Back office outsourcing: a smart way to get ahead of your peers

By: Michelle Barkley


Back office business entails processes like human resources, payroll, billing and others which are done behind the curtains. They are generally done by outsourcing professionals as this is a cost-efficient means of getting bulk work done. The small and medium firms benefit from them as the money that the firm saves through outsourcing is used for other more important aspects of the business. The back office activities can be easily outsourced as they are not the core activities of the business.

The benefits of back office outsourcing are huge, which include cost effectiveness to about 40-50%. This also increases the companyís original productivity and motivation as back office activities are very monotonous for the employees. The back office outsourcing strengthens the competitiveness of the company in the market and helps to keep them a step above the rest. It is an effective method to achieve success for the business and also to help loss making companies show profits again.

There are a lot of places where the companies can outsource to like India, Philippines, China and Malaysia. India has good English speaking educated work force which is highly cheap and are professional in all fields as well as in IT. Malaysia has a good infrastructure with additional technology and a good banking sector. China aims to become the next biggest outsourcer in the software industry and Philippines has key advantage in its workforce and people strength.

Since back office outsourcing has become a natural occurrence the governments also supports it and lends an additional tax benefits for companies. The basic concept is to get all the paper work and tedious tasks done by taking advantage of the cheap labor rate in other countries. This also helps the company to increase its global business and gain global recognition. This in turn would increase sales as globalization would put the company on a higher scale of business.

The company needs to start back office outsourcing in a systematic way. First it needs to find a service provider and check their services with respect to the quality of services needed for the company. After checking out the firmís past performance and making an agreement with the outsourcer at reasonable rates the company needs to file confidentiality agreements with the firm. This is a very important step in the process as without a confidentiality agreement the company would be vulnerable to its competitors. The company then has to provide the firm with clear instructions about the delivery and requirements of the task and the basic quality needed etc. This should not be negotiable and inability to adhere to these terms would require the firms to pay fines.

The one point to remember is that whilst choosing an outsourcer the company should not look at the price alone but also at the quality of work provided with timely submissions. Since back office works forms the backbone of a business organization and must always be updated. A single day in a business organization cannot go without the help of paper work; documentations, billings, phone calls, and meeting arrangements so ensure that you outsource sound back office services.

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Michelle Barkley is a CPA who advises people on tax preparation and tax calculation. She specializes in Finance accounting outsourcing, bookkeeping outsourcing, accounting outsourcing. To know more about Tax return outsourcing, Back office outsourcing and Tax return you can visit www.ifrworld.com

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