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Very interesting facts. Although I do agree that strategic outsourcing can provide a significant savings to any business, I don't know if I personally would use a company from another country to provide accounting for my company. Tax laws are constantly changing and laws can vary from state to state. One mistake can cost any company several thousands of dollars. So in that respect, does one really save?
Wondering if anyone has had any experience with financial outsourcing.
Thank you for your interest on my topic. I believe that outsourcing accounting functions to another country, can obviously add more value on the that company, if outsourcing is carried out with a proper plan and mutual understanding between the client and the outsourcing service provider. One of trends in Accountancy is Cloud Accounting which provides easy logging to the company's accounting system at any time and anywhere. It provides good basis to outsource accounting to low cost Accountants from developing nation like SL. Personally, I have experiences in providing virtual accounting services to clients in developed nations. Specialized Accountants at outsourcing firms based in developing countries, are studying taxation updates in providing a good service to their clients in countries like US, as they are specialized in delivering that particular service to clients. However, some of companies are used to get only the Accountant's role from outsourcing firm based in another countries, rather than getting tax computation service from them, as that also helps more in reducing existing cost for Accounting.
i am completely agree with your article of this outsourcing. outsourcing really helpful in order to save cost. not only sri lanka, its neighboring country india has also lots of people who has very good knowledge of finance and accoounting. india is also a good option for outsourcing as it is also cheap. most of the IT companies outsource their work to the less expensive country or developing countries like india, china. this add lots of benefit to the IT companies. not only IT, many companies outsource their customercare services to cheaper country and these things really help in order to reduce cost as labour is really cheap in the developing countries compare to america.
Yes. I agree with your comment. India has also competent Accounting and Finance outsourcing service providers at cheap prices.
As some of small & medium business owners are not aware much about the virtual / outsourcing services, they are missing bundle of benefits which could have gained from strategic outsourcing. Strategic outsourcing provides huge cost reductions to organizations while improving the quality of the service from specialized experienced team. Further, it helps in reducing the pressure on management in performing so many functions.
In Sri Lanka (SL) , a sound education system exists for Accounting and Finance studies compared to other Asian Nations. Also, salary scales in SL are in low levels compared to Developed Nations as a result of lower living cost. That’s why SL has become one of best outsourcing destinations in the world for Accounting & Finance outsourcing. A qualified professional accountant is paid just $ 650 (after converted LKR to USD) per month and Accounts Assistant is paid $ 325 (after converted LKR to USD) per month, while US Accountant and Accounts Assistant are paid more than $ 4,000 and $ 1,750 per month respectively. A Financial Analyst is paid in SL about $ 750 (after converted LKR to USD) while in US, nearly $ 5,000 is paid. Just think about the saving from outsourcing.
Avg salary per month– US
Avg salary per month- Sri Lanka
Saving if outsourced per month
Saving as % if outsourced
Even though most of the business owners are aware of these cost and other benefits, they are afraid of outsourcing their Accounting and Finance functions, as they have reasonable doubt that this can make my business more complex. Human being by nature think a lot at a change. But if they chose the right person, he will realize what can benefit himself or his business. Therefore, choosing the right person to outsource their existing in house functions is vital or any of the small and medium business owner.
What's the idea you have?