HOW TO ASSESS AND SELECT THE PERFECT ACCOUNTING OFFSHORING PARTNER
Due to its cost advantages and project delivery efficiency, offshore outsourcing is becoming the most appealing method for many accounting, IT, and software firms and companies. An offshore outsourcing partnership is like a long-term marriage between two businesses, as it requires total commitment for the partnership to succeed. Therefore, it is crucial to make sure that before selecting the ideal partner, you carefully assess the offshore service providers. Businesses have discovered that, with the optimal offshore partner, they can reduce development costs, shorten time to market, free up internal staff to concentrate on core skills, and gain access to top talent without the headaches of hiring.
But that crucial phrase, "the optimal offshore partner," encompasses a multitude of nuances that, if ignored, can sink an outsourcing project and put a company behind the eight ball at a crucial juncture in its go-to-market plan. There are several horror stories: over-promising, under-staffing, security breaches, culture shock, and many other reasons that may convert a dream of profits into a nightmare of cost overruns and software that falls far short of what is required to achieve the intended competitive edge.
We make an effort in this blog to give you instructions for evaluating companies and to make sure that you pick an offshore development company that is most appropriate for your business.
First, you will have to consider the following while conducting a preliminary survey. You will mostly rely on public information sources for your initial survey. The main goal is to reduce the field such that creating your short list of three or four vendors is an easy effort. Although you may complete a lot of this survey online, you shouldn't ignore your network of contacts in and outside of your market because their knowledge could end up saving you a lot of time. A strong recommendation can move a vendor directly to the top of the shortlist, but you should never skip on your own research.
1. Specialization and firm size
The ideal company to work with is one that is both large enough to do the task and small enough to treat your company as a valuable client who will receive prompt assistance when required and who will make your success a top priority. We also suggest that the company should specialise in accounting rather than providing a variety of outsourcing services. With a smaller vendor, you should logically prefer a specialist in the area you require rather than a jack of all crafts.
2. Business models
Although you might only consider offshoring for short-term projects, long-term offshore projects have the highest ROI. Look for suppliers who can adhere to the standard short-term and long-term project model and timeframe. It provides you with the choice of drafting a contract that, If the first engagement is successful, will allow you to switch between a project from a more temporary arrangement to a committed offshoring model.
3. Company background
This is a general phrase for all the additional details you might be able to learn from the offshore company's website or other open sources, such as the number of years the company has been in operation, client references, the organisation's project management process, facilities, and so forth. However, often you will only receive a partial response to your inquiries, and the complete discovery will have to wait until the second stage, when you actually begin speaking with the vendors to develop your short list. As a result, the majority of this material will be covered in the section after this one, but you should strive to learn as much of it as you can in the first step to help you make a short list.
However, there is one element of the company's history that you would want to give significant consideration to straight away, and that is the issue of culture. A knowledge of the cultural differences you may encounter can be a great guide to interpreting all the other information you'll be receiving. This encompasses many various aspects, and it's rarely a reason to rule out a company right away. Language skills are also relevant in this situation. While two companies may have roughly the same percentage of employees with excellent written English skills (as would be expected given that the outsourcing industry depends on this), one vendor may have a higher percentage of individuals with a good command of spoken English than the other due to the national culture, and this should be taken into consideration when evaluating the vendor's communications capabilities.
The next step is to create a shortlist. You will do a more thorough investigation in this stage in order to create a short list of three to four vendors from which you then choose the perfect partner by following the due process. As on a Space Shuttle's computers, the breakdown of one computer may be quickly identified by the continued collaboration of the other two, thus you shouldn't have any fewer than three potential offshore partners in your shortlist. This increases your ability to spot lowball offers and other exaggerated claims while selecting an outsourcing company. From your shortlist, you should select the company that comes out well in the following aspects:
Transparency is a goal that can only be partially achieved because it calls for having the same level of visibility into vendor activities as you do into your own. As a result, it cannot be investigated by means of direct inquiries. Alternatively, it could be seen as a form of meta-knowledge that was gleaned from the process of asking all the other questions included in this stage. Since clear communication is at the heart of transparency, any difficulty in getting your questions answered, as well as any hesitations or ambiguity, should raise red flags during the hiring process.
You don't have to worry about recruiting and supervising personnel when you outsource, so you receive the knowledge without the headaches. This is one of the main advantages of outsourcing. It's still crucial to look at the caliber of the candidates who are willing to work on your project, even when you no longer need to deal with HR responsibilities one at a time. Here you can opt to request the resumes of vital employees; at this stage, you're searching for crucial data. You might want to ask the following high-level questions.
- How many years of work experience does each employee have on average?
- What level of education do the staff have?
- What's the average length of time employees have been with the company? What's the attrition rate?
Success in outsourcing is based on effective communication. Unless your outsourcing vendor has excellent communications in terms of both management and methodology, it can be challenging to communicate with accountants when they are simply on the other side of the wall. Adding thousands of miles of distance and multiple time zones can only make it more difficult.
D) Digital infrastructure
It is now easy to exchange information even if your partner is located overseas thanks to innovations in outsourcing and the growth of cloud computing. To determine if a company can effectively complete a job, you should also see if they have the necessary tools to safeguard sensitive information. Companies that outsource don't only invest in their staff members. They also make sure to use the most recent accounting tools and technologies to stay current and protect the confidentiality and data security of their clients.
In addition to firewalls and access controls at outsourced vendor sites, security also covers more significant concerns such as the intellectual property and contract laws of the nation in which they are located, civil stability, etc. Review the vendor's physical and electronic security in terms of facility security. How big is their infrastructure for network access control, intrusion prevention, and firewalls? What kind of access control is kept in place at the vendor's premises physically? What concerns distant communication? How will your IP be safeguarded if any members of your team work remotely? This enables them to offer their customers the highest calibre services possible.
Finally, references should be viewed as a chance to delve more into the factors taken into account in this second stage. While it's likely that you'll want to focus on examples from your industry or one that's closely similar, it might be useful to check references from other industries as a form of triangulation because doing so may reveal potential issues that you otherwise wouldn't have considered. Referrals are success stories by nature, so don't be hesitant to delve deeper.
Outsourced accounting services are a lifesaver because they cut costs for your company and improve operational efficiency.
By keeping these things in mind when choosing an outsourcing partner. You would enjoy safety and a wealth of advantages in terms of cost, effectiveness, knowledge, and professionalism, among other factors.
If you are looking for an accounting services partner, then contact Entigrity Offshore Consultancy Services. They are India's No.1 offshore service provider who cater to the needs of more than 600 accounting firms all across North America and the United Kingdom.
Entigrity™ is a trusted offshore staffing partner to over 600+ accountants, CPAs, and tax firms across the US and Canada. Our flexible and transparent hiring model gives helps firms of all sizes to hire staff for accounting, bookkeeping, tax preparation, or any other task for 75% less cost. As a firm 'run by accountants, for the accountants,' Entigrity captures the hiring needs of accounting firms most precisely, providing staff that works directly under your control and management; still, you are left with the least to worry about compliance, payroll taxes, overheads or any other benefits.