Franchise business: how to make money on accounting outsourcing

Outsourcing involves a large company hiring one or more smaller ones that specialize more precisely in a particular area.

You can start with a business idea of ​​your own small business to fulfill the need of a large business for which outsourcing is a great option in certain niches.

During a crisis, large companies try to cut costs in all areas of their business. They are looking for the cheapest way to keep themselves afloat.

And sometimes it is much more profitable for them to resort to outsourcing than to pay high salaries to the employees of their company.

Let's assume you live in a small town and you are an accountant or economist.

Some small businesses in your region may not want to hire full-time employees, but may benefit from outsourcing services.

There is a great opportunity for you to sell your services.

What is outsourcing and outstaffing

Outsourcing is the transfer of part of the functions of business processes to a third party on the basis of a contract. Most often, outsourcer services are used in the accounting field, when a start-up entrepreneur cannot support a full-time employee.

Outstaffing is a very similar concept to the first one. The essence of the service is to use employees of a third-party company to perform certain functions. Freelance employees perform the scope of work specified in the contract for the customer organization, but are on the staff of another performing company.

Features of outsourcing

First, let's figure out what it is. Outsourcing is the transfer of secondary company functions to special performers. Sometimes this happens on a temporary basis, but more often on a permanent basis.

Running a business is not as easy as it seems at first glance. In addition to the primary activities in which the company specializes, it is necessary to carry out a number of additional work - accounting (sometimes complex), searching for and hiring qualified personnel, managing them competently, advertising products, promoting ideas to the market, handling transportation, monitoring the operation of equipment, and much more. .

All this is not the direct responsibility of the director. And if previously for each direction it was necessary to hire additional employees, today it is enough to invite an outside specialist who will do everything at a professional level and require a relatively low fee for this. Thus, staff costs are reduced by up to 50%!

Only high-level specialists who can cope with the responsibilities assigned to them efficiently and in a short time are suitable to work in an outsourcing company. One such company can deal with the affairs of many enterprises at once.

The advantages of choosing services through an outsourcing system are:

1. You can concentrate completely on your core activity.
2. The quality of the services provided will be higher compared to hiring specialized specialists.
3. Labor costs are significantly reduced.
4. Thanks to such contacts, business ties expand.
5. Business turns out to be insured against most mistakes.

Experts believe that in our country the demand for outsourcing services increases by 20-30% every year. The competition here is not yet too high, and almost no initial investment is required. This opens up good prospects for aspiring entrepreneurs who have professional skills in certain areas.

Project Summary

To open an outsourcing company you need to determine:

• direction of activity;
• capital expenditures;
• Buy outsourcing business plan
  monthly investments;
• number of staff units;
• payback point.

You should also take into account the level of competition and calculate possible risks in order to minimize them.

Organizations engage outsourcers to perform work in the following areas:

• accounting;
• jurisprudence;
• audit;
• personnel records management;
• IT technologies.

Before starting a business, it is necessary to analyze the companies that may need accounting services.

Financial questions

It is quite difficult to provide exact numbers for creating an outsourcing company. After all, a lot here depends on the region, the number of employees, the chosen direction and prices on the market. Major capital investments will be made in:

• rental, repair and arrangement of premises;
• payment for staff work;
• technical equipment;
• advertising;
• registration of activities.

For example, to open an agency providing accounting or personnel services, you will have to spend about 300 thousand rubles. You can achieve payback in six months if you initially have at least 2-3 regular customers. Experts say that after just a year of fruitful work, the project’s profitability reaches 40%.

Video: how does outsourcing work?

Analysis of competition in this area

To identify the strengths and weaknesses of a future enterprise, the owner needs to conduct an analysis of the competitiveness of the business in the selected industry in the region. The following criteria are used for this:

• competitiveness of the service, which includes quality, pre-sales and post-sales services;
• image of the organization - brand recognition, information accessibility;
• organizational and technical capabilities;
• financial position – cost, solvency, payback.

When analyzing competitors, you should take into account the staff of enterprises and the principles of management structure.

