Top 6 Challenges of Outsourcing your Bookkeeping and How to Overcome them
Sep 18, 2023 | 15 Min Read
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Challenge 1: Communication and Synergy Building
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Challenge 2: Losing Control Over the Bookkeeping Process:
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Challenge 3: Lack of Transparency in the Vendor-Client Relationship:
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Challenge 4: Staff Engagement: Engaging Team Members
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Challenge 5: Data Security and Confidentiality
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Challenge 6: Aligning Expectations for Mutual Success
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Why Outsource Your Bookkeeping to Accountimize
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An increasing trend towards outsourcing the bookkeeping function has been noticed in recent times. Not only does outsourcing save time for entrepreneurs to focus on core competencies, but it also offers cost-efficiencies, improved accuracy, and access to expertise. However, outsourcing also brings along some challenges. In this blog, we will discuss the top six challenges of outsourcing your bookkeeping and how to overcome them.
Challenge 1: Communication and Synergy Building
Effective communication is the foundation for any successful relationship. One of the primary challenges of outsourcing is establishing clear lines of communication between the client and vendor. Communication issues can persist due to language barriers resulting in misunderstandings and time-zone disparities if the accounting service provider is based in another country. Also, due to the lack of face-to-face interactions, building trust can be more challenging.
Overcoming Challenge 1: To overcome this hurdle, businesses should establish clear communication protocols, specifying the preferred mode of contact and the expected response time. Businesses should also schedule regular virtual conferences to build trust and confidence in each other, as well as training to overcome any language or cultural barriers. By embracing technological tools, data can be updated and accessed in real time, making communication seamless.
Furthermore, businesses should specify the go-to individual for certain issues to increase response times and reduce confusion. Lastly, for a successful relationship, both businesses should foster an environment of transparency, openly sharing updates, challenges, and feedback for improvement.
Challenge 2: Losing Control Over the Bookkeeping Process:
Outsourcing may lead entrepreneurs to fear the loss of control and autonomy over critical financial processes of the business. This can be due to a lower level of control and oversight as compared to having an in-house team. Without direct supervision, they may feel that mistakes will go unnoticed.
Overcoming Challenge 2: Businesses should define specific roles and responsibilities of the outsourcing arrangement. Regular and detailed reports in real-time covering financial metrics, Key Performance Indicators, or regular audits of the outsourced work can also help in overcoming this challenge.
However, trusting the expertise of the bookkeeping and accounting service provider is essential for a successful relationship. If the loss of control is of great concern, start with a gradual transition with less important functions.
Challenge 3: Lack of Transparency in the Vendor-Client Relationship:
Transparency is crucial in building trust, especially in outsourcing partnerships. Transparency issues can exist due to a lack of information sharing about progress, processes, and methodologies being adopted. Oftentimes, hidden costs are also present, which the clients are unaware of.
Overcoming Challenge 3: Begin by clarifying whether the costs specified are final or some other costs also exist, which have not been mentioned. Also, when scaling operations, how would costs change?
Similarly, you should set your expectations with the outsourcing partner. The contract should specify the frequency of reporting, communication process, and expected response time for queries. Moreover, having a well-documented workflow can help the client understand how tasks are being handled.
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Challenge 4: Staff Engagement: Engaging Team Members
In-house staff are often resistant to change when introducing outsourcing procedures. This is often due to concerns over job security, roles, and the unfamiliarity of working with an external team.
Overcoming Challenge 4: The first step to overcoming staff concerns is to address any questions promptly and highlight the benefits to themselves and ultimately, the business itself. Companies should invest in training, and upskilling programs to allow them to focus on more strategic functions. By establishing regular communication lines, in-house staff can gain familiarity and trust with external accounting service partners.
Where feasible, include staff in the decision-making process to make them feel included and valued. Implement a gradual transition, if possible, to allow staff to adapt to the changes over time. Also, highlight potential opportunities if new roles emerge due to efficiencies achieved by the outsourcing process.
Challenge 5: Data Security and Confidentiality
Business owners may believe that sharing sensitive data with an external party can lead to potential data breaches and loss of confidentiality.
Overcoming Challenge 5: Businesses should start by vetting the outsourcing partner to ensure they have a strong track record of data security and confidentiality. Request for references for further confirmation.
Businesses could also request Non-Disclosure Agreements to ensure confidentiality, limit control over data to specific individuals only, and use secure connections and encryption for data transfer.
Similarly, regular data backups should be implemented to safeguard information and training should be provided to staff on how to recognize threats and respond to security concerns.
Challenge 6: Aligning Expectations for Mutual Success
Misaligned expectations can lead to disappointment and conflicts in outsourcing relationships, especially due to unclear roles and responsibilities.
Overcoming Challenge 6: Quite simply, business owners should specify the scope of work, timelines, and other essential details to eliminate any ambiguity. Both firms should engage in discussions to align on goals. As stated previously, transparency in the process will further strengthen relationships, enabling prompt resolutions to disputes.
Lastly, conduct regular performance reviews to evaluate how well the outsourcing arrangement is aligning with expectations.
Why Outsource Your Bookkeeping to Accountimize
If you’re facing issues searching for an online bookkeeping service, look no further. Accountimize is your trusted partner for bookkeeping, providing a comprehensive range of services such as accounts receivable and payable management, and professional financial reporting services.
We believe in addressing challenges through transparent communication, maintaining clarity, and ensuring no hidden costs. We prioritize open dialogue and alignment with your goals while maintaining data security.
Call us today to outsource your bookkeeping, because with us, you gain control, not lose it, while simultaneously empowering your team with reliable and confidential services to meet your financial needs.
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