Outsourcing is one of the most important strategies in the growth and development of company organizations in today’s commercial environment. Outsourcing is obtaining office paperwork and financial record upkeep from organizations both within and outside your country. These outsourcing companies have a vast workforce that can efficiently do your office job. The wonderful thing about outsourcing firms is that they work and provide precisely when you need it. And the task is completed with speed and correctness that no other individual accountant can match it.
A Profitable Method of Managing Paperwork
Shrinking profit margins and ever-increasing competition across industries are driving more businesses to outsource back office tasks, allowing them to focus more on core company functions. Aside from these factors, the sustained global economic recovery and shifting laws pressure financial institutions to use outsourced models to reduce risk and costs. With the recovery still underway and the shifting economic situation, it is projected that more businesses, particularly in the back office, would continue to use outsourced models.
Back Office Outsourcing Is Increasingly Popular in Industries
- A report from research and consulting firm Markets and Markets found that US banks are outsourcing bank office processing duties at an increasing rate, with growth estimates of $67.2 billion in 2015, up from $38.1 billion in 2008, with IBM (NYSE:IBM) and Accenture (NYSE:ACN) dominating the bank back office outsourcing market. Banks like HSBC (NYSE:HBC) have been looking into fund back office outsourcing in China, while others like Citigroup (NYSE:C), JP Morgan (NYSE:JPM), and Bank of America (NYSE:BAC) are also planning to outsource back office processes to India, indicating that Markets and Markets’ prediction may be correct.
- Meanwhile, the asset management business is following banks’ path, with growing regulatory costs and more competition among asset management firms putting downward pressure on profitability. The Financial Times reported on February 6th that, according to a study conducted by Accenture and RBC Dexia, more than half of asset management companies surveyed expect their return on equity to fall below 15% this year, down from the average of 20%, prompting more of these companies to outsource non-core business functions.
- Morgan Cole’s contract with Integreon demonstrates how law firms are trying to outsource back office activities. Integreon, a legal process outsourcing business, has agreed to handle the law firm’s library and information service. Integreon’s head of global sales, John Croft, had this to say about the deal: “The fact that another legal firm has joined the centre is simply another indicator that more businesses are discovering that outsourcing some aspects of their support services may be more cost-effective. This is especially true for library and information services, where having access to a greater choice of materials at a lesser cost is a major benefit.”
A company’s back office zone is responsible for all time-consuming paperwork, paperwork, financial, and insurance record keeping. Most specialists hired in firms to handle these jobs get lethargic by midday, and the monotony leads to the poor work quality. So, back office support services have become indispensable for all sorts of businesses, large and small. Outsourcing companies use specialist software to aid with the time-consuming bookkeeping and paperwork.