Running your own business often means wearing many hats. With time as your most precious resource, outsourcing tasks to third-parties or tools has the potential to streamline your workload and help you focus on the tasks that matter most. However, while the rise of cloud-based business management tools and working from anywhere has made it easier than ever to share the workload with others, business owners need to be strategic in what tasks they keep in-house and what they outsource.
Anoop Rehal explores the options available for outsourcing tasks, how to determine the right work to outsource and the techniques to maximise the value add potential of outsourced work.
The changing options for outsourcing
Outsourcing is nothing new in business. Companies have a long history of using external parties for support with their operations to augment their resources. On the one hand, there are tasks that the business lacks the time or manpower to manage themselves – this could be a due to not having enough staff or to prioritise internal team members time on other projects that add more value. The second scenario is when the business lacks the internal expertise and needs to use an external source to provide the service they need on a limited basis.
Both of these scenarios have been greatly accelerated by the growth in business technology solutions that enable businesses to work collaboratively, in real-time, using shared data and visibility. Businesses can – and do – outsource their customer communications to professional call centres in other countries while still being able to track activity from home. Meanwhile, the move to managing financial data on cloud systems can enable companies to engage a virtual FD on an ad-hoc basis, providing instant access to the information they need to advise and support.
However, despite the evolution of technology, outsourcing is not a magic wand. Implemented without the appropriate controls and oversight, giving important tasks to third-parties can actually have a negative impact on your productivity and performance, leaving you worse off than you started. In our experience, outsourcing is best viewed as a way to partially augment your capabilities, managing certain elements of processes, but not replacing your input entirely. No solution, be it technical or human, is 100% effective, so it’s important to keep an element of control. And that starts with picking the right tasks to outsource.
What tasks should I consider outsourcing?
When thinking about outsourcing, it’s best to approach it on a task-by-task basis, based on the needs of your business, the tools and resources available internally and the priorities ahead. These needs may also evolve over time, so it’s important to regularly review your processes and setup to ensure that they’re adequate for your future plans.
At the early stages of your business, when you’re looking to focus on growth, it can be useful to outsource routine tasks to help your team prioritise revenue and relationship generating work. This can include tasks like administration and data entry, for example entering invoices and calendar or inbox management.
As your business grows, it can also be useful to outsource specialist functions that can help your business progress, but that you don’t yet have the resources for internally, such as financial management, social media marketing or graphic design.
However, throughout your business journey, there are certain sectors which we recommend always stay tightly coupled to your business, including:
Customer relationship management: Your customer relationships are a key asset for your business, so passing your customer support to a third-party is a risk. In reality, solving customer issues yourself, or with your core team, can be a route to building stronger relationships that drive long term value.
Payments and cash flow: While chasing debtors and payments can seem tedious, having visibility over money owed to your business is essential for managing your cash flow. Leaving it to an external party can lead to miscommunications and missed payments. Likewise, while payment uploads can be routine work, payment approvals are a key part of your business controls.
Managing your outsourcing process
As important as choosing the right tasks to outsource is managing the outsourcing process itself – at the end of the day, you’re responsible for what goes on in your business, no matter who’s doing it. To that end, it’s important to consider:
Matching the right people to the right task: When outsourcing a task, make sure they have the necessary skills, expertise and experience to not only perform it to a high standard, but to understand its relevant context for your business. This is especially important for overseas outsourcing, where local regulation, customs or workflows may differ from your own.
Communication and visibility: Outsourcing should never be a black box – you need to know what your external team is doing and be able to understand their performance. This requires not only shared data and visibility, but also regular check-ins on process and targets to ensure you’re aligned.
End-point control: It’s important that even if someone external, or a software tool, is performing a task, that someone remains accountable within your business. Just as within your business, someone must be responsible for the quality, checking and reviewing of all work outsourced and maintaining standards.
Value add: The goal of outsourcing is to enable your business to gain more value from the time available. With that in mind, if you’re outsourcing routine work in a process, the goal should be to use the time freed up to improve the end goal. For example, if you outsource your invoice management to be able to source figures faster, how can you then use that data to produce better, more useful management accounts?
How we can help
At Haines Watts, we help businesses build effective outsourcing processes to suit their unique needs, but we’re also a trusted accounts and financial management partner.
We take a collaborative approach to every engagement, putting value at the heart of every conversation to help you make the best decisions for your business. Outsourcing your accounts function to Haines Watts is about more than just getting the work done – we ensure that our work helps your business get where it needs to go, from management accounts to virtual FD services.
To find out more about our outsourced accounting services and how we help businesses get more out of their numbers, get in touch with a member of our team today.