Any experience with outsourcing?

Hi- I'm an independent accountant with 3 bookkeepers in my office. A
company has been offering to do my low level bookkeeping for half what
my employees cost - They give me a multi-document scanner which sends
my work them directly to them. This could double my net, so I'm
tempted. Does anybody have any experience with this sort of thing?

 

In doing so you will be putting 3 people out of work, think long and
hard about that.

 

Remember, you are still liable for the quality of the work that "you" do,
and by that I mean your clients will hold you responsible.

Secondly, you have a duty to secure your clients private financial data.
Are you sure you accomplish that by outsourcing their private financial data
to someone you don't have control over?

And third, you have a legal obligation under federal law to disclose to your
clients that you plan to send their private financial data to a third party.

Frankly, you will find that when you explain to your clients who will
actually be doing the work, and who will actually have their data in hand,
and that you actually aren't doing what they think you are doing for the
fees you are charging................

I wouldn't do that to them.

 

Time to wake up and smell the coffee. Companies like HP/Compaq/
Dell/etc. looked at outsourcing, yeah it would put a lot of people out
of work, but the idea was so tempting they dove in head first. As a
result for every 2,000 jobs shipped over to India another
1,000+ jobs were lost here.

So many companies looked at the situation, considered the
good and bad points and dove in head first to pink slip their
employees. The result was that for every job here in the US
they were shipped overseas and employed 2+ people.

So yeah HP/Compaq/Dell/etc. thought long and hard about it,
and said to their employees don't let the door hit you on the way out.

 

Who is to say your data is any safer at a CPA firm in the US as
opposed to a CPA firm in India?

If you think your data is any safer in the US just ask how safe
the data was that many identity theft victims had stolen from
xxxxxx bank/credit card processor/etc.

When you go to xxxx CPA firm and they do CPA services for you
how do you know who is doing it? It could be an employee in the
next office, it could be someone five miles away, or it could be
someone ten thousand miles away. When you have xxxxxx CPA
firm doing your work you don't what grunt is doing it and where he
is doing it.

And if you beleive xxxxxx who owns the xxxxx CPA firm is doing
all the work himself i've got a bridge in Arizona to sell you.

 

You ask.

It could be the person across the desk from you.

ASK.

 

Been there and done that... particulary with HP.

I'm still for keeping the jobs and wealth on this side of the pond...
North America that is. Outsourcing and staff reductions are not always
the miracle solutions because the ramifications sometimes take sometime
to trickle down, and often by the time they do it is too late.

The bottom line isn't always the buck... and while immediate savings are
very appealing the long term big picture results might not be so pretty.

HP have been through some very rough times that may not have always been
evident to the general public over the last 10 years.

 

Thanks for your comment. These people have become my friends too, so
what I thought to do was to only outsource new work, and work peaks for
now. IF the service really works AND IF one of my people leave for
their own reasons, only then might I consider reducing my in-house work
force. Does that seem resonable?

 

This is only the beginning....

There is so much outsourcing going on with accounting that it isn't
even funny. It's more common than people like Paul Thomas or Joe Canuck
think

And it's also why accounting is a horrid field to get into. It's not
only declining (and has been for years), but the internet and the
outsourcing it accelerating this decline rapidly.

 

Thanks for your comments, Barrnabas. I'm concerned about the good (or
harm) of outsourcing too, and I'm not clear if it is good or bad for us
(i.e. the USA). Our exports are dropping because we aren't competitive
in many international markets. Perhaps something that helps American
companies lower their costs might be good for us.

In view of my not being able to reach a clear conclusion about the
"morality" of outsourcing, I might just decide on the basis of what is
best for my business. Does that seem resonable?

 

Two questions, Joe:
Do I understand that in your view, outsourcing to Canada or Mexico
might be OK? I guess that sits well with me as the Canadians are like
our brothers, and giving Mexico some work might be better than Bush's
wall!

My company is very small, and I know it's books intimately. There
should be no trickling down: I'll see the results immediately. Did I
miss your point?

 

I disagree that Accounting is declining. Tax laws and red tape are
accelerating, and with it need for people in the know. Bookkeeping may
go offshore, but in my opinion, we Accountants are as safe as Lawyers:
No Indian can know our laws or my clients or be able to give them the
face time I can. I don't fear the Indians, I might fear another
competent Accountant whose costs are much lower than mine.

 

Yes, very!

My hat is off to you for being one of the good employers.

 

Thanks for your comments, Paul. I am responsible today for the work my
bookkeepers do, and I check their work closely. Nothing changes there.

I've read the AICPA Ethics Rulings, and agree with them entirely. Note
that this outsourcer will NEVER have overall access to my client's
books, so I'm being even more careful than the AICPA requires.

Trust is the Core of an Accountant's business, so I would NEVER risk my
client's trust to lower my cost. If I give this a try. it will be only
with the full knowledge and approval of select clients.

Your final comment "I wouldn't do that to them" is moving... What would
they get from this? My hope is to pass a portion of my savings back to
them.

The lower costs outsourcers enjoy is scary: If this works I would turn
outsourcers from potential enemies into potental allies. What do you
think?

 

It seems to me that compartmentalizing the information gives resonable
security: IF this works, I'm thinking to use a distinct outsourcer to
work each area: Like Canada for Payables, and Mexico for Receivables.
Or maybe I'm just building castles in the air...

 

Today Carol outsources her bookkeepers, tomorrow her clients outsource
her.

 

Some of the most intelligent and hardest working people I have met
have been Indians. In fact, of the hundreds of professional women I
have met, the two most intelligent have been Indians. With the
emphasis their nation is putting on a really good education and
offering offshore services to North America and Europe, I don't agree
with you. I would say you are in great peril.

BTW, no one has any viable valuation of their "face time" unless it is
evaluated by an outside expert. It is shocking how many businessmen,
not just accountants, hang on to their clients simply because the
clients are too lethargic to change. Within the next decade it will
be interesting to see how many of you peoples businesses survive when
they are up against highly aggressive sales force selling high quality
Indian accounting, tax, and consulting services. From what I have
seen, I am putting my dime on the Indians.

 

There was a trend toward outsourcing (not necessarily off-shore--
there are companies in the US that take that kind of work, too). In many
cases it turned out to be very difficult to factor work in the office so
that it can be done in isolation and without supervision according to a
standard recipie, and a lot of that work was returned to the parent
company, and from what I recall reading the trend has slowed or reversed a
bit. Bringing it offshore has additional problems with communication,
verification, and security.

I haven't saved any of the articles I'd read about it. But researching
this should certainly go beyond a Usenet query.

 

If you are right, Ron, the trend would seem to be impossible to stop,
so....would I survive longer by outsourcing my bookkeepers today?

 

The bottom line is the only jobs that can't be outsourced is flipping
burgers at McDonalds, bagging groceries, etc.

Oh and any job that can't be outsourced, they can just bring
in an illegal alien to do it at 10 cents per hour.

The US of A is about to become a third world country.