Weighing the pros and cons of outsourcing accounts payable services can put you in a better position to decide if outsourcing is for you.
With each passing day, the world of business is getting more competitive. To be a winner in such an environment, your enterprise will require a way to reduce cost, stand out from the crowd and accelerate services. Though this may seem difficult, it can be easily achieved through outsourcing accounts payable services.
Taking care of your accounts payable in-house can be a daunting task. Outsourcing can solve your staffing worries, by shifting the labor outside your office. But even with outsourcing being a beneficial option, there are several enterprises that get uncomfortable with the option of trusting an outside firm with their important financial processes.
This is why your enterprise should take some time to adequately consider the pros and cons of outsourcing accounts payable. This careful consideration will put you in a better position to make the best decision for the future of your business.
Let us start with the pros:
The Pros
Outsourcing accounts payable services will not only be about shifting the responsibility of a business process. Outsourcing can add value to your business and improve your accounts payable process. The pros include:
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Reduced cost
Recruiting your own in-house team of accounts payable professionals, along with the required equipment and software programs can be expensive. If you opt for outsourcing, your enterprise will get immediate access to experienced and skilled professionals who will perform the same task at a lower cost. You will also not have to incur the cost of equipment or software. Even as your workload increases, the outsourcing firm will keep up with it at no extra cost.
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Increase in efficiency
When you outsource, your business will immediately experience a surge in productivity. Accounts payable service providers have access to a wealth of experience and automated processes. You can be sure of your invoice copies and statements getting processed quickly. Outsourcing can help you get your accounts payable work done more accurately, quickly and efficiently than a team of in-house professionals.
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Complete coverage
If you have an in-house team, you would also have to recruit a supervisor who would be responsible to schedule or handle issues if your team is not available. With outsourcing, the firm you partner with will be training multiple employees on how to maintain accounts and keep up with standards. That means you will never be left uncovered at any point of time.
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Real-time access and automated tracking
Even though the outsourcing team will be working from an off-site location, you will be able to instantly track each step of the accounts payable process. Apart from that, you will have immediate real-time access to all your accounts payable information. You can be assured that you will never be out of the picture even when you outsource accounts payable.
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Reduced errors
Human errors can lead to expensive consequences. If your enterprise uses spreadsheets for accounts payable, there is a higher chance that there are already errors in your process. However, outsourcing can give you access to automated processes and skilled professionals who can reduce the number of common mistakes to almost 99.9%.
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Tighter control
When you outsource accounts payable, you can be sure that you are not losing or overlooking your invoices. This is because your service provider will be using a reliable system with specific control procedures to keep a tab of your papers. Working with a service provider will also reduce your headaches around conducting the right research or locating documents.
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Better services
With a reliable accounts payable partner taking care of your operations, you will also be able to find possible avenues to improve. A service provider will also have better bandwidth to add more volume, so that they can easily manage seasonal increases or year-end crunches. Your enterprise will also be able to access the latest in technology and be able to make improvements.
The Cons
As with so many things, the pros of outsourcing accounts payable also come along with a few disadvantages. Some of these cons are inherent to outsourcing while others will depend entirely on the service provider that you choose.
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Loss of control
With in-house employees, the control is more direct. When you outsource to a third-party, you would have to give up a degree of control and project visibility. You will not be able to directly control how the outsourcing provider handles your accounts payable.
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Errors in reporting issues
If something goes wrong in the process, you may not be sure how to validate the issues. You may find your managers unable to spot the source of the problem that you are seeing with your accounts payables. There could be errors in reporting, even if the service provider conducts their own audits.
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Complete dependence
When you outsource accounts payable, you will be completely depending on the service provider to handle one of your vital processes. If in case something happens to them (security breach, bankruptcy etc), it could put your accounts payable at risk. This is why you must choose a reliable outsourcing service provider.
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Processing exceptions
If your outsourcing provider is selective in what they will process, they could ask you to process exceptions. With an inflexible outsourcing provider, it may seem like you are only availing half the solution.
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Issues with duplication
If your service provider charges you by the invoice, you will need to take caution in order to avoid duplicate submissions. If you outsourcing vendor does not have the tools to explain how a duplicated submission occurred, you may feel powerless in solving the problem.
The right outsourcing service provider can ensure that you get access to all the pros, without having to incur any of the cons. If you are looking for an outsourcing partner who is reliable, experienced and affordable, look no further than Outsource2india. We will be happy to work with you and offer you with a customized accounts payable solution that will give you maximum results. Find out more about outsourcing accounts payable services to Outsource2india.
Did you like reading this post? Would you choose to outsource? If not, why? Let us know your questions, feedback or comments about outsourcing and we will be happy to answer you.
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Editor
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