Mynd Solutions

For years, companies have outsourced their Business Processes such as Finance and account management, Human Resource (HR) management, tax preparation, legal assistance, financial portfolio management and CRM.

Nowadays many companies are outsourcing their core functions, so they can relocate their time, money and other resources to strategic business activities. What was attractive to smaller businesses has expanded to larger businesses that now see outsourcing as a wise and workable choice to maximize business process and finally enhance the bottom line. Nevertheless, outsourcing isn't for everyone. It is important that businesses take the time to comprehend and evaluate the pros and cons involved, such as: - Cost-Benefit ratio - Potential Risks Involved - Service Level Agreements  - Important controls When considering whether or not to outsource the Business process, one must set their expectations upfront. There are several factors to think about before taking the decision to outsource: -  First, do a cost-benefit analysis. Compare the cost of keeping up the finance department in-house, considering costs such as wages, benefits, training, office space, equipment, etc to the total expenditure of employing an outsourcer to achieve the same goals. -    All costs related to outsourcing must be clearly documented in the written arrangement so as to reduce the prospect of hidden costs. -    It's best to be upfront about the mutual expectations, like deliverable's and deadlines. The more detailed and particular the agreed upon terms are, better the chance of avoiding unforeseen costs down the line. -    Company management needs to ensure they're comfortable with the arrangement and it won't impede their regular path of business. -    In case of a finance department outsourcing arrangement, it's particularly important to clearly comprehend and agree on how any applicable data is obtained, how often, what format it's in and who can access it. -    The level and range of solutions the possible outsourcer supplies is another area to contemplate. Given that there are probably other clients jostling for their time, it's crucial to comprehend how resources are allocated to ensure deadlines are met and that someone is always available to answer any questions or concerns.

Most HR departments have to work with external vendors, such as medical health insurance agencies or payroll companies, but the various vendor databases and applications programs are not connected in any manner. The internal HR department generally has to inquire with various databases, which takes up their valuable time. Web self-service is a type of e-support. It allows the customers and employees to access the information and perform routine tasks over the Internet. This will eliminate the need for interaction with the representative. Web self-service is widely used in employee and customer relationship management (CRM). It is a one-stop website that encompasses all employee info can save everybody’s time and energy.

 Gives Clear Career Pathways - instead of being dependent upon your department heads or supervisors citizenship status, accrued vacation time and retirement workers develop career development programs or encourage star workers, an integrated system provides yourself to take the initiative to assist in their own hands. All the HR representative must do input distinct training classes alongside other prerequisites, and workers can take web-based courses or register for individual classes to satisfy the criteria for next steps for their livelihood pathways.

Aids with Consistency - At an integrated HR tech alternative, you can join your performance reviews and compensation databases collectively.

For example, the Human Resource planner can input clearly defined task competencies for each place into the system. Throughout the performance evaluation time, each employee is evaluated against these predetermined competencies. You may also compare employee salaries, in addition to which each employee is assessed against these predetermined competencies everybody is getting paid fairly.

Ensures Compliance - Many integrated HR tech solutions feature online Ensures Compliance. W-4 and I-9 forms, your federal forms are established for tax withholding and employment eligibility verification.

Customer Relationship Management is a process most businesses use to comprehend their customer groups and their shifting desires. Customer relationship management technologies allow companies to accumulate and handle a substantial amount of customer data and after that execute strategies based on that info. Companies aim to retain their valuable customer’s and maximize the effectiveness of every customer interaction – whether it's related to sales, marketing or service. Data collected through focused Customer relationship management initiatives aids companies to solve specific issues throughout their relationship. CRM related information also provides businesses with significant and new insights in regards to the needs and behaviour of the customers, allowing them to tailor their products to meet the requirement of the targeted client segments.

CRM related issues have a large impact on client satisfaction and loyalty, whereas having a proper solution for these could result in exceptional financial rewards and competitive edge.

-Evaluate whether and what kind of Customer relationship management data can fix those pain points.

-Calculate the value that such info would bring the company.

-Choose the appropriate technology platform and figure out the cost of executing it and coaching workers to utilize it.

-Assess whether the advantages of the Customer relationship management info outweigh the expense involved.

