencies are. Check out our free Internal Analysis whitepaper to assist your leadership decisions and create the roadmap for your company’s success!

Outsource Definition
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Outsource Definition

Originally posted by Jim Wilkinson on July 24, 2013. 

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Outsourced Workers: Do You Need More Hats or More People?

Outsourcing is something that has always existed, but has seemed to become the “norm” for most companies. outsourced workersRightly so, outsourced workers are an easy solution for financial leaders to mitigate costs.

The big question we’re asking is: Do You Need More Hats or More People?

If you’re looking at outsourcing, the first step is to complete an internal analysis to study your strengths and weaknesses. Need guidance in conducting an internal analysis? Download the free Internal Analysis Worksheet now. 

This is our third and final blog of our “are you wearing too many hats?” blog series. Initially, we started with the concept of having “too many hats“… meaning you as a financial leader have been given additional roles that go outside of what you thought you signed up for.

In our last blog, we discussed how millennials transition our CFO roles from traditional “CFO hats” using more innovative tactics. We also analyzed how technology may be able to help you complete the unfinished tasks in your company.

CFOs are currently struggling because of their many hats. What do you do when the weight of responsibility is too much?

Our Answer is Delegation

I recently moderated a Q & A panel of three CFOs, and heard very different answers from all three when discussing how to handle their “too many hats.” An interesting response was delegation, and handling too many tasks. How do you delegate these tasks, and who do you delegate them to?

One solution is outsourcing.

How Technology Connects You to Outsourced Workers

As discussed in our last blog, technology impacts a company by relieving some of the responsibilities on individuals.  Routine tasks can often be performed by computers, freeing up workers to spend their time on more value-added tasks.

Due to cloud computing and improved applications, outsourcing your work is a lot easier and cheaper. 

How Much Does Outsourcing Save You?

I know what you’re thinking… “Why don’t we just polish what we’re lacking on and allocate our budget to that?”

Some projects are more costly than others. For perspective, let’s say you were starting a new company and needed to design the website. The costs of hiring programmers and engineers in house would be tens, maybe hundreds of thousands of dollars. Compare this to a few thousand you can pay to workers outside of your company.

When starting your own company, you should also consider outsourcing projects that you are unfamiliar with. Although it is important to learn all aspects of a company, you don’t need to do it all at once. Having outsourced workers saves you money and time and provides expertise that you may currently lack.

In my own company, we outsource a lot of projects nationally and internationally (particularly with the one-time deals). We even outsource the projects to other companies, not just freelanced workers. Because our current staff is not as familiar with graphic design, we hire freelancers to do our designs and white-papers. We come up with the content, however, which reflects how employees provide the value-added information in a company.

What Should You Outsource?

We want to make sure that the tasks we delegate are the tasks that don’t necessarily make us money. What does that mean? Here are a few that we recommend you consider outsourcing:

A better question would be, what can you not outsource?


Click here to download: The Guide to Outsourcing Your Bookkeeping & Accounting for SMBs


The Risks of Outsourcing

Although outsourcing is a great solution to get rid of some of your hats, you may want to be wary of what you assign…

Value-Added versus Non-Value-Added Tasks

Often, we have to decide which tasks are more important than others. Even within the office, you have to choose which tasks to hand off to other trusted employees, and which tasks you need to complete yourself.

Typically, you would choose the value-added tasks because you, as a financial leader, are meant to add value to the company. You don’t want to assign important tasks to freelancers or offshore outsourced employees, because (presumably) no one does it as well as you do. Which brings me to my next point…

Do you find yourself gradually outsourcing more tasks for your company, rather than handling them yourself? Download this free Internal Analysis white-paper to find out why.

Laziness to Learn

So you’ve got a good set of employees, as well as outsourced workers. The budget is comfortable and your company is running smoothly. No one wants to change a system if it’s working fine, right?

Wrong.

As a CFO or financial leader, you are meant to be the wingman to the CEO of your company. The company should always seek to grow and adapt to new systems and technologies the business world has to offer. Remember that outsourcing is only meant to take some weight off of your head, not take all of your hats away completely!

The point of outsourcing is to take hats off. If you find that you are outsourcing any of your core competencies, it’s time to conduct an internal analysis.

Cyber-Security Issues

Keep in mind, whoever you outsource your tasks to will need access to some of your company’s information such as passwords, financial account information, etc. There are often cyber-security issues that occur, putting hundreds or thousands of people’s information at risk.

When deciding what information to release to your outsourced parties, the first priority you should protect is the financial information – your company’s and your customer’s information. If you can, avoid giving third party companies access to any financial information. Most platforms allow you to create “moderator,” “contributor,” “editor,” or any other variation that is other than “administrator.”

Government Regulation

Outsourcing government-regulated tasks can be a little tricky, particularly with countries that do not have the same regulations. This issue is industry-specific. Some examples would be insurance, medical, and financial services.

Cultural Barriers

When you outsource to workers who have a language barrier, time difference, or just a generally different way of handling projects, it may be a bit more difficult to execute a task. Companies have to be cautious for the sake of time, because one cannot hand a project to an outsourced worker who needs training constantly.

This is where adaptation comes in… In our company, we freelance our graphics to outsourced workers in the Philippines. We have to prepare our instructions and content a week, sometimes two, in advance. Why? Because of the time difference and the resources available to our contracted worker. We want to make sure his needs are accommodated as well as our own, and we adapted to his way of doing business.

Conclusion of Having “Too Many Hats”

There are always risks in trying new things in your company – in adapting to new business systems and technologies. In this three-part series of “wearing too many hats as a CFO“, we explored solutions such as millennial tactics, technology, and outsourcing.

The drive of a millennial + experience of older generations = success in your company.

Adaptability is key – Technology is created to help you.

Outsourcing can lessen the number of “hats” you wear as a CFO.

Regardless of the functions that you decide to outsource, conducting an internal analysis will help confirm your core competencies and identify areas that could easily be outsourced. Download your free Internal Analysis worksheet to start developing and enhancing your strengths as well as start reducing and resolving your weaknesses.

outsourced workers

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