The 8 Things You Need To Know When Outsourcing Overseas
Updated: Feb 14, 2020
If you have thought about it or not, now more than ever, accounting firms and bookkeeping businesses across the country and around the world are making the move to outsource accounting services overseas.
Thinking about overseas outsourcing for your accounting firm? Perhaps you have already made the move? When done right, overseas outsourcing can be a game changer for your business or accounting firm. Here are some of the top tips of how to ready your business or accounting firm for the move.
1. Define And Document Your Objectives
Whatever the reason maybe for wanting to outsource overseas, the most important thing to document is what your objectives and expectations will be. This Includes measures of success and a timeline that you can measure against, setting target dates for completion of tasks and ensuring management oversea work. It also include measures for cost savings.
Reviewing your objectives regularly and holding your service provider accountable will lead to greater efficiency. When performance targets slip and timelines are not met, things can start to get expensive. Ensure to also account for busy periods and be realistic with what can be achieved.
2. Have A Plan
Although it may sound obvious, but outlining and having a written plan of attack will allow you to concentrate on the task at hand rather than the next move. Things such as who will train the new team, which tasks and process need to be moved overseas, who will manage the team and assess its success. These are things that need to be determined well ahead of time. If there is room in the budget, assign a project manager that can assist with all of it.
3. Budget, Budget, Budget
Outsourcing overseas will bring savings, but getting it all started is the hardest part and requires investment, both time and money. Researching and understanding the full cost of overseas outsourcing will mean no ugly surprises in the future. Getting an understanding of your costs from your service provider right from the start can help with this. Also consider the costs of travel to meet your overseas team. Generally, when you engage an overseas outsourcing service provider, the monthly charge should include all costs, with the exception of travel.
Note that some overseas outsourcing providers, advertise based on hourly rates, however fail to mention the service fees, seat overhead charges and other miscellaneous costs that come along with the hourly rate. These are things you need to consider when choosing an overseas outsourcing service provider.
4. Safe Guard Your Data
There are a number of ways that you can protect your data when outsourcing overseas.
There are many different software providers that allow you to store and access your cloud-based systems through one protected, web-based application, allowing you to control access across devices, levels and locations.
It is also not uncommon for outsourcing providers to lock down production areas, banning mobile devices and bags, removing pen and paper, disabling USB ports and disc drives.
Even restricting external email and non-work-related sites is not uncommon and, in some cases, even disabling copy and paste.
Smaller service providers generally don’t go to this extreme, but some can.
So always ask your service provider what additional steps they take to stop your data from leaving their site.
In addition seek advice from your accounting profession, association or governing body to determine their requirements for data protection when outsourcing.
5. Set Targets And Measure Performance
Similar to setting your objectives, it’s important to set targets and key performance indicators for your overseas team.
Remember to factor in overlap and budget for the costs of possibly having teams running in conjunction during the transition. It is important to remember that you can't build a team overnight, and having overlap is necessary. This is a mistake that BigPond made in 2009, when they removed their local team and replaced them with an overseas team overnight. This resulted in chaos for BigPond and caused havoc on the brand at the time.
6. Involve Your Team
Get your local team involved in the planning and assisting with the overseas outsourcing team. This will ensure a smoother and less disruptive transition for your local and overseas team. Failing to involve your team can have negative effects, leading to a "them vs us" mentality, resulting in the teams failing to work together effectively, which is fairly common, leading to a reduction in productivity.
7. Consider Local Outsourcing
If are seriously considering outsourcing, but overseas outsourcing is too big of a leap, you could consider outsourcing locally. This is often misrepresented as handing over the control of your business, however this could not be further from the truth. Outsourcing is the process of handing over a specific task to an expert. Similar to how you would hand over your car to a mechanic to service, rather than do it yourself. This same principle applies to your business.
However, the obvious downside of outsourcing locally, especially in Australia, is the cost. In order to assess if local outsourcing is the way to go, you need to consider things such as opportunity costs, level of expertise required and resources needed. Only then can you make an informed decision.
8. Choose The Right Service Provider
There are thousands of overseas outsourcing service providers to choose from. The best way to determine which one will suit you, is to seek a recommendation or advice from another business or accounting firm that has already made the move. Also when you do decide to go with an overseas outsourcing service provider, always ask for references and do your research.
Also ask about the different services they can offer, in the event you want to expand and take the time to find a provider that you can work with. After all, you’re relying on your service provider to look after your investment overseas when you’re not there.