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Why Outsource Your Bookkeeping Services, Anyway?
One of the most popular questions asked by SMEs is “Why do they need to Outsource Bookkeeping services?”
Well, with so many things on their plate, it’s easy to forget that they also need to manage their finances. And having their bookkeeping done by someone else will help them keep their business’s finances in order.
Also, when working with a professional bookkeeping service provider can save time and money. Yes, it will not only keep everything smooth; it will also cut down on the chances of making financial mistakes.
These are all just tips of the iceberg. There are plenty of things you ought to know about bookkeeping outsourcing services.
How To Find The Best Outsourced Bookkeeping Services For Your Business?
We don’t want to waste much of your time, so let’s discuss the second most asked questions by SMEs:
“What is the best way to find the best outsourced bookkeeping service for your company?”
Here are some tips on how to get the best one:
When it comes to communication and work management, tech plays a big role in the BPO industry. In choosing a service provider, it’s always best to go with one that has the most up-to-date technology.
When you choose a provider, think about the software and hardware they use. Also, how their system is set up, and what kind of Internet connection they have. This is very important especially for payroll bookkeeping services. If it’s necessary, you might need to go to one of their offices to see how they work.
Now more than ever, businesses are worried about their data. Bookkeeping clients always ask: is it safe and secure?
When talking to a service provider about security, your BPO partner should be open and honest.
A BPO company that doesn’t have all the best and most up-to-date security systems might not be the best choice for you. It puts your security and privacy at risk. And it will cost you more in the long run than taking preventative steps now.
Transparency from both sides will make it easier to reach goals faster. People who work for an organization make a big mistake when they don’t treat their outside team as if they were part of the company. So don’t commit the same error.
In order to make this happen, both parties should set clear reporting and management rules and goals.
In most cases, you’re going to be hundreds or even thousands of miles away, but you’ll still want to be told about what’s going on at least once a week or even every day. Have the group show you what goals, tools, and metrics they’re using.
Reviews and Testimonies
The numbers that show how well your possible partner company is doing are enough to make you hire them.
Statistics are important, but you shouldn’t rely on them all the time! Learn how to dig deeper and look at more of the possibilities you might face when you start a business together.
When making a decision, think about how a BPO company is seen by their former employees and businesses that have worked with them.
Testimonies give you a good idea of what it’s like to work with them.
Google reviews is a good place to look for online reviews. You can also look for reviews on social media networks like Facebook and LinkedIn (FB, LinkedIn).
However, when you read reviews, don’t only pay attention to the negative ones. Also, think about the positive ones. You will be able to come up with a more well-rounded decision if you do this.
You’ve done a lot of work to build your firm’s culture. If you want the best BPO for you, it should act as an extension of the brand you’ve made.
You should think about the people you want to work with and the experience you want your agents to have. The right partner will have a culture and values that are in line with your own. In this way, you can work together smoothly.
Keep in mind that the bookkeeping service you choose should have a lot of experience with the kind of accounting that your business needs. They should also know how to work with your industry. When you’re looking for a BPO partner, you need to think about how well they know their work.
Also, it’s a good sign if the company you choose has been around for a long time. Their long life is a sign that they can deal with problems that they might face as your partner. Even though it’s not always important to look for a company that has been around for a long time.
Always think about a BPO company that is in the area where your company is most comfortable.
When you choose an outsourcing company, make sure the location of your outsourced team fits your needs. If you want to save money, there are a lot of business bookkeeping outsourcing companies in the Philippines that can help you. They can provide you with services that will meet your customer needs.
Take into account the fact that different time zones can have a big impact on the work you do. Make sure that you can plan your work so that your business doesn’t fall behind. Establish a mutual understanding so that no matter what factors or technical problems you might run into, problems can be quickly solved.
The BPO industry is going through a lot right now due to the virus.
Take some time to look into the BPO’s financial health and even the country it’s in. It is almost a sure thing that their bookkeeping services fees will rise. If the industry is predicted to go down in a certain place, it might be better to look for work somewhere else.
It’s also a good idea to check out the company’s financial history and growth potential. If everything looks good or not. If a BPO has gone bankrupt under the same management before, you might want to think again.
As per the paper published by Cornell University, employee turnover increased costs.
People leave BPO companies and are replaced by new people, all the time. This means that as a customer, there is a chance that you will have to deal with people you don’t know. This implicitly means a higher demand on compensation and training.
The most important thing here is to figure out how much you can afford. Then find an agency that fits that price range.
It’s a good idea to be flexible with your budget because BPO companies know more about how much money is needed to reach your goals. Make sure to get prices from a lot of different vendors before you choose the right partner.
It’s a tad tedious to check all of these criterias, but you will be able to make sure that you get the best partner.
What To Look For In A Bookkeeping Service Provider?
A professional bookkeeper can be a huge help when it comes to balancing your daily expenses, earnings, and invoices.
Whether you’re just starting your business or you’re fine-tuning your financial strategies, a bookkeeper can be a huge help.
