What is outsourcing?
Suppose Mr X is an expert in tailoring and he owns a business of textiles in Dubai, he receives bulk orders from different retailers and customers. Due to increase in demand, he is fully focused on achieving his target. But he is not able to concentrate and manage other departments like accounting and bookkeeping, which is a challenge for him, but he came to know that he can acquire services from an external institution regarding accounting and bookkeeping which may help him to pay attention to the activity in which he is specialized. An Accounting Firm in Dubai provides accounting and financial services for businesses. In fact, the act of acquiring services from an external institution or an individual or transfer of service to them is called outsourcing.
Need for outsourcing
As explained in the above scenario a person may not be specialized in every aspect of a business, such as accounting, sales and promotion of business etc. but they have to focus on other main activities such as framing of plans, organizing resources needed for the firm, maintaining the organizational structure which is the core part of the firm. So it becomes burdensome for them to focus on accounting also, which can be removed by outsourcing the accounting and bookkeeping to other institutions which render these services. This may result in minimization of time spent on accounting as well as the top-level managers can focus on other activities in which they are specialized. It can also reduce the cost of hiring a professional for these tasks i.e. it is cost-effective.
Key factors to be kept in mind before outsourcing
A firm which is rendering the bookkeeping services in Dubai may have multiple clients, so there can be an outflow of confidential information of the firm, as it is mandatory to provide all the necessary information regarding the firm to the service provider in order to work efficiently. So to avoid these kinds of risks, we must select an appropriate party for bookkeeping.
There are a number of companies who deal with accounting services but we should be aware of even minute as well as bigger malpractices. For example, if you are acquiring services from a third party which is also providing the same service to your competitor, then they can try to bribe the service renderer to get the information and strategies of your firm to develop their business which in fact will negatively affect you, so in order to avoid this kind of circumstances one must deeply study the service provider. Following things must be noted:
- The third-party must be trustworthy and loyal to their clients.
- There should be continuous communication between the firm and the service provider to get the latest updates.
- The service renderer must be made clear with the objective of the firm and the tasks to be performed by him.
- There should be a good relationship between the firm and the third party so that they can openly share their feedback and views regarding the working of the firm.
- Instead of cost, the firm should focus on the quality and efficiency of the service provided by the third party, because the best bookkeeper may carry out his tasks in a professionalized manner, which indeed involves a lot of efforts.
- The third-party should use the latest technology and must upgrade as per the changes in the business environment.
- If a service renderer is working with multiple clients he must be capable of managing all of them and work effectively to achieve the tasks as soon as possible with minimum error