Description of outstaffing company services

The Contractor undertakes obligations to the customer regarding the selection of personnel. The main responsibilities of the outstaffing company to the employee:

• execution of an employment contract;
• calculation and payment of wages;
• drawing up work and rest schedules.

An outstaffer can arrange insurance for employees, issue special clothing, and pay additional expenses. If the employee fails to show up, the contractor must provide the client with a replacement.

An accountant can perform the following services for a customer:

• processing of primary documentation;
• record keeping;
• payroll preparation;
• submission of reports.

Services can be provided both as a whole and according to individual accounting items.

Rent of the necessary premises and its arrangement as an office

To organize the work of an outsourcing company, it is necessary to arrange workplaces for specialists. A company can purchase office space or lease it.

The following equipment must be installed in the office:

• computers;
• outsourcing business plan cost
  ;
• means of communication;
• furniture.

The purchase of software plays an important role in arranging a specialist’s workplace. This may include specialized accounting programs, information and legal databases and platforms for submitting reports to the Federal Tax Service and extra-budgetary funds.

Recruitment and training of personnel

At the start of a project, you should not recruit a large staff. To get started, just accept:

• chief accountant;
• several ordinary specialists;
• manager's office;
• technical equipment.

To reduce costs, you can hire two experienced accountants with at least 10 years of experience and two trainees with lower pay. To maintain the qualifications of employees at the proper level, it is necessary to send them to seminars and courses annually.

Advertising of outstaffing company services

An outstaffing company's advertising campaign should be aimed not only at attracting potential clients, but also at finding order executors. You can reduce advertising costs using social networks and free message boards.

In addition, companies resort to a method that does not require additional investments - cold calling. This task can be assigned to employees during their working hours. As your base of regular customers develops, advertising costs can be reduced.

Poor business practices in general

First you need to understand the specifics of the accounting business and decide on the target audience. Among my students are business owners of completely different sizes - there are novice entrepreneurs, such as Marina, and experienced players - Anna has had her own business for 12 years.

At the same time, the main problem is often a common one - a lack of understanding of how to build and scale your business, maintaining control over it, and not just increase turnover, but also profit. And you, as an accountant, must understand these are different things. Half a million may be credited to the account, but expenses will eat up 90% and 50,000 will remain. Is this why you opened your company?

Mostly money is lost on marketing. By ordering an insanely expensive advertising campaign or paying for promotion on social networks, you do not guarantee yourself a flow of clients. As a result, just a couple of calls or messages on VK. Why? Because not every marketer is able to understand the specifics of your business, your target audience and their pain points, and if you yourself do not understand them, you will not be able to convey the message to the performer. Money spent on advertising will be wasted. Not to mention the fact that you can simply contact a sharashka office, which will shake money out of you without bringing any results.

There is another extreme - doing advertising yourself. We took a couple of courses in copywriting and targeting, participated in creative work and decided that we were ready for the world of SMM. Not so! Everything is not so simple and easy, and a site created on the knee in the designer can look completely poor (sorry for my frankness).

Creating a personal brand and self-presentation is also part of the training at our School. For example, already in the second module of the course you will draw up a business plan that will include:

• Target attraction plan
• Marketing plan
• Sales plan
• Personnel plan
• Organizational plan
• General financial plan

You will see the goals you want to achieve in the form of clear and specific indicators.

Capital and monthly costs

Before starting a business, you need to make a list of capital and monthly expenses. Most funds will be spent on capital investments, such as the purchase of office equipment and furniture. A small amount will be required to register the enterprise with the regulatory authorities.

Monthly expenses can be divided into several large sections:

• office rental;
• salary and deductions;
• Consumables;
• advertising.

It is important to correctly take into account the costs incurred in the cost of the services provided.