-Design incentive programs to make sure that employees are urged to take part in the Customer relationship management program. 

Finding the perfect resource for the job could be quite prolonging generally. But not with our RPO solutions.

Contents

* Summary * Problems and issues * Background of the issues * About the client * How we arrived at the solution * Conclusion

SUMMARY

The grail of business being very volatile in nature is always exposed to a high degree of risk. It is therefore imperative for businesses to address the uncertainty in their environment with the help of the workforce around them. When there’s a leaner work force structure, it is easier for the HR to implement change management programs in the company. However, the HR faces a challenge to adhere to the agreed policy norms in companies. HR also faces the problems to synchronize the goals of the promoter and the individual employee goals. This study analyses the various issues faced by businesses and various strategies which would help them to be more resilient.

OBJECTIVE OF THE STUDY

To conceptualize HR issues in general in Business enterprises

To highlight challenges related to HR in SMEs

Critical analysis of HR Issues in SMEs in India

What really is HRM?

Human Resource Management (HRM) describes the systems devised for the management of human capital within an organization. HR responsibilities are generally divided into three major areas of management : staffing, employee compensation, and defining/designing work.

Essentially, the purpose of HRM is to maximize the productivity of a company by optimizing the effectiveness of its employees. This mandate is unlikely to change in any fundamental way, despite the ever-increasing pace of change in business.

“The basic mission of human resources will always be to acquire, develop, and retain talent; align the workforce with the business; and be an excellent contributor to the business. Those three challenges will never change.” – Edward L. Gubman

The key issues for enterprises now –

1. Sadly the full spectrum of HR activities are often neglected by many Indian companies, which is only detrimental and unfair.

2. In the last two decades, there have been certain spaces where many businesses have not grown either by choice or by challenges in capabilities to transform their business. Where on one hand big corporates enjoy economies of scale to control prices, SMEs enjoy agility in bringing the product faster to the market on the other. Assuming that other factors such as strategy, funds and right personnel are comparable, we still find many SMEs struggling to achieve expected growth.

3. With growth in scale of the organization, there is a substantial increase in decision making also. And if change in the process of decision making is not addressed, the organization will be in a grid lock.

4. A constant dilemma faced by SMEs is that the existing employees who are well adjusted to the conventional culture generally develop differences with the employees who are recruited from professionally driven big companies.

5. Some companies have more recently been moving in the direction of Human Resource Accounting (HRA), emphasizing the cost perspective on their human resources, and thereby having mainly a short term oriented perspective.

6. Growing small businesses need to develop their HRM practices, as increasing size inevitably brings increased complexity, necessitating a more professional approach towards managing the personnel.

7. In the new “knowledge-based” economy, as companies face the challenge of the need for more highly trained employees coupled with a shortage of qualified labour.

8. A non transparent appraisal system and subjective appraisal system drives talented employees out of an organisation depending upon the job market situation. Firms thus need to ensure objectivity and fairness in performance appraisal system to check rising attrition among their high skilled personnel.

9. One of the greatest conceptual challenges is that on one hand, businesses compete fiercely with each other within the nation and beyond, and on the other hand at the same time they would be forced to collaborate and work together than ever before to safeguard their own mutual interests to survive.

Quick Fact : Around 80% from the small enterprises and about 20% of the medium enterprises respondents indicated having no formal HR department.

– as per a survey conducted by the Confederation of Indian Industries (CII)

Critical Analysis

Most research and theory-building in HRM is associated with studies of large organizations. However, most firms in the major and developing economies employ 50 people or less. In order to analyse the nature and role of HRM in SMEs, it is necessary to analyse SMEs and their similarities as well as differences with large organizations. Some argue that small firms do not face any particular HR issues compared to large firms, but need HR to help them grow. HRD is often then translated into formal ‘enterprise training’, involving systematic instruction in business, managerial and functional skills.

However, evidence suggests that ‘enterprise training’ have often not had the impact on performance as anticipated. There is little evidence that small business-owners are particularly attracted to such training, either for themselves or their staff, and many commentators have argued that such training has often not been cost-effective, nor has it had the impacts desired. This may be due to the lack of higher education, inward looking orientation and lack of perspective of many owner managers, stress on personal independence and desire for control of entrepreneurs. Such factors may all contribute to the rejection of outside training provision.

