If the recent pandemic showed us anything, it is that technology is rapidly changing our everyday life, mostly for the better. Today’s normal will not be what next year’s normal is, calling on businesses to understand the shifts and adapt.
Neglecting to follow the transitions can lead to loss of market share and ultimately business failure. Changes are not only occurring within the business, but at the consumer level as well.
Remote work and outsourcing capabilities are redefining business while digitization and social media are rapidly altering consumer spending, making it critical for businesses to outsource ancillary functions, like accounting and focus their attention on filling other value-added positions.
Remote Work
When the pandemic was in full swing during 2020, were you able to quickly shift your employees to a remote workforce? If not, it might be time for a serious change. Added flexibility in accounting software and related tools such as Xero, Bill.com, Google Shared Drive has given businesses the tools needed to switch to cloud-accounting, supporting a remote workforce.
Employees are no longer suggesting the ability to work from home, they are demanding it. The statistics speak for themselves:
- 25% of people are happier when working remotely
- 77% of workers say they are more productive working from home
- 44% of companies offer work from home options
- 85% of managers project a remote workforce to be the new normal
- 74% of workers say the option to work from home makes them less likely to leave a company (Findstack)
But a transition to a fully remote workforce brings up even more complex decisions for business owners. Reevaluation of the office space, company culture, new policies and cloud-accounting capabilities all need to be taken into consideration when implementing remote workforce capabilities (Sneader, McKinsey & Company).
These decisions are projected to become more prevalent going into 2022, which is why businesses are turning to outsourcing their accounting function with the help of cloud-accounting to ensure that the backend of their business is successful.
Outsourcing
The transition to a fully remote workforce can be a tricky situation for many companies, which is why many businesses choose to have a hybrid option with a remote workforce and certain accounting department functions outsourced. The inability to efficiently complete work led many businesses to outsource work, from accountants to customer service managers.
Outsourcing not only takes the burden off your plate, but it can usually be a more cost-effective solution compared to hiring a full-time employee. Cloud-accounting software programs, like Xero, gives businesses the ability to have multiple users and still remain cost-effective. Outsourcing is only expected to increase with technological advancements and remote workforce capabilities.
The most common items outsourced are IT, HR and accounting, all of which take a great deal of skill to accurately complete. These professions are in high demand, meaning if you were to look for a full-time employee, you would pay significantly more compared to outsourcing.
Just like with remote workforce capabilities, statistics surrounding outsourcing support this projection:
- 54% of companies utilize some type of third-party for customer support
- Outsourcing was a $75.2 billion dollar industry in 2021
- 78% of businesses are confident in their outsourcing company
- There are 59 million freelance workers in the US (Dautovic)
When you put these statistics in perspective, one out two businesses utilize some type of outsourcing function. Keep in mind that you do not have to be a large company to use outsourcing.
In fact, many small- to medium-sized businesses benefit the most from outsourcing due to financial constraints compared to hiring an in-house accountant. When businesses can no longer rely on a fully staffed team and cloud-accounting is on the rise, outsourcing becomes more attractive and reliable.
Digitization
This year also will show major shifts in the way consumers interact with businesses through the use of digitization. According to recent studies, “productivity in the third quarter of 2020 rose 4.6%, following a 10.6% increase in the second quarter, which is the largest six-month improvement since 1965” (Sneader, McKinsey & Company).
The increase in productivity trickles down to the consumer, providing them with better products and services.
Furthermore, digitization and artificial intelligence work hand in hand with many small- to medium-sized businesses implementing AI features in customer services, allowing current customers to receive quicker response times.
Perhaps the greatest impact of digitization on consumers is the requirement for innovative ways to present products and services. The pandemic only heightened the use of handheld technology with most people spending a majority of their day looking down on their phone or other device.
Businesses need to find new ways to appeal to consumers through the use of digitization and artificial intelligence, such as through virtual appointments. This may require business reconfiguration to accurately meet the new demands of consumers.
Focusing your attention on meeting customer demands is great, but you do not want to leave other areas of your business lagging, like your accounting department. Removing the constraints of the accounting function through hiring a qualified outsourcing company can help you maintain and grow your market share by honing in on consumer needs.
In addition, cloud-accounting capabilities make it incredibly easy to track sales and market growth, reinforcing your strides towards greater customer relations.
Social Media
A decade ago, the most effective way of advertising to consumers might have been through the radio and maybe even the newspaper. But a whole new era is pushing forward with social media on the rise.
Social media is more prevalent in younger generations for certain applications, nevertheless most people are on social media in some form. Apps like Tik Tok, Twitter and Instagram have all gained increasing popularity during the pandemic.
Some important statistics to highlight include:
- 4.55 billion people use some form of social media
- Annualized growth of new users ranks at 9.9% per year and 13 users every second
- The average individual visits 6.7 different platforms each day
- Tik Tok has 1 billion active users each month
So, what does this mean for businesses going into 2022? Well, it is critical that businesses have some presence on most social media apps, especially if they are trying to advertise to younger generations. If managing social media accounts becomes too overwhelming, consider outsourcing the job.
How Can You Take Advantage of This Shift?
Understanding the shifts you can expect to see as a business owner going into 2022 is the first step in taking full advantage. When looking at employee requests for remote work capabilities, are there room for improvements in your company?
Tasks like accounting, human resources and any other “desk” job can be converted to remote work with cloud-accounting.
But if a fully remote workforce is not appealing to you as a business owner, consider a hybrid method with a certain number of days in and out of the office. This is a good compromise to attract needed talent, keep current employees happy and boost productivity margins.
Whether you are looking to go fully remote or implement a hybrid option, cloud-accounting with Xero gives your business the tools needed for success.
Furthermore, dive into what functions of your business can be outsourced for a more effective price. If you are a small- to medium-sized business, consider outsourcing customer support so you can focus on other important areas of the business, such as attracting new customers.
Outsourced accounting functions should also be considered, such as financial statements and payroll with Basis 365 Accounting and overall accounting with Xero. COVID showed us how unreliable the current workforce can be with new demands and opportunities pulling talent in all different directions. Outsourcing accounting can help solve the staffing issue by allowing you to focus efforts on filling other positions that add more value to your company.
The most common items outsourced are IT, HR and accounting, all of which take a great deal of skill to accurately complete.
Having a reliable outsourced accountant can prepare your business for the future, especially during these uncertain times. Focusing on the aspects of your business you can control, such as the accounting function, minimizes the risk of business failure.
There is no telling how long the staff shortages will last, but one thing you can count on is Basis 365 Accounting to handle all your outsourced accounting needs.
Our team is experienced with the latest business shifts, especially with Xero, making us your trusted outsourced accountant. With 2022 now in full swing, give your business the best possible chance of success with a reliable and dependable outsourced accountant.
Rhett Molitor is a co-founder at Basis 365 Accounting, which provides cloud-based outsourced accounting and bookkeeping services for ecommerce, software and technology, and professional services businesses across the US. Rhett is a graduate of Chapman University in Southern California and was a practicing CPA before transitioning into the software industry for over a decade where he was selected as a “Top 40 under 40” by The CPA Technology Advisor. He enjoys working with dynamics teams and introducing new technologies into accounting and operations workflows.
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