Outsourcing – Is it a Dirty Word?

Posted: April 30, 2019 - Blog, Finance & Accounting

 

 

 

 

 

 

 

The word outsourcing conjures up a lot of negative images, especially for small business owners. It suggests job cuts, loss of control, and lack of transparency. According to popular thinking, businesses that outsource are either extremely ruthless or especially desperate. And, because of that perception, a lot of businesses make a blanket decision not to outsource or even investigate the option in-depth.

Admittedly, there are some negative examples of outsourcing. Realistically, however, those few instances distract from all the positive examples and obscure what an advantage outsourcing can be.

Instead of assuming that outsourcing is off-limits, take some time to learn what it actually offers. You might be surprised to learn that 70% of small businesses surveyed outsource tax prep, and over half outsource payroll, so clearly there are outsourcing strategies that work. Consider a few of the ways that outsourcing can add strength to your business:

Cut Costs to Free Up Capital

Outsourcing cuts costs without requiring layoffs. First and foremost, it allows businesses to act faster, which minimizes the widespread costs of inefficiency. Second, it lets companies access resources like professional accountants at a fraction of the cost of full-time staff. The myriad of cost savings associated with outsourcing adds up to a substantial amount of new capital that businesses can funnel into growth.

Focus Resources Where They Matter Most

Small businesses are continually asked to do a lot with a little. Outsourcing something like payroll or tax prep liberates in-house accountants to focus on long-term strategic planning instead of routine accounting workloads. In general, outsourcing time- and labor-intensive obligations to a trusted off-site team lets founders, executives, and everyone on staff work on what is important instead of what is required.

Access Talent in a Competitive Labor Market

Unemployment is extremely low right now, especially for specialized professionals like accountants. Finding qualified candidates is hard when supply is so sparse, and attracting them requires competitive compensation. Outsourcing eliminates the need to overpay or to operate without the necessary staff. Outsourcing firms maintain a deep and diverse pool of talent that is available to clients on-demand so that skill gaps and talent shortages never become obstacles.

Become Lean and Flexible

We are living through a time of economic disruption and uncertainty. In order to remain competitive, today’s businesses must be able to pivot quickly and adapt capably to changes that arise suddenly and unpredictably. Outsourcing keeps businesses lean by limiting the staff they need to keep on hand. At the same time, outsourcing makes businesses flexible by offering up extensive or esoteric resources the minute they are necessary. Having an outsourcing partner is an excellent contingency against the unknown.

There are many misconceptions about outsourcing, chief among them that it’s a dirty word. There are also many ways to outsource, including options customized to the needs of your company. Explore what is possible by contacting us.

Phillip Lampugnano

Phil is the Principal of Business Advisory Services at CDH. Phil joined CDH in 2007 as a Staff Auditor where he thrived for 10 years and reached the level of Senior Manager. He was promoted to oversee CDH's Business Advisory Services Group (BAS) in 2017 and was promoted to Principal the following year. Phil is a Certified Public Accountant (CPA) and is a "Double Demon" having recieved both his undergrad and MBA from DePaul University.