Considering the current aggression and demand in economic sectors today, professional organizations are required to reduce cost and increase cash flow through their back office operations, to enhance profits. The pressure of coping up with major competitors in home and on foreign soil, have forced various companies to look out for foreign out sourcing, as a means to reduce expenditure.
How is it Implemented?
Out sourcing is usually done by handing out the less important but bulk work to smaller firms which charge less for every project. Business process outsourcing has been carried out for a long time and is widely accepted as an effective cost cutting tool. Outsourcing helps parent firms work on their primary objectives clearly and focus on increasing profit.
Advantages of Accounting Outsourcing:
Shifting the responsibilities of accounting services from a major firm to a smaller one can help both firms concentrate on the task at hand and hence increase cash flow. Various international companies currently outsource their accounting functions to smaller firms in India and this trend is steadily catching on.
Over 500 companies around the world, currently employ Indian firms to take care of accounting functions. The United States is a proactive client considering a few advantages Indian firms provide. They provide 24 hour service, charge half of what any American firm would and an easily tapped labor pool.
Hiring outsourcing firms is hence a better and cost effective way of working out accounts. Various major international players have decided to opt for outsourcing companies in India, which is mutually beneficial for both sides. Accounting outsourcing has proved to be profitable for every firm till date, which in turn encouraged others to opt for this method as well. This is an important step, which could be implemented to cut down production costs, while maintaining standard quality and ensuring a decent profit margin.