When you outsource these tasks, you can cut down on the risk of making mistakes and instead spend those extra hours on other things. But there are so many service providers to choose from. It’s hard to know which one is right for you.
Here are a few things to look for when you choose a bookkeeping service:
One of the main reasons people hire bookkeeping services is to get help with their statements. That means, you need experts in the field of accounting.
Conduct a background check on the company you want to hire to do your bookkeeping for you. Look at the company’s past clients, look at the team members, and talk to the management team. These steps will help you get a better idea of how good the outsourcing company is.
You always want to work for a company that has CPAs and CAs in charge of the workers. You would not want to spend money on a team that was not very well-trained.
If people in charge of your business don’t have a lot of experience with audits and accounting, you won’t feel very safe giving them the books. But it’s not enough that they’re only experts in the field, they should also have a high level of professionalism.
You want a business bookkeeper who has relevant experience, as well as professionalism and skills that can help you get to the next level.
Cost of Talent
The basic costs for in-house bookkeeping are $3,000 to $4,000 a month. A lot of money, indeed. Especially if you’re a small business that is just beginning.
Meanwhile, outsourcing can cost you between $500 and $2,500 a month. Sometimes, you can get it for $200 at the very least. The difference is huge when compared to a team that works in the same place.
Based on these numbers, you already know why a lot of businesses choose to hire people who work from BPOs specializing in bookkeeping services. The money that was saved by outsourcing can be used to grow the business. Also, you can use that to make your product or service better or more useful to more people.
To know these numbers means, you can ensure whether the amount you paid is at par with the industry benchmark.
How To Manage And Monitor Your Outsourced Bookkeeping Service Provider?
BPO is utilized by businesses of all sizes and industries to run more efficiently, keep focused on core competencies, and optimally use available resources. But that doesn’t mean that everything is autopilot. Firms should still monitor and manage their partner. Here’s a few reason why:
Business Process Outsourcing Risks
There are always risks when it comes to business process outsourcing, so it’s important to make sure you’re actively mitigating them. In today’s competitive business world, many companies use third-party services for business functions and operations, but there are risks to be aware of.
- Errors During Handover
The move of a work area can sometimes be slow. Many companies go back to their main business as soon as they find a partner for the BPO. The consequences of a quick handover can be very bad, so be careful. Subsequent corrections can take a lot of time and effort, and they can also raise the cost of hiring someone else to do your work.
To avoid this, you need to plan very carefully, taking into account all the possible risks. As soon as you hand over the reins, don’t let go of them too quickly. It takes time for the new work processes to become established and work well together. We suggest that you keep detailed process documentation that you update at regular intervals.
- Vague Clarity Of Task Areas
If you outsource work, you need to be very clear about what you want with your bookkeeping services vendor and how it should be done. If you don’t, you’ll have a lot of problems.
You need to set the rules for how you want your project to look, who is responsible for what, and if there are any rules that your vendor needs to follow to get the project done.
If you do this, there won’t be any disagreements in the future, and you can avoid this risk. When you write a summary of what you want to do for your company, it all starts there.
- Communication Barriers
Global BPOs that don’t have the right agents can make American customers sound like they have bad accents.
When there is a language barrier or the agent isn’t very well-trained, it can be hard to get things done quickly. This can lead to longer handle times and lower customer-centric metrics like first-call resolution (FCR), customer satisfaction (CSAT), customer effort score (CES), and Net Promoter Score (NPS).
The above risks only pertain to concerns with skill and process. But There’s plenty more risks that you should know about, so let’s run through them quickly:
- Governance and Compliance
- Customer Attrition
- Employee Attrition
Managing Your Outsourced Bookkeeping Services
You’ve started a business, bought things, and made sales. Now, you have to keep track of everything. We understand if you don’t want to keep track of all your transactions, but if you hire a bookkeeper, you won’t have to think about it again. Or do you?
It turns out that having a bookkeeping services partner means you need to always check on them. BPOs usually handle multiple bookkeeping accounts and you can’t expect them to loop you in 24 hours a day, 7 days a week.
So with that, here’s a few tips to start having a harmonious working partnership with your BPO:
1. Communicate Regularly
All partnerships need regular and two-way communication in order to work out well. It’s important to keep the lines of communication between you and your outsourcing provider open at all times. Be honest about the challenges you face and problems you foresee, giving real-time feedback as you go. Listen to what they have to say, and always look for solutions that work for both of you.
In addition, set up time to talk about how things are going. Regular meetings with your BPO provider will help you stay up to date on what’s going on, but they will also help you build a better relationship with them.
2. Set Key Performance Indicators (KPIs)
Key Performance Indicators are very important when you are looking at your BPO partner company. They help you see where you came from and what you need. It can also help you figure out where you are going.
Monitor your financial, campaign, and promotion performance with KPIs. They can also boost morale and customer satisfaction, as well as many other parts of your business, as well.