Instructions for opening from scratch

If you are interested in how to open an outsourcing company, the main steps required will be listed below:

• Official registration. The founder of the company needs to create a legal entity or register as an individual entrepreneur. You will also have to register with the tax service.
• Preparation of contracts. In no case should you be limited to oral agreements either with clients or with hired specialists. That is why it is necessary to prepare sample contracts in advance that can be used in the future. It is imperative to specify the terms of cooperation, duties and responsibilities of the parties.
• Room. A business owner should rent office space. It is preferable to choose options that suit you not only in price, but will also be convenient for meetings with potential clients. It is advisable to rent a spacious room to separate the space for meetings with clients and for employees performing their own work functions.
• Purchase of furniture and equipment. To perform their duties, employees need to create comfortable conditions and equip their workplaces. That is why the business plan should definitely include the costs associated with the purchase of equipment and furniture.
• Hiring employees. At first, outsourcing services can be provided by the business owner himself. However, if you have hired employees, you will be able to achieve payback faster. That is why you need to pay attention to the selection of qualified personnel who can successfully cope with the tasks set by management.
• Advertising. The profit of an outsourcing business depends entirely on the availability of clients. For this reason, it is important to devote enough time to promoting your own company in the services market. The larger your customer base, the greater your future profits.

If starting your own business seems too difficult for you, you can use a ready-made franchise.

Risk Analysis

When preparing a business plan, you should assess possible external and internal risks. External ones include those that the company cannot influence. But in this type of activity they are practically absent.

In this area, internal risks pose a great danger, such as:

• low quality of services;
• lack of information among employees;
• financial illiteracy of staff.

If a company employs low-skilled specialists, this will not have a very good effect on its reputation and will lead to fines and loss of customers.

Softline on the business process outsourcing market “in questions and answers”

Author: Anton Ogarkov , General Director of Softline Outsourcing

The global business process outsourcing (BPO) market was valued at $203.8 billion in 2020, according to Ameri Research Inc., from 2018 to 2026. the average annual growth rate of the sector is expected to be 8.1%, culminating in global sales in 2026 at $360.76 billion. In Russia, the market for outsourcing accounting functions (accounting and human resources) in the public sector of the Russian Federation alone is estimated by experts at 1 trillion rubles annually.

Since 2020, the Softline group of companies has been operating an “accounting as a service” service for government agencies and public sector institutions, commercial and non-profit organizations. The service is provided by Softline Outsourcing, a specialized business unit within the Softline group of companies for financial and personnel outsourcing, serving clients from the public, commercial and non-profit sectors of the economy (official website www.softlinebpo.ru).

General Director of Softline Outsourcing Anton Ogarkov spoke about the company’s capabilities and plans.

What are the advantages of outsourcing?

Our clients highlight two main advantages of outsourcing: saving money and labor resources by reducing staff and complete transparency of cash flows at the execution level.

Outsourcing, as a mechanism, increases the efficiency of core activities due to the refusal to independently provide non-core functions. Payment to the outsourcer for a specific result, and not to the employee in accordance with the salary in the staffing table. This mechanism also eliminates problems with government services in the field of regulating labor relations - employees are officially registered with the outsourcing company and are not a headache for the customer.

Outsourcing is a real digital transformation of business and the state, which gives an advantage in the competition for contracts, personnel, consumers, and the well-being of citizens.

Today, with the boom in remote work, outsourcing is more relevant than ever. Why? Outsourcing initially presupposes a remote work mode - the service delivery model, internal business processes and IT platform are built for remote work and have stood the test of time for strength, reliability and efficiency. At the same time, many companies are now faced with the fact that they are not ready to fully function under conditions of quarantine and remote work: a weak IT platform and the difficulty of controlling the work of internal accounting and HR services outside the office.

The most common reasons for outsourcing companies according to Deloitte:

59% – cost reduction and control; 57% – focus on core functions; 47% – increase in labor productivity; 31% – improvement of service; 28% – gaining access to expert knowledge; 17% – business environment management; 17% – acceleration of organizational transformations.

Is it possible to outsource public sector enterprises?

Possible and necessary. And not only because this is a global trend. In the next 2-3 years, up to 70% of the routine work of accounting departments and human resources services of the public sector in the regions can be replaced by a transactional service model based on an automated platform (roboticization of routine operations using machine learning technologies). Already, the economic effect of introducing outsourcing ranges from 10% to 15% cost savings in the first year of service and from 15% to 30% in subsequent years, and thanks to the development of technology in the industry, this figure will steadily increase.

