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3 essential business practices that can be outsourced — and 3 that can’t!
Posted by Grace Townsley
May 3, 2023
In today’s ultra-competitive business world, outsourcing has become a common practice for companies looking to reduce overhead, boost productivity and keep their edge.
Big companies with hundreds of workers across multiple states benefit from how outsourcing allows their companies to scale quickly. Small businesses with a few dozen workers benefit from the significant time savings outsourcing offers — and the affordable access to high-level expertise.
Outsourcing allows businesses to do what they love and delegate the rest
Outsourcing involves delegating certain tedious, repetitive, or specialized tasks and functions to external providers who specialize in those specific areas. Without these tasks crowding out their calendar, businesses are able to focus on their core competencies and strategic objectives, while leaving support functions to the professionals who do them best.
However, not every business task can be outsourced, and not every outsourcing service is right for every business.
To improve your company’s efficiency and maximize your margins, let’s take a look at what tasks are worth delegating — and which to keep in-house.
These three essential business practices are ideal to outsource:
1. Accounting and bookkeeping
Businesses of every size, and in every industry, can benefit from outsourced accounting and bookkeeping services.
Not only are these essential aspects of your business’s day-to-day operations, but they can also be time-consuming and complex. Plus, a small error here and there, made by a business owner or over-worked in-house bookkeeper, can translate to significant fees, extra paperwork, or a higher tax liability than necessary — hurting your business’s growth and bottom line.
One of the best advantages of outsourcing your accounting and bookkeeping is gaining access to the kind of specialized financial expertise you may not be able to afford in-house. While employing a full-time tax expert, and funding the employee benefits that go along with a new hire, may be cost-prohibitive, working with an on-demand expert who is only available when you need them saves you considerable overhead. Plus, by working with an outsourcing agency, you can trust the qualifications and experience of every professional have been vetted and verified.
By outsourcing these tasks to a qualified provider, you can free up valuable time and resources while feeling confident your financial records are accurate, timely and compliant.
2. Human resources and payroll
Managing complicated HR and payroll tasks can be time-consuming and complex, especially for businesses with limited resources and expertise. But outsourcing these essential services, like payroll taxes, recruiting, benefits administration and performance management, improves your business’s efficiency and increases compliance.
Once your accounting and bookkeeping needs are met, outsourcing your PeopleOps releases your leadership team to focus on growth, planning, coaching and connections — the everyday tasks that really take your company to the next level.
3. Risk management and insurance planning
Risk management is the process of recognizing, assessing and protecting your business from potential risks that could impact your operations, reputation or finances. One of the best ways to manage your risks is to invest in the right mix of insurances, including general liability insurance and cyber liability insurance.
Navigating insurance policies, managing the paperwork, and keeping every policy up to date is time consuming and complicated. And finding the policy that offers the right amount of coverage at an affordable price takes specialized knowledge and experience. But by outsourcing risk management, businesses can leverage the expertise and resources of specialized providers who can help identify and mitigate potential risks, develop risk management strategies, and ensure that the business is adequately protected with appropriate insurance coverage.
By outsourcing risk management today, your business can be protected from the threats of tomorrow.
These three essential business functions are better handled in-house
1. Goal setting. While you can work with an outsourced CFO to set financial targets for your business, make projections and track progress, the passion and drive to set and meet your overarching business goals has to come from within!
2. Choosing company values. Core values are your business’s guiding principles. They define your identity and are the foundation your business is built on. That’s why they must be authentic, heartfelt, and defined by your internal leadership team. When you define and uphold your core values, your employees will follow.
3. Leadership and culture. Culture is caught, not taught! While hiring and training processes can be outsourced, leading your teams to success and building an effective workplace culture must start at the top with your internal leadership. It’s up to you and your team to define and shape the culture you want to see across your organization.
When you’re ready to reach the next level in your business, outsourcing is the answer
Outsourcing key business functions can be a valuable strategy for companies looking to improve efficiency, reduce costs, and focus on their core activities — if you know what to outsource and what to keep in-house.
Before you hand off every internal function, consider what tasks take your team the longest. What bottlenecks and breakdowns slow your productivity, distract your leaders, or shrink your margins? Those are great first places to look for tasks that can be delegated.
By choosing the right mix of outsourcing and in-house operations, your business can reach peak efficiency while maintaining your core values and strong culture.
Want more? Escalon has helped over 5,000 companies across a range of industries to optimize routine business functions, like taxes, accounting and HR. Talk to an expert today.
This material has been prepared for informational purposes only. Escalon and its affiliates are not providing tax, legal or accounting advice in this article. If you would like to engage with Escalon, please contact ushere.