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Introduction
No one knows your business as you do, and your business has plenty of functions that don’t fall into your core competencies. By outsourcing these non-core business processes and compliance-related tasks, you can easily reduce complexity in your organization by shifting your organization’s:
- Focus on activities that provide the most value to customers and increase competitiveness in the marketplace.
- Internal resources on core operational tasks instead of dealing with the headaches of non-critical business processes.
This blog series describes how to choose to outsource non-core business processes and compliances. Read on to learn why outsourcing these functions will save you time and money, give you an edge over the competition, and help your business succeed.
A Deep Dive into The Non-Core Activities Of A Business
Large enterprises have been divesting themselves of non-core activities and operations for decades to focus on activities that support their strategic vision and core business strategies. An organization should focus its efforts on the core competencies that deliver the most value to its customers and maximize return on investment (ROI).
Today, business leaders are taking a very close look at their end-to-end processes to analyze what is best kept in-house and what an external professional service provider can handle more efficiently & cost-effectively. Some of the areas that should be considered include:
1. Finance & Accounting (F&A): From the F&A perspective, the most common non-core activities typically include functions such as billing and records management, accounts receivable and payable, collections, transaction processing, etc. The following are some of the non-core finance and accounting processes that are usually outsourced:
- Order processing
- Invoicing Customer
- Period closing and year-end closing
- Reporting
- Vendor management
- Invoice and payment processing
- Master set-up and maintenance
- Calculation and posting of depreciation
- Capital budgeting support
- Journal entry processing
- Account and bank reconciliations
- Fiscal period and year-end general ledger closing
- Consolidations/eliminations
- Cost accounting
- Payroll accounting
- Financial statement generation
- Project reporting
- KPI reporting
- Management reporting
2 . HR & Admin: The following are some of the common HR & Admin management processes that are outsourced:
- Recruiting and retraining according to business needs: Hiring qualified employees who match the skills and align perfectly with the company’s vision and mission. The external professionals can easily place the right candidates and manage their training including upskills and cross skills.
- Maintaining timelines for salary disbursements and statutory compliance.
- Ensuring employee benefits, including employee reimbursements as per income tax regulations.
- Maintain MIS and Analytics for payroll and employee benefits, as well as standardize reports for better decision making.
- Maintain employee health insurance plans.
- Prepare attendance
- Prepare quarterly, annual, and employment reports.
- Stay up to date on company policies and comply with their regulations.
- Ensure personnel account balances are accurate.
- Take care of payroll issues and resolve errors
- Effectively manage payroll staff.
- Monitor promotions and advancements, transfers, and terminations.
- Other HR administrative tasks
3. Inventory Management: Rather than investing in their fleet and ensuring that it operates at maximum efficiency, companies often rely on professional, third-party companies to provide comprehensive inventory management and inventory verification services in India. This has the following advantages for them:
- They prevent funds from getting stuck in dead inventory
- Physical verification of inventory-arranging inventory in the warehouse
- Barcode numbering & adjusting the supply to customer’s ordering needs
- Ensure timely and appropriate delivery of raw material to production/supply chain
A Long Way Forward
Outsourcing, therefore, helps you to focus on your core competencies saves you time and money, and gives you an edge over competitors who are still stuck doing everything themselves. Who would not want that? Not every process in your business needs to be done in-house, or you may miss out on the power of outsourcing. Outsourcing business processes that are not part of the core business contributes significantly to increasing efficiency and reducing costs. This is where Compliance Outsourcing Financial Services Company plays an important role.
The key to success, however, is understanding the intent behind outsourcing these activities. Above is a wide range of tasks you should outsource if you need help performing these functions. Read on in the other blogs in this blog series, where we will analyze other non-core business processes that could be successfully outsourced to preserve the essence of the core competency