The number of accountants in the civil service in our country alone has exceeded 1.1 million people. According to First Deputy Minister of Finance Tatyana Nesterenko, more than one trillion rubles a year are spent from the budget on their maintenance. And this despite the fact that the world is increasingly moving to high technologies and electronic document management.

How do regional authorities feel about outsourcing accounting functions?

So far, only a few constituent entities of the Russian Federation have shown a willingness to take advantage of all the benefits of outsourcing to increase their own efficiency. Moreover, there are a number of challenges that need to be overcome. Legislation needs to clarify the rules regarding the delegation of powers from the state to business. Civil servants lack knowledge and skills in the field of outsourcing. But the most important thing is the authorities’ continued distrust of business and their reluctance to transfer part of their functionality to external performers. Today, the development of outsourcing in a particular region depends solely on the will of the leadership of the constituent entity of the Russian Federation.

Are there examples of such regions?

Yes, of course, Softline Outsourcing is now actively working in the Moscow region and the Udmurt Republic, as well as at the level of federal customers in a number of regions of the Russian Federation.

Separately, I would like to note that in 2020, at the site of the St. Petersburg International Economic Forum, an agreement was signed between the Softline Group of Companies and JSC Development Corporation of the Udmurt Republic. In the same year, the Corporation became a co-owner of one of the legal entities in our area. At the same time, we have successfully passed the pilot project stage and in 2020 we plan to complete the transition of all republican government agencies to outsourcing.

How does your service work within the Softline ?

Based on the Shared Services Center concept, which allows Softline to become a provider of supporting services. Softline Outsourcing is, first of all, a team of specialists with many years of experience and wide functionality. Our technologies and professional skills allow us to work with a large number of customers – both remotely and by placing employees on the client’s premises. The immediate plans include the development of a system of unified centers for processing and providing information at the level of constituent entities of the Russian Federation for the consolidation and unification of accounting data. Regional management will receive a flexible and convenient tool for decision-making and control in the form of consolidated analytics by industry.

Softline coping with competition in the outsourcing market?

We are fighting for leadership in this area. Due to the weak development of business process outsourcing in Russia, only a few companies have competencies sufficient to operate effectively. The personnel policy of Softline Outsourcing allows the company to successfully cope with tasks of any complexity, competently analyze the customer’s business processes, flexibly optimize its model for the client’s goals and not be afraid to take risks. We employ the best of the best and this is our competitive advantage.

More information about the team, services and development strategy of Softline Outsourcing can be found on the website www.softlinebpo.ru.

Is providing services to the public sector a priority?

The willingness of a business to work with government agencies and budgetary organizations is always a sign of high professionalism. It is important for us to benefit the state by promoting the rational and efficient use of budget funds. But Softline Outsourcing has no restrictions on the size or specifics of tasks - we work with large and small businesses. We are ready to provide services to the non-profit sector, for which competent handling of finances is one of the key factors determining the ability to fulfill its social functions through donations, grants and contributions.

78% of businesses respond positively to their experiences with outsourcing companies, according to Deloitte.

Which industries are most interested in outsourcing accounting functions?

Outsourcing will bring many benefits to any segment of the economy. We have extensive experience working with social institutions: education, healthcare, culture, sports, and we have also gained good experience in the transport and logistics sector and the housing and communal services sector.

Is the development of outsourcing a threat to hundreds of thousands of people who could lose their jobs?

This thesis is often used by opponents of outsourcing development. The same arguments are used by opponents of digitalization of services, automation of production processes and increasing labor productivity. We are confident that outsourcing accounting functions will bring with it a new attitude to the formation of the state’s personnel policy with a clear strategy for creating new jobs, a developed system of career guidance and retraining. In addition, we are creating new jobs in the regions where we operate and are ready to expand our geography. Russia is a social state, but it must be effective in all aspects of its activities, especially in terms of working with budget funds.

How will the coronavirus pandemic and other global challenges affect the development of outsourcing?

We are seeing an increase in demand for our services. In extreme conditions, outsourcing will help maintain the company’s functioning at the proper level and increase the speed, accuracy and quality of information used to make important business decisions.