According to Fox School of Business, here are KPI areas you need to focus on:
- Goal measurement – indicates if you are meeting (hopefully exceeding) goals that were set
- Information & feedback – provides real data on company performance which can be used by upper management for decision making
- Morale – positive KPIs can be incentivized, which pushes the staff to go above and beyond
- Consistency – measuring and monitoring KPIs can help a company stay consistent over time. Always ensuring they meet their goals.
3. Treat Your Vendor as a Partner
There’s a reason we keep on saying “partner” in this article, because we are literally engaged together in the same activity.
There are a lot of things that depend on the relationship between the company and its outsourcing partner. This is because it is a long-term business and there are a lot of things that depend on it.
You must treat your bookkeeping services partner because they will be the ones who show your customers who your company is to them. Even if you’re outsourcing back-office tasks, the work still depends on the employee-employer relationship. People on both sides of the relationship will be giving each other good advice all the time because it will be a partnership.
There are a lot of things you can do with the help of an outsourcing partner. So, keeping a good relationship is important.
4. Invest with your Bookkeeping Manager
Yes, you heard it right. Invest in your BPO manager because he or she is in charge of everything you want done. Since you are miles away, it’s crucial that you trust the people who manage your finances.
So take the time to set up a meeting where you can talk freely about how to improve your business relationships. You can also talk about other things outside of work to build camaraderie.
5. Provide Regular and Constructive Feedbacks
Constructive feedback is important for growth. If your outsourced bookkeeping team did a good job, compliment them. If not, you might need to point out where they could improve. Telling your BPO partner how they’re doing helps build a strong relationship between the two of you.
Feedback is a tool that can help people think about themselves and their work, as well as how other people see them. Even though people need to be given feedback, leaders who believe in growth need to ask for an evaluation, show them how it should be done, and be an example for them.
Tips For Improving Your Bookkeeping Processes Through Outsourcing.
Small businesses and start-ups both need to make sure that their money is properly managed, and that someone is in charge of that. Of course, you also play an active role in all of this. That’s why we compiled some tips for you to take note of to improve your bookkeeping process:
1. Embrace Technology
Many accounting software automates bookkeeping tasks that are time-consuming and error-prone if done manually. It also makes it easier to find all the information you need to make financial statements.
When most businesses start out, they use simple accounting software. As they grow and become more complicated, they may need to invest in an enterprise resource planning system (ERP). Once a company has an ERP system, it can add modules for other business functions, all of which are linked to a single database, so everything works together.
But a lot of small business bookkeepers don’t have the luxury of purchasing high-end software or hiring someone to use it, that’s why it’s important for them to outsource instead.
2. Use Your Outsourced Team For Deadline Reminders
As a business owner, you spend most of your time running from one problem to the next. With so many things to do, it’s easy to forget when you have to pay taxes, payroll, and other business bills.
You need to keep track of your own deadlines so that you don’t miss them and end up with a bad name. However, you can track deadlines with your email calendar, or even on your phone. Even writing down notes a few days before the deadlines can help you stay on track if you check your physical calendar every day.
But a secret that very few know is that you can ask your full service bookkeeping team to remind you of it. They can either call or email you about it. Some can proceed on completely handling it by paying for it. It’s like having a virtual bookkeeping assistant to help you keep track of your payments.
3. Get Free Financial Advice
Financial management helps an organization reach its goals and objectives. The main job of a financial manager is to make sure that money is spent, bought, and managed properly to make sure that the company runs smoothly.
But financial managers are expensive. Unless you outsource accounting and bookkeeping services.
Being able to get help at least once a month from a good adviser can be very crucial, especially for SMEs. They can show you how to handle your books the right way, answer any questions, and fix any mistakes that you might have made.
4. Have Them Review Your Financial Statement Every Week
When you keep your numbers up to date every week, you can always get reliable financial documents at any time. At the touch of a button, you can see your income statement and balance sheet in accounting software that is easy to use.
The best part about outsourcing your bookkeeping needs, you don’t need to do it on your own. You can have someone read it for you and only give you the gist of it.
Obviously, it makes sense to check them often to get a sense of how your business is doing. But not all the time. Your focus should be running a business, not a department.
Consider adding this to the last thing you do each week. Check your bookkeeper’s report. Run a quick meeting with them to make sure everything is correct. Then, share it with people who like to see how much money you’re making.
When you see how much money you made each week, it can be very motivating.
High Quality Outsourced Bookkeeping Services Provider in the Philippines
Magellan is the leading SME-focused Bookkeeping BPO among all bookkeeper companies in the Philippines.
With over 18 years of industry experience, we offer high-quality support and call center services. On top of that, we are a certified ISO 27001:2013 company.
We combine technology such as ACD, CRM, and IVR with agent skills to make sure that our agents have all the necessary tools, equipment, and knowledge to serve customers.
Progress shouldn’t break your bank, so we keep our services flexible and competitive.
Contact us now, and we will discuss with you how we can help your business succeed. Complete the contact form below and talk to us for FREE! Hiring a bookkeeper has never been this easy!
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