The benefits of outsourcing

 

Why outsource? Quite simply, there are only so many hours in the day and you / your team probably don’t have the bandwidth to do everything you would like to do. Outsourcing can save you time and money, but there are many other reasons to consider outsourcing certain business functions.

Outsourcing increases efficiency

If as a company, you do everything yourself, you will have much higher costs which must be passed on to customers. When you consider outsourcing, this allows your company to minimise these costs. Time gained back as a result of contracting out certain functions can be deployed in a more effective way, in order to make your business more efficient.

Control capital costs

Cost-cutting may not be the only reason for you to outsource, but it’s certainly a major factor. It converts your fixed costs into variable costs, releases capital for investment elsewhere in your business, and allows you to avoid some large expenditure. When you outsource, you can also make your firm more attractive to investors, since you’re able to pump more capital directly into revenue-producing activities.

Focus on your core business activities

Every business has limited resources, and every manager has limited time. Sub-contracting can help your business to shift its focus from peripheral activities towards work that serves the customer, and it can help your people to set their priorities more clearly.

Risk management

There is a degree of risk inherent in any type of business. However, you can outsource certain risks to the balance sheet of an external provider. For example, Payroll, Tax Returns and Compliance can largely be outsourced, thereby moving that risk away from your people and putting it on the shoulders of the outsourcing firm’s team. 

Competitive advantage

Outsourcing can allow smaller businesses to benefit from the economies of scale, efficiency and expertise enjoyed by larger firms. If you choose the right outsourcing providers, your business should be able to benefit from the latest systems, technology and processes. This could give your firm a clear competitive advantage.

 

Lotuswise Chartered Accountants and Business Consultants can help you and your business become more efficient. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.

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