subject: Accounting Outsourcing to Foreign Countries [print this page] Accounting Outsourcing to Foreign Countries
Globalization has largely affected accounting practices in the United States. As accounting principles have become globally practiced it opens up opportunities for businesses and firms to enlist the help of foreign countries. Outsourcing is used to send non-skill intensive work to other countries to be done for a small fraction of what it would normally cost. Now that accounting has globalized, businesses and firms have been taking advantage of outsourcing.
Businesses across the country now see the advantages of outsourcing accounting to a foreign country. Accounting plays a vital role in sustaining a business. By outsourcing to countries such as India for a fraction of the cost it can save companies money as well as time. Companies are eliminating the need to take care of non-core components of the business such as; bookkeeping, invoicing, balance sheets, trial balances, profit and loss accounts, and much more. By doing so the business can use the time and money they save by not doing low-end time consuming work to focus on more important accounting aspects such as advising their clients and financial analysis.
Businesses might believe putting such responsibility in people who they have never met could be harmful to the company, but the fact is that the top outsourcing companies train their employees with programs provided by US CPA's to give businesses reliable results. Certain outsourcing companies might focus only on one aspect of accounting such as bookkeeping, so by having these companies manage your books you gain a competitive advantage against other businesses who must focus on all aspects of accounting. Whether your firm or business is large or small outsourcing can save payroll, overhead cost, and frees a large amount of needed time.
Outsourcing accounting could allow your company to focus on core business, get skilled staff for low rates, improve the timeliness and service, and help your business grow. For all of this to happen the business must be knowledgeable of the company they are outsourcing to and test the waters before fully committing to them. By slowly integrating their workload to the outsourcing company the business or firm can get an idea of the service provided by them. If the company can provide quality results in a timely manner they prove they are worthy of taking on the businesses full workload.
Accounting outsourcing took off in the early 1990's and has grown substantially since then. Studies show that in the past year Finance and Accounting Outsourcing also known as FAO has grown by eleven percent. This brings the total annual outsourcing contract value up to $3.1 billion dollars out of the estimated $24 billion dollar global contract value. In the past year outsourcing helped many businesses experience large growths, but five of the top companies who moved forward the most were Genpact, IBM, Infosys BPO, Wipro, and WNS.
As advantageous as outsourcing sounds some companies have experienced problems and setbacks that can be devastating to their business. When choosing an outsourcing company you should not hire them solely because they have the lowest rates. Each outsourcing company is relatively cheap, so do some research and find the one that provides the best results while still saving money. The main causes of problems businesses face while outsourcing come from an unclear scope of the project, differences in their cultures, problems communicating with them, hidden costs related to outsourcing, and staying in line with both government's laws. So while outsourcing may be vital for some businesses success it is not for everyone. Without taking the precautions I have listed in this article outsourcing can quickly turn into a burden.
