Outsourcing Financial Activities
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Outsourcing Financial Activities
CIS/568 Information Systems Concepts
Introduction
Financial and accounting activities are essential to any business. However, they are often are considered ancillary and unrelated to core strategies. Some companies choose to outsource a portion of their financial activities to third party vendors. This strategy allows them greater focus on their principal operations and goals.
Outsourcing provides distinct advantages but also carries distinct disadvantages that are often overlooked. For smaller business in particular, advantages and disadvantages must be carefully weighed, especially when considering whether or not to outsource internal audits.
Knowledge of Best Practice: Auditing firms are experienced in many business practices and often possess keen insight into how processes can be most efficiently and effectively performed. So these firms can provide valuable business recommendation to clients.
Reduced Downtime: Auditing firms also help companies reduce the amount of nonproductive downtime between audits. Specialized auditing staffs need to be retained on a full-time basis.
Reduced Staffing Costs: In additions to reducing downtime for specialized audit staff, outsourcing helps companies avoid the hiring and training costs requirement to retain competent audit staff.
The Solution
The cost of outsourcing is not always low. Some audit firms are very expensive. But the costs are not the only concern. One financial point that is careful when selecting a firm. Turnover can be pretty high in the accounting industry. Firms are often hiring new personnel, who may not have any actual on-the-job work experience. You need to watch for.
Which bring the company to final concern. Even