7 Outsourcing questions answered in seconds

7 Outsourcing questions answered in seconds

By Barbara Rolls, EDMCA Pty Ltdused


Let’s start with the obvious.


1. What is offshore outsourcing?

Outsourcing is the management and/or daily execution of a business function by a third-party service provider. Outsourcing can be a handy way for firms to free up resources to focus on core competences. There are many different outsourcing models, including the outsourcing of activities to firms in foreign ‘host country’ locations. This is called offshoring and is the focus of our business model.


2. What can be outsourced?

Outsourcing is being utilised in the following functional areas:

– Human resource management;

– Finance;

– Inbound logistics;

– Information technology;

– Production;

– Marketing; and

– Outbound logistics.

Finance functions that can be outsourced include:

– Accounts payable;

– Accounts receivable;

– Financial statement preparation;

– Payroll;

– Budgeting;

– Taxation; and

– Superannuation fund compliance.

In our business we assist our clients (usually accounting firms) to outsource their own clients’ financial statement preparation, taxation compliance and self-managed superannuation fund compliance.


 3. Is outsourcing becoming a mainstream business practice?

Offshore outsourcing of finance and accounting services alone comprises 20% of the approximately US$483 billion global business process outsourcing (BPO) market (Plunkett Research Ltd 2013).The total BPO market is expected to increase at 5.7% per year (IDC, 2013).

In the last five years, offshoring has shifted from being a niche strategy to a dominant one used by a number of firms. The extent of offshoring varies according to characteristics of the firm (e.g. the larger the organisation, the more likely the firm is to outsource) (Carey et al, 2006).


4. What are the threats to your firm from offshore outsourcing?

Accounting firms and businesses that outsource offshore can achieve significant cost savings.  As a rule of thumb, the labour costs of meeting compliance objectives can be halved with firms who outsource.  There’s your threat.


5. How can offshore outsourcing benefit your firm?

Offshore outsourcing lowers a firm’s direct costs, thereby increasing its profit margins. Existing human resources can be deployed to add other value-add services such as business and taxation planning, and advisory work. This can be achieved within the existing budget for each client engagement.  The end client gets more for their money – win.

Alternatively, the cost savings to the practice can be passed onto the end client. This gives the firm an enormous competitive advantage.


6. Is offshore outsourcing disruptive?

Our service is not client-facing. Client in this context means the end client, or the ultimate user of the service.  Our staff do not interact with the end client.  Our clients are typically accounting practices.  We do not interact directly with our clients’ clients.  This ensures that the experience of the end client is as seamless as possible. In a typical offshore outsourcing arrangement, our client remains responsible for the client-facing functions such as the gathering of client data, advising clients, and client relationship management.  We take our instructions from our clients.


7. Is the quality of the work of an acceptable standard?

Quality standards are achieved in two ways.  Firstly, our offshore staff are degree qualified with post-graduate qualifications. They are trained exclusively in a narrow area, such as Australian taxation compliance. They are supervised at all times by an Australian Chartered Accountant who is present at the offshore location.  Their work is also reviewed by an Australian Chartered Accountant before being remitted to our client for further review.

Secondly, our clients will apply their own review processes to the outsourced work.  Any defects noted will be brought to our attention for prompt correction.



Barbara Rolls, an Australian qualified Chartered Accountant, is a founding member and Director of EDMCA Pty Ltd. She also heads the India subsidiary EDMCA (India) Pvt. Ltd. and currently lives in India.


To read more articles and whitepapers like this, head to the Free Resources tab on our Services page.

Written by HowNowHQ View all posts by this author →

HowNow is the leading email and workflow management software for accountants across Australia - and now we're available worldwide! Our new cloud software creates a frictionless end-to-end workspace for ultimate client service. We’re not just leaders of smooth business – we’re leaders of the future.

Leave a Reply

Your email address will not be published. Required fields are marked *