Accounting outsourcing – debunking the myths

The term outsourcing seems to conjure certain images and thoughts in the business mind, often not positive and invariably along the lines of loss of jobs, unsecure work processes and poor communication.  In the end it boils down to one human emotion, fear.  How interesting is it that an industry such as accounting, which is based primarily on numbers and repeatable processes can be swayed so easily by emotion.

Loss of local jobs

Accounting outsourcing has been around for over 20 years now, and it doesn’t look to be slowing down anytime soon.  However, there is still quite a stigma attached to companies that outsource.  The number one argument being that outsourcing takes away jobs and while on the surface this seems like a legitimate claim, all aspects should be considered in depth before forming a conclusion.

Why would a company who outsources have to cut their staff?  The majority of companies looking to outsource do so because their existing staff is overloaded with work and they are unable to grow.  Once a company has started to outsource they will suddenly have resources freed up and are likely to use this extra resource, whether it is workforce or capital, towards further expanding the business.  Expansion in business creates new roles with new responsibilities.  Expansion also allows the business to take on more clients, which in turn generates new jobs locally.  Research by Ryan P Daley of the experience of American accountancy firms using outsourcing demonstrated that more firms that outsource increase their workforce than decrease their workforce.

Data security

Another issue that gets brought up as an objection to accounting outsourcing is that data will be unsecure once outsourced.  Ag