Outsourcing Finance: What Are the Pros and Cons for Our Realty Firm?

Dear All, I am working as the HR Head in the realty sector. Our organization has decided to outsource the finance and accounts department to a chartered firm. I need suggestions on the same before taking further steps.

Questions on Outsourcing Finance and Accounts

- What can be the pros and cons of outsourcing such an important department like finance and accounts?
- Should we go for outsourcing the entire thing or is it better to opt for shared service?

Please suggest.

Regards,
DG

I know I am replying a bit late, but still, a nice question. I tell you there are various considerations. The discussion has to be at length. Major factors are the size of your company and the management philosophy.

In the case of a mid-sized company, control for these areas should not totally be left to outsiders; however, the natural benefit of outsourcing should be used by outsourcing part and selective processes.

In the case of a very big company, they generally outsource the clerical part of it, and the managerial and decision-making content remains with the company. But there the outsourcing is quite structured. So, there also it's part outsourcing.

Now in the case of small companies and firms, there can be total outsourcing.

I would always suggest going with an outsourcing company that does outsourcing but carries out the same intelligently and not like a blind person.

Regards,
Subhash

Any outsourcing initiative will have its own pros and cons. In general, outsourcing is done for non-critical tasks that are time-consuming and where no value is being added by management, such as bill processing, etc.

It is the choice of management to decide, with an understanding of the outcome modalities, before finalizing, as any sensitive information or data being accessed by an outsider can be more devastating than if handled by an insider.

Hope this answers your query.

Regards,
Partha

Advantages and Disadvantages of Outsourcing

Outsourcing is a common practice among MNCs these days. In your case, the advantages and disadvantages are as follows:

Advantages:

1) Internal control will be good if internal staff are making money.
2) Internal staff are not required to handle daily transactions.
3) If management and organization differ, outsourcing may be better than handling internally.
4) No need to hire employees and save on statutory compliance.

Disadvantages:

1) Confidentiality of your data.
2) If the outsourcing company does not work on a daily basis, it may create problems.
3) Response time of the outsourcing company.

Regards,
S Umesh & Co
CA firm
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