Knowing the Efficiency of Outsourcing as a Business Strategy

Running a company isn’t easy, but there are ways to make it more manageable. One helpful method is using outsourcing as a business strategy. 

For context, outsourcing means hiring outside experts, or external service providers, to do some of the work that your team might not have the time or skills to handle.   

In this blog, we'll talk about why offshore outsourcing is an effective way to improve your business operations and why companies are using it. 

READ: CFO Outsourcing vs CFO Support Outsourcing: Main Differences 

Outsourcing as a Business Strategy

In recent years, the accounting industry has been facing a significant talent shortage. In fact, a 2023 report by the American Institute of CPAs (AICPA) highlighted that the number of accounting graduates has dropped by 16.9% since 2021. This gap between supply and demand makes outsourcing a valuable resource strategy. 

In fact, CFOs are increasingly considering offshore outsourcing as a cost-effective solution that can help them address financial and operational challenges. With outsourcing, finance chiefs can have more flexibility in bringing in the right skills, and reducing the cost of hiring in-house employees. Thus, allowing the organization to bridge any talent and skills gap while ensuring that the operations remain robust and compliant. 

Meanwhile, as a business strategy, outsourcing can reduce inefficiencies in your team’s operations. Having extra support gives your in-house employees the ability to focus on higher-level responsibilities as your outsourced team handle administrative, time-consuming tasks at the back end.  

Aside from it, you gain access to top-notch experts and top-of-the-line software without the overhead costs of hiring permanent employees.  

How Can CFOs Utilize Outsourcing to Unlock Operational & Financial Efficiency 

Outsourcing can make a big difference in streamlining the day-to-day operations of your accounting department and improving your organization’s financial efficiency. Here’s how you can further maximize your outsourcing engagement: 

1. Allot Funds for Value-Adding Services 

Outsourcing can help you better manage your budget by letting outside experts handle routine tasks. 

When you outsource transactional processes, such as accounts payable, receivable management, and tax preparation, you can allocate more of your budget to higher-impact projects, which are essential to driving profitability. 

2. Know Your Strengths 

If you’re working for a startup or a small business, you can proudly roll up your sleeves and do all the work without a sweat.  

However, when your operations scale up, that’s when things start to get a little harder to handle. Before outsourcing any of your functions to an outsourcing vendor, take the time to assess what you do best. Identify your strong suit and outsource the rest. This way, you can ensure that other responsibilities are attended to in the best possible way. 

3. Upgrade your Team’s Skill Set 

While you outsource other services to a third-party, leverage this time to upskill your people. Discuss with your managers and subordinates what are the areas that the group needs to improve.  

Upgrade your people’s skill set through seminars, conferences and training. This way, you do not only push their knowledge forward, but also mold them as indispensable assets for the company, even as you benefit from offshore outsourcing. 

Read More: How to Select the Best Financial Accounting Outsourcing Services  

The Bottom Line 

If you're still wondering if outsourcing is a good business strategy, the consistent operational and financial benefits of outsourcing—such as cost savings and better focus on core competencies —may serve as compelling evidence. 

In addition, to make sure your outsourcing engagement work, make sure to keep your communications lines open to manage your outsourced services provider. Lead them through a disciplined approach and align them with the business goals you are planning to achieve in the partnership. 

Finance and Accounting Support for Your CFO Function 

Are you planning to build a CFO support team that can assist you with your growing accounting duties? If so, consider outsourcing CFO support services with D&V Philippines. Our team of experts is ready to boost your operational and financial efficiency, so you can focus on what matters most. 

Get in touch with us today to discover how our tailored accounting solutions can support your CFO function. You can also read the case studies of our CFO-type clients or download our Premium CFO Solutions whitepaper to see if we’re the ideal service provider you’re looking for. 

This post was first published on 03 July 2020 and edited on 06 Nov 2024 for relevancy and comprehensiveness. Edited by: Angelica Garcia