2009-01-21
I have a friend on Värmdö who has a small business in transport and shafts. Värmdö is an expansive community, so his business is going well and they are very busy. However, there are other problems that begin to accumulate, for example the administration.
MY FRIEND DOES NOT have sufficient economy to hire someone to manage the administrative part, but customers who pay late or even never, he neither has the time or desire to call and require the charges. This has also affected his liquidity and therefore he must have a valuable check credit. In addition to this, his wife and children constantly complain that he never comes home because he has to stay and manage the activities of the day. This includes invoices, accounting and more.
MY PROPOSAL TO HIM was to outsource the whole economy part. With outsourcing, he would avoid investment in employees and systems, while other professionals take care of his "boring" tasks. In addition, the money comes in quickly because the staff calls and require payments from his clients.
MY FRIEND HAS NOW outsourced the entire financial administration. He is fully up to date via the web interface and has a better understanding of the economy than ever before. The check credit is paid for and all done.
He is now experiencing several benefits with outsourcing in the financial management:
- More time for the main activities
- Less vulnerable in case of illness, holidays, etc.
- More efficient administration and shorter real credit periods
- Lower costs and an educated staff
IN THE PAST, people also utilized outsourcing. Officials then called it that "someone helped" or "hired out".
For some companies, it is obvious that you need to have someone to help with the administration. For others it is not. But isn´t obvious for everybody that the administration is not a purpose of its own?
I HAVE BEEN WORKING with financial management and operations almost my whole life. Right now, when everyone is careful with money, the interest in outsourcing has increased markedly. Who does not want variable cost of economic administration that follows the company during good and bad times? That seems to be the question right now.
ON A RECENT TRIP, I brought up outsourcing with a company in Dalarna. First they said that "these things" we are able to manage ourselves. They have two ladies who take care of all parts of the economy and they have no difficulty to manage their duties .
If the company would use outsourcing one of them would probably be unemployed. And of course it “hurts” for most companies to fire employees who have done no wrong. One of the ladies admitted however that both she and her colleague will retire. One in February 2009 and one six months later. Then, the company has two options. Employing two new and train them or to employ one and outsource as much as they can of the financial administration. Probably, they will choose the second option because it is both cheaper and it takes more time and commitment to train.
THE NEED TO GET HELP with the Administration is perhaps the biggest concern when it comes to expand abroad. Being able to talk to ONE contact person in Sweden who resolves staffing, offices, security, salaries, accounting, invoices in and out, and bank contacts are a bit of a dream for many but fully achievable.
Honestly, if you knew that this assistance exist, wouldn´t your company take the risk and expand to new markets in and outside the Nordic countries?
To have total financial and administrative control of affiliated companies in Norway and / or Russia is a bit of a good condition to take the final step. The market is always out there ....
I MAY NOT QUITE LIVE as I learn. To have two children and be president of a salvage company takes up a lot of time. I was also part of starting a political party in Nacka a couple of years ago and the municipal mandates takes up at least one or two evenings every week. So, did I outsource the cleaning? No. Why not? Probably because I have not yet found a good reliable contact. And it that is important even in the industry. If you have a good contact who can demonstrate a good service at a good price, then it feels safe. We would like to have a little more personal service. Someone who cares about you.
HOW DID IT GO FOR my friend on Värmdö? Well, him and his wife are on a second honeymoon in Madagascar. Without the children. They have temporarily outsource.