Background of the issue

Business consultants note that modern human resource management is guided by several overriding principles. Perhaps the chief principle is a simple recognition that human resources are the most important assets of an organization; a business cannot be successful without effectively managing this resource. Another important principle, is that business success is most likely to be achieved if the personnel policies and procedures of the enterprise are closely linked with, and make a major contribution to the achievement of corporate objectives and strategic plans.

A third guiding principle, holds that it is HR’s responsibility to find, secure, guide, and develop employees whose talents and desires are compatible with the operating needs and future goals of the company. HRM is a strategic approach to the acquisition, motivation, development and management of the organization’s human resources. It is devoted to shaping an appropriate corporate culture, and introducing programs which reflect and support the core values of the enterprise and ensure its success.

Background of the solution

For whom – a multinational Life Sciences, Diagnostics & Applied Markets Enterprise (“The Enterprise”, hereon)

Total Human Capital (Global/India) – 15000+/2600+

Geographic presence (India) – 9 centers, Corporate Office at Delhi NCR

Opportunities

The Enterprise being in a challenging sector, brought us a fresh plethora of challenges. With a huge human capital comes the responsibility of micro managing each and every individuals back support. It was imperative for us to come up with a sustainable solution, to engage resources in the best manner while maintaining a fail-safe growth rate.

We set up and mobilised a Centralized and Standardized HR Shared Service Center (SSC) to scrutinize following areas :

* Recruitment Services * Onboarding * Helpdesk * L&A?????? * Payroll * Compliances

Since the role of technical analysis cannot be overlooked today, so with the aid of digital technology we arrived at a complete solution. And when it comes to analysing problems with strict accuracy, we are effectively supported by –

Client Recruitment ERP (Taleo) | Cleint ERP (PeopleSoft) | MYND HRM | MYND ESS

Our Solutions Approach Participants in the project –

RPO Process Flow (how we solved the issue) –

Digital has given us extensive access to mediums which enabled us to research thoroughly and pick key insights vital to the growth of The Enterprise.

Website | Referrals | Social Network | Alumni Group | Head Hunting | Database Mining |Emails, to name a few.

On top of that, we made it a mandate to prepare status reports in three tiers – Weekly, Monthly and Quarterly. We could analyse opportunities and problems in a more detailed method.

We positioned HRM at The Enterprise in a way which was adaptable to changes and behaving accordingly to bring out the best result. Human resource management functions are ideally positioned near the center of the organization, with access to all areas of the business. Since the HRM department or manager is charged with managing the productivity and development of workers at all levels, human resource personnel were given unlimited access to key decision makers. In addition, the HRM department at The Enterprise was situated in such a way that it is able to effectively communicate with all areas of the company.

Conclusion

The stakes are very high in the world of business when it comes to employee recruitment and management. Before hiring a new employee, the business owner should weigh several considerations. The first step the business owner should take when pondering an expansion of employee payroll is to honestly assess the status of the organization itself. Are current employees being utilized appropriately? Are current production methods effective? Can the needs of business be met through an arrangement with an outside contractor or some other means? Are you, as the owner, spending your time appropriately?

Small business consultants strongly urge even the most modest of business enterprises to implement and document policies regarding human resource issues. To hold problems to a minimum, specific personnel policies should be established as early as possible. These become useful guides in all areas: recruitment and selection, compensation plan and employee benefits, training, promotions and terminations, and the like. In any case, a carefully considered employee handbook or personnel manual can be an invaluable tool in ensuring that the small business owner and his or her employees are on the same page.

Being a part of today’s digital trend has proved to be beneficial for businesses, especially start-ups.

Most of the start-ups face the challenge of balancing between the need to manage their operating functions on one hand & expanding business on the other. In this entire cycle, managing finance becomes a relentless & tedious work. This challenge usually slows down the growth of the business as the role of Finance & Accounts is vital in providing the appropriate measure of financial fuel in prompting business growth.

