You are searching about Accounting Is The Language Of Business Comment On This Statement, today we will share with you article about Accounting Is The Language Of Business Comment On This Statement was compiled and edited by our team from many sources on the internet. Hope this article on the topic Accounting Is The Language Of Business Comment On This Statement is useful to you.

Outsourcing – What Are the Advantages and Disadvantages of Outsourcing?

Outsourcing is a common business strategy. Organizations outsource functions, activities, processes and decision-making responsibilities to external providers. Outsourcing is done through contractual agreements with vendors who assume risk and responsibility for business function quality, people management, process and service. Outsourcing helps reduce organizational overhead.

So why do organizations outsource?

Organizations outsource to reduce operating costs and gain more time to focus on their core business. Outsourcing allows an organization to outsource an entire function or just a part of it. For example, you can outsource the payroll function while keeping the rest of the accounting function in-house.

Outsourcing can be part of a strategic initiative to reduce costs and improve customer service and quality. It can be flexible and used for a permanent solution or as a temporary arrangement to learn improved techniques, redesign a defective product, or fill a staffing gap.

Businesses should look for outsourcing opportunities and potential areas within the organization to determine whether all or only a portion of a function should be considered for outsourcing.

Every organization is different and may have different needs for outsourced services. Some of the more common operational functions that can be outsourced include:

• Accounting
• Customer support
• Facility Management
• Human resources
• Information technologies
• Legal
• Production
• Marketing
• Order fulfillment
• Salary

Advantages of outsourcing

Core Business Focus

Organizations that outsource the functions of their operations have the ability to focus on their core business and what they do well. As organizations grow, they are required to deal with business functions outside of their expertise. Management spends time and energy learning and managing a system or function they know nothing about. This distraction can focus on their core business. An example would be a grocery store adding video rentals to their business. If a store focuses too much on the video side of the transaction, they can lose focus on their core business, the groceries.

Cost savings

Cost savings with outsourced business functions can be significant. Savings can be in compensation costs, production setup or office space costs. These savings free up resources that can be used for other purposes.

Improved Quality

Quality can be improved by using vendors with experience and qualifications for some functions. An example of this would be the outsourcing of a custodial function. A custodial vendor can often be more equipped to perform business due diligence, recruiting, and training that may not otherwise be possible if done in-house.

Higher customer satisfaction scores

Vendor contracts typically guarantee certain levels of quality and service that may be more difficult to manage internally. An example would be that if a guardian calls in sick, it is the seller’s responsibility to find a replacement to fulfill the contractual agreement.

Efficiency in Operations

Vendor specialization offers increased levels of efficiency that can ensure faster turnaround and higher levels of quality. These specialized vendor processes can be more efficient because this is the vendor’s core business.

Disadvantages of outsourcing

Quality of Service

It is important to ensure that there are measurable levels of service quality specified in the vendor agreement. It is common for vendors to leave these measurable service levels out of the deal to save costs.

Quality risks

Outsourcing exposes organizations to certain public relations, legal and potential quality risks. An example would be that if a vehicle has defective parts and is recalled, and the defective part was sourced, the automaker still bears the burden of correcting the problem. The seller must correct the problem, but negative public feedback must be addressed by the manufacturer.

Language barriers

A language barrier can arise when customer call centers are outsourced to a country where English is not fluent. Customer dissatisfaction can occur when a customer service representative has a strong accent that is difficult to understand.

Public/Employee Feedback

Currently, there may be public and employee sympathy for workers who lose their outsourced jobs. It is sensitive and should be treated with compassion and kindness. Communicating such changes should be tailored to the diplomatic strategy to minimize negative impact.

Hidden Knowledge

Foreign workers do not share the same tacit knowledge and passion for the organization as regular workers. When external employees come into contact with customers, they may not have the same knowledge base about the organization.

Organized Labor Issues

There are strong feelings about organized labor and resistance to outsourcing to other countries. Labor groups oppose this management approach, which results in lower living standards and worse working conditions. This understanding can affect workforce productivity as it responds to corporate outsourcing.

Security and Legal Compliance

Outsourced functionality must be managed to ensure system security and legal compliance. Processes involving security or legal compliance must be formally addressed with documentation. For example, an external customer support employee may have access to confidential customer information that may be used inappropriately.

Decrease in strength

Employee layoffs can be a common consequence of outsourcing. A well-planned strategy for outsourcing will do this through obsolescence and job relocation. This can be difficult, but it can help alleviate morale problems with remaining employees.

Organizations should have a well-thought-out strategy and plan for outsourcing functions of their business. It is also important to request at least three Requests for Proposals (RFPs) to ensure the best use of resources.

Video about Accounting Is The Language Of Business Comment On This Statement

You can see more content about Accounting Is The Language Of Business Comment On This Statement on our youtube channel: Click Here

Question about Accounting Is The Language Of Business Comment On This Statement

If you have any questions about Accounting Is The Language Of Business Comment On This Statement, please let us know, all your questions or suggestions will help us improve in the following articles!

The article Accounting Is The Language Of Business Comment On This Statement was compiled by me and my team from many sources. If you find the article Accounting Is The Language Of Business Comment On This Statement helpful to you, please support the team Like or Share!

Rate Articles Accounting Is The Language Of Business Comment On This Statement

Rate: 4-5 stars
Ratings: 5807
Views: 40901640

Search keywords Accounting Is The Language Of Business Comment On This Statement

Accounting Is The Language Of Business Comment On This Statement
way Accounting Is The Language Of Business Comment On This Statement
tutorial Accounting Is The Language Of Business Comment On This Statement
Accounting Is The Language Of Business Comment On This Statement free
#Outsourcing #Advantages #Disadvantages #Outsourcing

Source: https://ezinearticles.com/?Outsourcing—What-Are-the-Advantages-and-Disadvantages-of-Outsourcing?&id=6074509