OUTSOURCING

According to the English translation, outsourcing means «attraction of foreign resources and sources». Its main meaning - transfer of routine and non-specialized processes to a third party that makes it possible to save own labor resources for more important business objectives.

Still not long ago the meaning only applied to industrial processes. The largest western manufacturers of equipment, clothes and other goods transferred their lines of production to the countries with a cheap man power focusing their attention on the solution of strategic and innovation purposes. Lately, not only abroad but also in Kazakhstan a kind of outsourcing such as an accounting one gains still more popularity. Transfer of accounting and tax accounting to a specialized company for the purposes of management is done both wholly and partially subject to the specificity of business of a company, its objectives, the number and qualification of its personnel, and the budget.

Thus, who needs it and why?

Different enterprises transferring its accounting matters for outsourcing are motivated by different reasons. Let's consider such economical management by several particular examples.

Example 1

The company “ А ” is a small one, which provides services, a volume of basic accounting documents is minor.

Objective: a skilled accountant is required but for low remuneration of labor. Plus equipment of a workplace, subscription to a specialized literature and reference information bases, an accounting automated program.

Solution: in this case, it is expedient to transfer business accounting and tax accounting to a third party. As a result, the transferring party bears no material & technical expenses and reduces its tax and accounting risks transferring this function to competent specialists for management.

Example 2

The company “ В ” is a typical representative of a middle-scale business. There is a sufficiently large volume of basic documents.

Objective: 2 accounting specialists should be available in the company - an accountant for basic documents and a head accountant. The problem consists in a constant change of a head accountant, who is not motivated with an adequate remuneration of labor. What is more expedient in such situation? To take a head accountant on the staff, or transfer this function to a third party?

Solution: in our opinion, there is a sense in remaining an accountant at an enterprise, who processes source information, and to transfer a function/duty of the head accountant for outsourcing. What will a businessman obtain as a result of such solution of the situation? Firstly, minimization of risks of accounting errors. The outsourcing company has always an internal auditor inspecting the work of accountants; jurists who may help in solving a problem legal situation. Secondly, very often in taking a decision as to whether to present accounting matters for outsourcing or not, the director begins to compare the cost of outsourcing services with a salary of the own employee of such enterprise and that is wrong in principle. The cost of services may be about 5-30% higher than the salary of said accountant, but one should never forget things such as costs for a workplace, software, literature, recruiting, rent of space (premise) occupied by such accountant, and for errors, which occur much more often in case of accounting by the own employee of an enterprise.

Example 3

The company “ С ” is a large holding structure consisting of several enterprises, which conduct different activities.

Objective: To reduce accounting (and to get rid of duplicated functions too), to optimize an accounting and tax accounting system and tom improve its quality, to optimize managerial actions in case of reorganizational changes, and to concentrate efforts of the top management on the principal activity.

Solution: One of the variants to solve a problem – to transfer one or several subsidiaries for accounting outsourcing. It is more expedient to choose companies with complex accounting transactions, which require a high professional competence of an accountant.

Example 4

The company “D” is a big industrial enterprise with a large financial & accounting department. The problem is in a constant professional non-compliance of accounting personnel with the set objectives. The accounting and tax accounting is not optimized, as a result, the company has high tax risks and charges.

Objective: to optimize operation of the financial & accounting department.

Solution: as one of the variants to solve a situation – to transfer the whole accounting and tax accounting to a third party. The outsourcing company fully assumes formation of accounting and tax accounting of the company in the organization, and forms a structure of the accounting & tax department, introduces automation into workplaces, the personnel of the company-provider works within the premises of the company-customer, and al labor relations are effective only with the outsourcing company. As a result, the customer obtains a fully formed accounting department, the functioning and control of which is executed by the outsourcing company.

Foreseeing objections and questions on the part of the readers' audience, we'd like to give here the main objections to the outsourcing and to offer our own argumentation:

Objection 1: the outsourcing is more expensive than to employ the own accountant.

Answer: Firstly, this is not always the case. In particular cases, accounting by a third party may be cheaper. In addition to it, it is necessary to count all expenses for equipment of a workplace and functions, which will ensure a normal work of an accountant.

Objection 2: An outsourcing company does not know specificity of one or another business.

Answer: When choosing a provider company, one should take interest, whether there was experience in accounting of such organizations or not. Moreover, outsourcing companies bear full responsibility for its obligations assumed, and, first of all, in their own interests to find an accountant for the accounting of the enterprise having an appropriate professional experience. Otherwise, the outsourcing company will pay not only its own money but pay off with its reputation.

Objection 3: Loss of confidential data.

Answer: The outsourcing company is fully liable for its obligations assumed and signs a respective agreement of non-disclosure of in-house information.

Objection 4: For big companies it is not expedient to transfer accounting matters for outsourcing, since the efficiency of accounting and exchange of information will be reduced and the control be lost.

Answer: this is a mistake. An outsourcing company has used technologies for the establishment of an accounting department and its operation. In this case, a notorious human factor is excluded as outsourcing companies fully assume not only professional but all organizational & managerial matters. The director of a company gets an opportunity to fully concentrate himself on the principal activity without going into the heart of accounting matters, relations with the tax authority etc., that will be fully assumed by a third party, which will be liable for these solutions. The personnel of such outsourcing company operate within the premises of an enterprise, but again all labor relations are regulated by the company, which renders services. Therefore, used work technologies and exclusion of a human factor are the main advantages of this kind of outsourcing.

However, in spite of the fact that many Kazakhstan top managers are not prepared to let part of business processes out of their hands and entrust them to a third party, statistical figures prove the other things. Lately, more and more companies begin to delegate their non-specialized directions of work. First of all, this is due to the fact that domestic companies seek to ensure the transparency of their business process, the increase in business efficiency due to the transfer of the said non-specialized directions to the experts in this field, the increase in the business attractiveness in the opinion of foreign investors and partners as well as the reduction of costs, which would have been incurred if to develop one or the other non-specialized direction.

 

 

 

Contact us

Address:
ave. Al Farabi, 19
o. 401, 4th floor, Business Center Nurly Tau 2B,
050040, Almaty, Kazakhstan

Tel:

+7 (727) 311-08-91
+7 (727) 311-08-96
+7 (727) 311-08-97

Mobile:

+7 (777) 022-22-38
+7 (777) 588-52-88

E-mail:
info@maconsulting.kz

Свяжитесь с нами через Skype





Курс доллара США к тенге в Республике Казахстан
Курс евро к тенге в Республике Казахстан
Курс российского рубля к тенге в Республике Казахстан