Outsourcing of business processes has acquired a strategic importance in every company's menu, particularly in this scenario of economic slowdown and escalating cost.
But more than the decision itself, what matters most in outsource of critical functions like accounting is "How to get started"? The following "best practices" should be taken into consideration to ensure a better launch for the company in outsourced bookkeeping process: 1)Deciding on what to outsource: The key precursor to enter into an outsourcing arrangement is to know which aspect of the bookkeeping process needs to be outsourced.
Bookkeeping is a complex job and involves much aspect.
Companies can outsource process like account receivable, account payable, reconciliation or the entire of bookkeeping process.
Chief factors those should facilitate decisions are size and stability of the process, availability of resources and skill and the savings company expect to garner.
2)Finding a reliable service provider: The most important aspect of the entire process is to locate the service provider.
The simplest way to find offshore service providers is to go for search engine or relative online directories.
Once a prospective vendor is located, time and efforts should be spent in checking their credentials.
The process involves speaking to the vendors, finding out about their management, checking on the references provided by the vendor etc.
It is very important to establish that both the service provider and the company share the same corporate culture.
Companies that are culturally compatible viz.
share the same ideals and goal is like to be more successful in eking out a long term outsourcing relationship.
3)Contract Finalization: At the heart of every outsourcing deal is a contractual agreement that defines how the client and the supplier will work together Since the documentation of contract lays the foundation of an outsourcing process, optimum care should be taken while drafting it.
An outsourced bookkeeping contract should cover the following areas: > Minimum service levels.
> Security of data >Roles and Responsibility of both the parties.
>Pricing.
>Staff to be deputed, skill levels, hours of work etc.
>Exit Strategy.
4) Smooth Transition:A smooth transition process is the key to a successful outsourcing process.
A detailed project plan by both the vendor and the customer should be prepared outlining a list of known issues, assumptions, constraints, risk factors, identification of personnel, assigning of responsibility etc.
Proper and secure method of data transfer and clear service delivery models should be developed.
Companies need to open a two way communication process to minimize mistakes that are bound to occur in the beginning stages.
In the initial stages, the outsourcing relationship needs time and attention.
It is essential for the sake of advantage of both the parties to manage the relationship as a partnership, not as a company-vendor contract.
5) Evaluation of results: On the completion of a project, a careful evaluation should be done for assessing whether outsourcing the bookkeeping project is proving feasible for the company.
A proper evaluation will also dig out possible pitfalls in the outsourcing process.
And steps can be taken to improve it.
Off shoring of bookkeeping has it own advantage but a company should always practice caution and patience from selection of partner till the execution of an assignment to make the entire process suit to its need .
By following the afore mentioned guidelines a company can get better start into the process and definitely experience better outsourcing results.