The circumstances end up being complex when multiple Business Units (BU) thrive geographically. Generally, e-commerce & retail companies or organizations having distributed model face this challenge. Every business needs cash for operating expenses, on one hand, else it suffers and on the other hand, having high cash & cash equivalents at Business Units entails squeeze on their working capital. It’s tough for CFOs to balance the act of having the appropriate amount of cash in each Business Unit. Therefore, in such circumstances, there is a critical need for thorough and cost-effective solutions for cash management, accounting, disbursement & control over firm’s cash expenses.

When it comes to cash management, the condition of the majority of the start-ups is quite similar. The companies tend to adopt a manual approach towards every aspect like the hard-physical movement of vouchers, manual controls, long processing time, copy approval, no tracking of vouchers as well as loss of vouchers in transit. Adaptation of integrated solution for cash management is the answer to this problem. Start-ups need an end-to-end solution which includes –

A standard procedure for Cash Control with Self Disciplined Audits & Certification Mechanism.

Electronic Documentation & retrieval

System monitoring of last mile cash level to trigger electronic cash refills, in time, to eradicate cash-out situations and optimize working capital

Centralized Process for processing/audit of cash expenses in Shared Services Models

Centralized query management desk

An efficient accounting system ought to be kept in place to ensure workers get paid on time. This service frequently gets overlooked which might lay a substantial impact on the provider's productivity. This is where payroll outsourcing comes into play and assist businesses. Payroll outsourcing helps with compliance administration. HR staff’s ability to focus on strategic work of the business is further enabled by Payroll Management Outsourcing. It enables payroll management and streamlines the payroll process. This minimizes accounting errors and provides access to the technology that is being utilized by outsourcing firms globally.

Outsourcing saves time and helps avoid problems arising from issues related to local compliance. It also provides secure on-line access to all your payroll data and lends you a window to view payroll information at a global and regional level, adding to the services that are tailor-made for your needs.

While selecting a payroll outsourcing company for your firm, you must look into the following factors:

1. Business's track record:

Check their record of handling payroll services. Ensure that the company is accountable and dependable.

2. Services offering:

Verify their services and how it may benefit you.

“Employees are the heart and soul of every organization.”

This is no longer only a basking statement for corporate organizations but a standard protocol for all working class people. Today organizations adhere to the fact that they must have the best talent in order to succeed in the hypercompetitive and increasingly complicated business ecosystem.

Nevertheless, if we start to think about employees as “assets” then we ought to think about “Talent Management” in a novel way. It is not only a means to integrate HR processes, but a string of approaches, programs, investments and promises that nurture every employee’s lifestyle, work, and career path.

Talent Management, also known as Human Capital Management covers all aspects of an employee’s lifecycle from selection and development, to succession and performance management.

Here are the 5 Best Practices for Effective Talent Management –

1. Align Individual and Organizational Goals (MBO - Management by Objectives)

A business needs to ensure that its workforce is completely focussed on contributing to the organization’s success. We need to ensure that the business aims are in sync with the value chain and the organization is making progress towards its business goals.

2. Frequent Employee Connect to Manage Performance

Performance evaluation is a crucial chance for managers and staff to talk about performance highlights, challenges, and some other development requirements. To perform at their best, it is crucial for workers to get regular feedback on what they are doing well and areas for improvement, talk about skill gaps and career aspirations with their managers. This is the time when workers and supervisors set plans in place to address performance gaps or amplify employees’ knowledge & skill. It is the most effective strategy to keep performance on the track.

3. Periodic Feedback & Coaching sessions to Boost Performance

Ongoing feedback helps everyone maximize their performance. Ideally workers and managers should be having conversations about performance on a daily basis. They frequently fail to do this except in the context of an official employee evaluation. Therefore, it is vital to have periodic sessions. We may use tools like GROW model, 360-degree feedback, SCARF technique by Dr Avid Rock considering suitability for the business.

4. Reward Top Performers

Based on performance evaluation; recognizing your most efficient employees is obviously a vital step. While it may not be possible to benefit them with salary increments or monetary rewards every time, we may have a career progression plan or succession plan to prepare them for high challenging roles.

