Outsourcing Bookkeeping Services in Uganda
What Is Outsourcing?
Generally, outsourcing is another form business practice of hiring a party outside a company to perform services or create goods that were traditionally performed in-house by the organisation’s own employees and other staff. Outsourcing bookkeeping services in Uganda is becoming a wide practice by SMEs as a cost-cutting measure. As such, it can affect a wide range of jobs, ranging from customer support to manufacturing to the back office. However, the most outsourced services are related to the following.
- Bookkeeping Services
- Training and Recruitment Services
- Internal Audit Services
- Marketing Services
- IT Services
So, back to the gist of the matter, “What is outsourcing bookkeeping?”
Outsourced bookkeeping is when a company hires an external firm or individual to handle its books of accounts through recording the financial transactions of a business and preparing financial statements, such as balance sheets and profit and loss statements.
Why should SMEs in Uganda outsource bookkeeping Services?
When people think about outsourcing their bookkeeping, the first thing that comes to mind is cost savings. Some companies, especially small ones, can’t afford an in-house accounting department or a full-time bookkeeper. An outsourced bookkeeper has experience working with different types of businesses and their systems, so they can help your company organize its books without additional costs. Below are some advantages of outsourcing bookkeeping services:
- Reduced costs: You can save a huge percentage of your budget by outsourcing bookkeeping services. You won’t have to worry about hiring a full-time bookkeeper or spending money on software you don’t need, and training new recruits, allowing you to focus on growing the business and improving its operations rather than dealing with financial paperwork or documentation.
- Increased productivity: Your employees will be more productive when they’re not bogged down by tedious tasks like calculating taxes, preparing reports, and reconciling accounts.
- Attract technical expertise: Bookkeepers have experience and exposure to many complex accounting techniques and systems as well as emerging trends and therefore provide value to their clients.
- Recruitment hurdles: Many SMEs are facing high labor turnovers since a high number of the recruited staff are always looking for greener pastures but not experience or desire to grow their career with these organizations but rather better paying jobs. Therefore, outsourcing bookkeeping services assures the organization full commitment from the service provider.
- Save time: Many SMEs consider bookkeeping as time consuming thus prompting many to do it when the arises but with outsourcing, the burden is shifted to the outsourced bookkeeper.
In addition to saving time and money by not hiring full-time employees, an outsourced bookkeeper can provide additional value by offering specialized expertise. Outsourced bookkeepers can are hired on a contract/ retainer basis or as full-time staff members if they are individuals.
How Do You Know When to Insource or Outsource?
SMEs may decide between insourcing and outsourcing when recruiting a team of individuals based on their need to complete a specific project or assignment that might be both short-term and long-term. Deciding to complete the work internally or contract it to another company might depend on several factors, such as costs and expertise. Understanding the differences between these two concepts can help organizational leaders make more informed decisions when selecting qualified experts for handling their business requirements.
In this article, we compare insourcing and outsourcing, including their definitions and primary differences.
Insourcing: This is defined as the process of recruiting an internal/ existing employee to perform the task at hand and basically, this employee has the preferred skills and experience to perform the role efficiently.
Furthermore, Insourcing can also be done externally. Here, the SME decided to recruit a full-time employee with the required skills and experience to perform the assignment. In addition, the company doesn’t have to incur any training costs for the newly hired staff because of their impressive professionalism.
When to Insource or Outsource Bookkeeping Services in Uganda?
As a decision maker for any organization, it’s prudent that you observe and understand the dynamics of the market you are operating in before it’s too. In this case, managers ought to always devise business continuity mechanisms that ease the operations with a long-term strategy.
Therefore, as a manager, you should consider whether to outsource or source upon critically analyzing the business environment you are operating in and what are both the financial and non-financial targets you intend to achieve as well as it needs. Finally, in the perception of bookkeeping practices, it is especially important that financial management teams are well-equipped and have information that can be used to make critical decisions that influence the strategic growth of the organization in real-time.