The challenge to generate revenue while remaining profitable is the biggest challenge that businesses face. It is no wonder why the standard estimation for a business to become profitable is two to three years. Further to this, Sage found that small to medium sized businesses spend 71 days per year on administrative tasks such as paperwork, recruiting and accounting.
It is therefore imperative that businesses get it right, and get it right quick. One way that all businesses, including large organisations can streamline their business processes - is by outsourcing. In this guide, we provide a comprehensive analysis of how outsourcing can relieve the pressure felt by time-consuming admin tasks and allow businesses to focus their resources on growth and value-adding tasks.
All organisations have a certain number of administrative tasks that must be completed to stay in business. As identified in Sage’s report, small to medium sized businesses in the UK spend on average 71 days per year on administrative tasks. Therefore, it is important to understand which tasks are causing the most disruption.
There are different types of administrative tasks, some are more time-consuming than others and some are more important to businesses than others - which often depends on the business, their size and their industry. Of the most common admin tasks, accounting has been identified as the most time-consuming, responsible for 20% of all time spent on admin, followed by generating invoices and taxation.
Accountancy has been identified as the most time-consuming admin task of them all. It is understandable why as it is fundamental to the success of any business - successful businesses have a successful accounting team. Accounting plays a vital role and allows businesses to track revenue and outgoings, ensure statutory compliance and provide investors with quantitative information.
HR plays a key role in developing the culture of a business and sustaining that culture. It is crucial that businesses get their HR processes correct as it can have lasting impact on their employees and their employee attrition. The HR department also helps to develop and define a business’s strategy.
The most important function of payroll is to ensure each employee is paid correctly and on time, every time. To do this, businesses need to ensure they have the right payroll system and people in place. What is concerning is that 75% of large UK companies admit to paying their employees late or incorrectly in the past year.
Sage identified in their 2017 report that globally the total amount of late payments accounted to 3 Trillion US$. This can have a profound impact on a business’s cash flow which is the lifeblood of any company. Larger businesses are likely to have credit management teams and systems in place to ensure that invoices are paid, this is, however, a luxury that many small to medium sized businesses can only dream of.
In their report, Sage identified that accounting costs can be as high as £35,000 in the UK. This is a considerable amount for an SME to pay and businesses must consider how to save money on their admin. SME businesses function on very tight budgets and focusing on cost-saving solutions can provide them essential financial resources.
A staggering 50% of managers say that they don’t have time for more strategic innovations. When looking at the impact of admin, this is something that should not be ignored. In face, research has highlighted that an increase of just 5.6% in productivity could lead to an increase in GDP of £33.9bn each year.
The amount of time spent on accounting by a business has a detrimental effect on their performance. It is crucial to approach this matter in the most appropriate way for the business. SME businesses will be well aware of the time dedication required from financial management in business.
If your business is struggling with an admin workload, you need to find a solution, and the right solution for your business at that too! Thankfully, there are several options to efficiently resolve your admin headache.
Outsourcing your admin is a trusted and efficient solution for many businesses. It allows you to delegate tasks to an outsource company who will then handle all of your admin tasks for you. Outsource companies often charge you by the hour and record how long each task takes to the exact minute. Meaning you only pay for productive time!
Read more about why you should outsource.
To find out about the financial savings of outsourcing business admin, read our report on the financial impact associated with the cost of salaries and employee benefits.
Benefits of outsourcing reach further than financial benefits, they also include the guarantee that an outsourced supplier will provide a fully trained individual who will be managed directly by the supplier. This provides businesses with a wider range of advice, insight and industry knowledge from the outsourced supplier.
Using an outsourced bookkeeping company to prepare your financial records will guarantee accuracy and integrity. Whether a business owner needs to provide financial statements to the bank, satisfy investor reviews or share information, outsourced bookkeeping services help make sure there is no doubt about the data.
The benefit to SMEs is the flexibility and scalability offered by outsourced services. Start small and build up. Often, small businesses cannot justify employing a full-time administrative assistant or bookkeeper as the cost of salary outweighs the benefits for the company. Bookkeeping packages are based on the number of hours per month required and can be a valuable option for business.
If you are looking to tackle your admin workload by outsourcing, there are more tasks that you can outsource than you might think! There is no longer a need to be in the office to complete admin tasks and most tasks can be arranged online.
Here is a complete list of all admin tasks that can be outsourced:
Before handing over the reins, be sure to choose the right supplier for you. While it is easy to source plenty of suppliers, the selection process is vital and will ultimately determine whether your outsourcing efforts will be successful.
A good place to start is the credibility of the supplier. Do they have positive reviews and how does their web presence look? Trustpilot provides complete transparency of businesses and will provide insight into what it is like to use that outsource supplier. Once you have found a supplier, communicate your expectations and the steps included in the job clearly. After all, when outsourcing, your supplier should do everything to make sure that you are happy with the service. If they have a clear idea of your expectations, they will meet them.
Finally, now that your outsourced supplier is in operation, it is time to take a step back and relinquish control. Your new team members will integrate into your business and your business will experience change. Do not micromanage all your outsourcing, as the saving in management attention will be lost.
Want to outsource your admin today? We would be delighted to hear from you.