5. Succession Planning

Organizations must design a standard flowchart of crucial competencies and functions. A talent pool based succession plan is a challenge for any organization. It needs to recognize not only the leadership functions it wants to fill but also the critical skills & competencies it requires across the organization to succeed in the long term. Only then will it help recognize and groom its high-potential employees to fill the shoes left behind by their predecessors.

HR departments must fundamentally adopt various risk management strategies while keeping in mind the entire range of activities from securing confidential information and data, to risks allied with hiring or turnover.

Technology performs incredible human tasks with relative ease. And nobody would ever complain about taking a little help from the machines, especially people who have a business to run.

Every business enterprise consists of a system of interconnected processes and functionalities. To function efficiently, business departments need access to files and data from all the connected divisions. Business Process Automation (BPA) helps streamline all the jobs in your company and make each process highly scalable. It can be done by integrating software and applications, and restructuring the organization. As a result, all relevant departments or individuals always have the tools and information necessary for their jobs.

Automating human jobs brings with it a long list of benefits for your business. It keeps the processes well organized by ensuring that any information is automatically available whenever requested for. Automation reduces human errors by providing a digital trail for your entire operation in one place. It provides increased accountability for everybody’s actions across different systems, so issues like these don’t become a bigger problem.

Quick Fact : Automation of professional services improve human resource utilization by 54%. – as per a study performed by the National Computing Center

Some business enterprises are already experimenting with rapid-automation approaches and are achieving promising results. These trials have proved that automating end-to-end processes, which used to take 12 to 18 months or more, is now doable in 6 months and with half the investment typically required.

If you have a sizeable number of employees, it’s time to start considering automating expense management. When you have a limited number of people working for you, you need them working on whatever will help build your business—not just keep the lights on.

The finance functions in Indian companies are facing increasing demands as a result of the dynamically growing business environments, rapid technological changes, increased linkages with overseas environments  and enhanced standards of reporting, etc. In this evolving business scenario, the chief finance officers or CFOs are seen putting a lot of thought into transforming the finance functions. Such finance transformations include revisiting structure of finance function of their respective organisations to make them more agile, efficient and effective in managing costs and risks.

Over the years, it has been observed that legacy and decentralised structures have become inefficient from control, cost, scale and risk perspective for companies with multiple units and locations. In the 1990s most business units operated in a decentralised fashion and the reverse is true in most present circumstances.

A recent study indicates that 75 per cent of Fortune 500 companies have adopted some form of centralisation and shared services. Many still view a pitch for centralised transaction processes or shared services as solutions to lower costs. However, this is no longer true, especially in today’s environment which necessitates enhanced controls, reporting and certification on internal controls.The regulatory environment in many cases today necessitates certification by board of directors and auditors that the organization has an effective system of internal controls. A case in point is the recent requirement of Indian Companies Act, 2013, which mandates directors of the companies as well as the auditors to certify that the company has an adequate IFC (Internal Financial Controls) system in place and that these are operating effectively.

The example of a centralised worldwide transaction processing of an American Fortune 500 MNC during late 1990s into a shared service center established out of China shows a lot of planning and effort that lead to achieving defined systematic processes and enforcement of standards.  This even included the lesser insignificant job of convincing the managers that Chinese accountants could understand accents from the western hemisphere. Given the benefits, we could be more confident that most, if not all, transactions are processed in accordance with policy. A simple test case could be about a business travel policy that mandates all air travel less than four hours to be undertaken by economy class, to be rigidly enforced by all units, all transactions to be processed the same way, resulting in enhanced efficiency and control. Also, there would be no risk of a single payroll accountant going on leave, bringing the payroll process to a halt at any unit.

An example of a different company with multiple business segments and units with decentralised finance teams and transaction processing could be a very different experience with policies merely existing on paper and their rampant violations. In many cases, the decentralised teams could be influenced by local senior management to delay or not entirely implement policies. This might result in processes not functioning at optimum levels, possibilities of several leakages and inefficient controls. It would take a huge effort to do any certification in such an entity on effectiveness of controls.

