Recently, work outsourcing has begun to affect everything from information technology to customer service to accounting. In fact, anyone who does not need frequent face-to-face interactions can be the target of this growing epidemic. Work involving low-skilled workers is no longer the only job affected. Even high-skilled jobs related to the medical and engineering fields are now affected [high-skilled jobs in the financial sector]. It is expected that 200,000 jobs will be outsourced each year in the next decade [the long-term impact of outsourcing]. What does this mean for the future of accounting?
Every company needs some type of accounting assistance to help prepare their financial records. Because the company cannot completely eliminate its accounting business, many companies choose to outsource their accounting departments to offshore countries, mainly India [high-skilled jobs in the financial sector]. These outsourcing companies are able to perform quarterly and annual accounting and bookkeeping tasks with less capital [financial and accounting outsourcing], all of which can be done here. All areas involving accounting are currently outsourced, including financial statement preparation, internal audit and account reconciliation [financial and accounting outsourcing]. In some cases, only part of the corporate accounting department is outsourced. In this case, outsourcing is being used to help the company's existing employees [financial and accounting outsourcing]. Every company needs to understand the pros and cons of outsourcing before making a decision.
The main reason why the company decided to outsource was that it saved a lot of money for training and recruitment costs [financial and accounting outsourcing]. Those who do these accounting jobs overseas are paid far less than those who do the same job in the United States, and work longer hours. Outsourcing is also beneficial because it saves the company the process of establishing and maintaining a separate accounting department [offshore financial work]. This helps save the indirect costs of these companies. Because accounting and tax laws in the United States change frequently here, it is much easier for CPA firms to outsource accounting services to other countries [the benefits of outsourcing]. This saves the company the trouble and cost of retraining employees every time the law changes [outsourcing benefits].
Despite the benefits of outsourcing accounting services, it does have its drawbacks. The main issue involved is the issue of confidentiality [the benefits of outsourcing]. Certain accounting information should be kept confidential, so sending it to overseas locations such as India poses a huge threat. You can never be sure that people around the world are looking at your financial statements and what type of securities are used to screen these issues [the benefits of outsourcing]. Other factors that prevent companies from outsourcing their accounting work include concerns about compliance issues and the initial investment involved in this process [offshore financial work]. Companies are not sure if the initial cost of outsourcing will exceed their potential benefits. Some companies are waiting for others to outsource accounting before they do it; in this way, they can try to measure the potential risks involved before going to outsourcing [offshore financial work].
Accounting outsourcing is both good and bad. As of now, there seem to be more pros and cons than pros and cons, mainly because of the potential savings. However, companies should not make all decisions based solely on this fact. Before making such an important decision, companies that decide whether to outsource their business in the accounting department should consider the pros and cons.Ultimate Cleaning Business Package, Click here!