More Black Than Purple
Accounting & Bookkeeping for SMEs
blogpost3

The best use case for an outsourced core function is efficiency. It seems backward, or counter-intuitive, that a company could do better with its internal resources like money if it were to send out key functions to a higher-priced agency. While there have been fads of “right sizing” over the years, this transition away from a corporately held employee/hostage situation seems to be sticking more than it has before.

1. Leaving it to the pros

The trend to get the risky and unpredictable people off of the books lets companies look leaner. There are fewer variables for health coverage and 401K involved. It also helps companies to truly be a customer of the outsourcing firm, instead of feeling a little bit shuffled to the side by an in house accounting team.

2. Liability

To break these advantages down into more specific points, let’s take the liability challenge that so many companies are feeling. When they have a data breach or a leak, or they suffer from social hacking, they do not want to point to their own employee when they say the screwed up.

They would much rather point at someone else. To outsource to a large enough organization, that group is outsourcing, too.  And so on. So the insulation is thick around everyone and there’s enough plausible deniability to go around.

3. Cost Effective

There are also considerations of additional costs that they’re putting on this year. The Affordable Care Act is a lovely act. However, it’s not proving to be very practical. When companies are not sure that a legislative action will not cost them money, they can send every minute thinking about possibilities that don’t involve closing sales. Because the company is vulnerable to a cost shift, and in some respects the employee is as well, this is just an unknown.

Escaping from the unknowns is appealing, some days. Having the sweater and jeans on, and big glasses?  It would be gorgeous! Almost as nice as knowing that, as a business owner, I don’t have to pay for insurance, or dental, and I don’t have to contribute to my employee’s retirement savings account or IRA.

We also recommend that you take a look at this 30min presentation published by Journyx on their YouTube channel:

The bottom line is that no matter what you do, you can still be fooled.  But by following this system, you get a good feeling about the people who are able to walk along with you.

 

Leave a Reply

Your email address will not be published. Required fields are marked *