The example above clearly conveys the risks posed by decentralised transaction processing. In addition, managers are often faced with the challenges of choosing between external versus internal centralisation or outsourcing. The example quoted above of the MNC having own internal shared services worked very well. But, this is not recommended in all cases, especially in present day’s dynamic and rapidly evolving business environments. The case of a very large joint-venture on telecom infrastructure with nation-wide operations in India, set up in 2009, that decided to centralise and outsource all payment processing to external service providers is interesting. There were instances of hiccups mostly in managing local management perceptions, but even today the structure is working fine, and is a role model for others.

A leading security services company employing more than 1 Lakh employees deployed across every state in India, having presence in more than 130 locations with multiple codes and sub codes for social security and Provident fund management, working with more than 15000 end client locations, was faced with a unique challenge of bringing efficiency and economy to the HR processes while still ensuring the effective management of such a large work force.

The challenges being faced were many:

– Limited technology interface – A highly complex salary structure – Decentralized management of compensation & compliances – Hourly and monthly attendance based wages – Manual & complex allowances and OT calculations – Invoicing linked to compliance documentation – A very large, complex and varied compliance requirements to be fulfilled as a contractor for more than 10k end clients.

All of the above resulted in a very large workforce carrying out different processes in different locations in order to meet the internal needs and the client requirements.

Critical Analysis and Support

There was clearly a need to look afresh at the entire process in totality and provide a comprehensive solution which resulted in increased control, efficiency and substantial cost-effectiveness for the client. Mynd introduced an approach to transform from a person based approach to a process-based approach with the help of best practices and bespoke technology interventions. MyPay which is the Mynd proprietary payrolling platform, was configured to meet the varied needs of each type of employee, varied salary structures and location-specific complexities where the employee was based. Further, the allowances calculations which were end client specific were also automated in the system itself. This was a huge 4-5 months effort by technical and SME teams from Mynd. Centralization of the entire payroll process was achieved by aligning salary structures in different hubs and carrying out central database-level integration for employee records and attendance from the client system to the MyPay. Once achieved, this alone resulted in 40% reduction in the teams that were deployed to manage this process across locations. The next step was to ensure automation of all compliances as a principal employer for PF / ESI /LWF and Ptax across India. The challenge was the multiple registrations and codes being managed along with constant employee movement across states. The automation ensured accuracy and timeliness of information and a transparency to the level of monthly compliances. Once the payroll was streamlined there was an immediate need to address the requirements of compliance documentation both for invoice submission and also as per CLRA. Records has to be prepared and provided to each of the clients that the company was working with. This required many registers and documents to be prepared for each of the 10 thousand clients each month under the various state and central legislation. Mynd introduced a team of highly experienced subject matter experts to capture and execute the client requirements at each location level. Further Mynd introduced its highly configurable platform called Active Compliance Tracking (ACT) which was set up to meet the needs of CLRA based documents for each location. It today manages a mind-boggling 1 lakh combinations of various requirements captured from the client for processing each month. ACT is also integrated with the payroll system for the company. The documents are made available online through the platform to meet its statutory obligations to the end clients.

Invoice submission to clients was also a herculean effort where HR records needed to accompany the 14000 invoices each month including proof of statutory deposits and other register and documents as specified by the end client. ACT was configured to meet the needs to generate these documents as well.

The above steps resulted in creating a robust process management right from expenses to revenue for the business and also bringing a substantial cost advantage to the company wherein there was a demonstrable saving of more than 35% in the year 1 cost when compared to existing costs. There was no investment required in software and IT infra as Mynd provided a SAAS solution through its robust platforms of payroll and compliances.

Mynd today manages close to 3 lakhs employee payrolls each month covering approx. 200 + clients. Our platforms for payroll and compliance management ensures adherence to all statutory laws and brings efficiency and transparency in these processes. Our teams have technical and subject matter expertise in dealing with multiple industry requirements from ITES to manufacturing, from Automotive to telecom, from domestic to international.

Mynd also provides international payroll to many clients where our multi-country single platform experience allows customers to centralize across geographies and provide a unified user experience to all employees. Our latest addition to the suite is our new mobile App called “Pocket HR” enhancing the employee experience and ensuring that they have information at their fingertips.

Business Impact:

40% reduction of human intervention in payroll processing

Saving of more than 35% in the first year of implementation

Online availability of documents to meet its statutory obligations to the end client.

