Outsourcing Q & A

  1. What is outsourcing?
  2. Who is outsourcing?
  3. Why should I outsource?
  4. What can I outsource?
  5. What should I outsource?
  6. How do I start outsourcing?
  7. How much does outsourcing cost?
  8. Why does outsourcing save so much money?
  9. How can I get more information about outsourcing?

 


What is outsourcing?

Outsourcing, also known as "partnering," is defined as the movement of in-house work to an external supplier.  The outsourcing of specific business functions has become popular with companies of all sizes.   Few companies consider accounting to be a core, revenue generating part of their enterprise.   By outsourcing the back office processes of the accounting department, you free up management for high level, strategic, thinking and planning.

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Who is outsourcing?

Large organizations and small businesses, individuals with only an idea or a dream, Fortune 500 industrials and high-tech start-ups have turned to outsourcing to help grow their businesses. From accounting to tax, from real estate services to recruiting, outsourcing is projected to be a $300 billion business.  It is estimated that 75 percent of Fortune 500 companies outsource non-core functions while 83 percent of the fastest growing companies in USA are outsourcing in-house cost centers.

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Why should I outsource?

There are numerous reasons why businesses are outsourcing more and more.  Here are just a few:

  • Allows management to focus on core competencies
  • Reduces dependency on key employees
  • Increases access to the latest tax laws and accounting policies
  • Simplifies the budgeting process
  • Provide access to world-class service
  • Accelerate the process of size expansion and reduction
  • Minimizes employment risks
  • Reduces and controls operating costs
  • Removes difficult to manage or out of control functions
  • Reduces costs in accounting & overhead
  • Accesses trained, highly qualified staff
  • You pay only for actual work done
  • DAS outsourcing is a fraction of your existing costs!

 In addition, you won’t need too ...

  • Hire, train and pay staff
  • Shop around and buy accounting software
  • Install the programs and tax tables
  • Maintain your tax and accounting software
  • Ensure you have enough file storage
  • Calculate and process payroll and taxes
  • Stay current on federal, state and local tax laws
  • Collect outstanding invoices
  • Set-up your own direct deposit
  • Set-up your own electronic tax deposits
  • Fill out and file your federal, state and local tax forms
  • Deposit all of your federal, state and local payroll taxes
  • Update your tax tables as required
  • Upgrade your software and hardware as you grow
  • Retain your payroll records and backups offsite
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What can I outsource?

DAS can provide you with financial reporting, general ledger accounting, consolidations, budgeting, management reporting, billing, accounts payable/accounts receivable, payroll, taxes, expense reporting, and controls & compliance management.

 DAS offers individuals and businesses of all sizes a full range of service options to complement and complete your internal accounting and administration needs. If you need the services of a full-blown accounting department, without the high price, you can outsource through DAS.  DAS offers all accounting skill levels, from CFOs to bookkeepers.  We provide assistance in all areas of reporting and tax requirements.

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What should I outsource?

Typically, two types of shared services are outsourced:

 

  • Transactional services - repetitive and generic functions

    • Accounting

    • Payroll

    • Benefits processing 

     

  • Professional services – knowledge based functions

    • Financial management

    • Tax planning

    • Human resources

    • Administration

By dividing your business activities into four categories, you can identify outsourcing opportunities that offer the best long-term value, increasing quality and reducing cost:

  • Peripheral functions provide no competitive advantage to your business and are not essential to the core business. These functions are easily outsourced and produce minimal risk.
  • Supportive functions are essential, but not a core activity. Failure in this area would cause serious damage to the business. In this case, a manager's time and resources could be better spent on activities fundamental to the business, recruiting this expertise externally.
  • Strategic functions provide an actual or potential source of competitive advantage. One reason for outsourcing strategic functions is to achieve better value for strategic thinking and capabilities.
Core functions, or competencies, are the primary business activities that are either directly or closely related to the production of your revenues.  These types of functions should generally not be outsourced.
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How do I start outsourcing?

  • Identify accounting/financial functions of your business
  • Analyze how much each of these functions cost you.  Don’t forget to include: 
    • Salary
    • Payroll taxes
    • Benefits
    • Hiring and training
    • Office space
  • Call DAS to help determine how much it would cost to outsource any or all of these functions
Together we will develop an action plan to save your business money, time and resources!
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How much does outsourcing cost?

DAS outsourcing services typically cost 30 to 80 percent less than doing the function in-house!  In addition, improved quality is often the by-product of outsourcing.

  • Reduced cost
  • Increased quality
  • Improved flexibility
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Why does outsourcing save so much money?

  • Economies of scale – We do a large volume of the same functions over and over again.  Because of this, we are extremely efficient and effective at all we do.
  • Pay only for hours worked – How much down time do your employees have that you are forced to pay for?  Don’t forget to include:
    • Vacation and sick time
    • Lunch, coffee, social, and/or smoking breaks
    • Training and staff development
  • Highly trained staff – Our staff is ready to meet the needs of your organization today
  • Use of state-of-the-art technology – DAS uses technology at every opportunity to maximize the automation of processes. 
More automation = less opportunities for human error

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