Recent Research conducted by the Aberdeen Group found that companies that leverage outsourcing & automation can process invoices / transactions as much as 59 percent faster than companies that don’t outsource. Using an outsourcing provider enables companies to do more, with fewer internal resources. Businesses are able to offload transactional functions and gain the ability to focus on core aspects of the business.

Accounts payable and receivable outsourcing can transform manual, paper intensive functions into a fully automated process. An outsourcing provider will have the resources necessary to customize and streamline accounts payable and receivable processes. Automating processes and reducing administrative work allows staff and management to concentrate more on growing the business.

Many businesses are turning a cost burden into an advantage through outsourcing accounts payable and accounts receivable activities. By offering customized and competitive services, outsourcing AP and AR activities can be a smart choice for any business. The following are a few main benefits of outsourcing your business’ accounting functions.

Transformation and Innovation Outsourcing of procure to pay and Order to Cash processes can help organizations to improve these further as they no longer have to get involved in the web of documentation, planning, execution and auditing from different departments. Better decision making can be enabled and more focus can be given to the core compatibilities of the business.

Economies of Scale Standardizing the processes and hence bring about the cost efficiency can be easily managed by organized service providers especially in the scenarios such as SSC (shared Service Centres) etc. where sync and symmetry play very crucial roles. As a result, the output quality is improved while reducing the cycle time and costs involved.

Companies that have high employee turnover or those that have seasonal or cyclical spikes in invoice volume, understand that hiring and training employees is an expensive and time-consuming task. In addition, temporary employees may not always live up to expectations. Even companies that do not fall under these categories have limited capital, human, and technical resources that need to be allocated appropriately. Hiring in-house accounts payable or receivable staff, as well as all the equipment and programs that are necessary for the process, can be very costly. Outsourcing is an appealing option as it allows companies to maintain steady internal staff levels and utilize experienced professionals doing the same job at a lower cost.

Technology Infusion In-house technology options, especially licensed software models, have an upfront investment along with ongoing maintenance expenses. In contrast, outsourcing providers usually charge per transaction based on transaction volume, which are payable over the period of the contract. This not only enables organizations to convert fixed costs into variable costs, but also allows them to defer costs over a longer period of time, freeing up capital for other purposes.

Service providers incorporate cloud based technology and product upgrades, they even slot in cross functional and regular trainings for their employees in order to manage work load during peak times. This makes the entire process transparent and accessible to all the relevant users from different locations.

Standardisation Organized outsourcing companies or service providers have their processes standardised and compliant according to Service Level Agreement (SLA).  Their (Service Provider) sheer ability to design processes, deliver and control the output as per SLAs ensures that the desired objective is met with process optimization.

These are simply a few of the advantages of accounts payable and receivables outsourcing. Through outsourcing, companies improve compliance with internal controls and actually save money. A professional outsourced agency will have the resources necessary to streamline your accounts payable and receivables, leading to more efficient use of your resources towards other aspects of your business.

Considerations While Outsourcing Outsourcing can bring a lot of benefit to the company, but in order to convert the enterprise’s finance department into profit centre and to get the most out of outsourcing processes following points needs to be considered before forming an alliance with any service provider.

Selection of outsourcing partner plays a vital role. The partner chosen should have scalable infrastructure, installed base with knowledgeable personnel to support the short, mid and long term requirement. State the objectives clearly to the service provider in order to get the best outcome of their services. Before selecting a service provider for it is advisable to check out their calibre in terms of expertise, latest technology and adaptability.

Before going for outsourcing the company should streamline their business processes as it tend to reap more advantages of outsourcing services.

Proper documentation should be done between the company and the service provider with transparency so that the focus is not deviated from the core purpose.

About Mynd Solutions

Mynd Solutions has always been a leader in the domestic outsourcing space. Mynd has pioneered platform based outsourcing. Mynd has unique positioning in the market as a wide range of services in domains like Finance and Accounting (FAO), Information Technology (IT) Human Resource Outsourcing (HRO) and Consulting are offered under one roof. Mynd has proven track record of transforming and automating procedures. Our dedicated team of over 1100 employees present across India and the globe work efficiently and deliver quality services to our clients.