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6 Helpful Things Small & Medium Businesses Need to Know About Outsourced Services

Over the last two decades, the market size of outsourcing and offshoring has increased across the globe. According to 2016 outsourcing survey of Deloitte, the most prominent reason why small and medium-sized businesses outsource their operations are as follows:

59% of small business owners consider it a cost-cutting tool, and another whopping 57% of respondents believe outsourcing helps them focus on their core business. Other reasons why businesses outsource their functions include capacity problems, time-saving, and service quality.

These are good reasons why a business should outsource its functions, but these are not only reasons by any stretch. If you stopped here there are important things you might be missing. We have explored some key factors that small and medium-sized businesses should know to understand the value of outsourcing functions like payroll services, HR services, customer support, and bookkeeping services.


Cost-saving is not the only reason why a company, either large or small, would outsource its functions, but it is one of the major reasons to outsource. Let’s take the example of payroll services or HR services. For a small business with less than 50 employees, imagine the cost of payroll hours, software development and maintenance, updating yourself with tax rules, and staff training.

Just imagine how much you would be paying for all of the services mentioned above and compare it with any payroll services provider’s packages. It is the most feasible option for small businesses or startups in the scaling stage to outsource their complex functions like bookkeeping, payroll services, and HR services.

Besides the benefit of cost-savings, a great deal of time can be saved by outsourcing complex functions. For instance, if you are managing your payroll in-house or by yourself, you have to spend a lot of time calculating hours, making paychecks and their disbursement. And when if comes to payroll being too busy to do the work is not an option. You must focus on this demanding issue even if you have other pressing matters to attend to.

When you outsource these functions, you can sit back without worrying about making the time for managing everything by yourself.


Every country in the world has its own business regulations, compliance laws, and standards. Furthermore, there are different international standards made for performing different functions. Either it is HR function, many ISO standards are governing your HR practices. When it comes to bookkeeping and accounting, IASB and IAS are the governing rules.

According to data from the IRS, 40% of small businesses pay penalties of $845 every for not complying with the rules for filing payments. The errors and omissions in bookkeeping or payroll have three-dimensional hazards for small business owners. On the one hand, it can annoy the employees if the wrong paycheck is credited to their account. Secondly, the mistakes and omissions lead to heavy penalties from the IRS. The third dimension of hazard is frustration and irritation caused to a small business owner who has too much to manage.

Besides, you cannot keep up with ever-changing laws and tax regulations. Therefore it is a safe option to hire the services of professionals to perform the business operation with accuracy and compliance.


For every business, resources are constraints, and it has to give maximum output in the limited resources. But in the case of small businesses, the resources are even more limited.

If a small business owner wants to hire a specialized professional with expertise and experience, it might take a large slice of his resources to pay him. However, if he goes for an inexperienced and low-paid person, it will cause greater damage to his business.

So, what is the option?

Why not hire the professionals at a much lower cost?

Yes, it is possible. If you outsource your business functions to specialized service provider firms, you will get your work done more professionally at a low cost.


Sickness, vacations, emergencies, and contingencies are unavoidable, and life goes on like this. But, if such risks are not managed properly for a business, it can be a greater risk itself.

There are whole departments in large organizations where if one person is absent, the work can easily be spread. For a small business owner, such an event means a lag in work. And if you want to make your small business run and become a successful organization, you have to stay ahead of time.

You can get round the clock services and customer service above expectations by looking for an outsourcing agency and getting your non-core business operations done by them. You can save yourself from the risk of any emergency or hindrance because the outsourcing firms are specialized in their functions and have professional staff who work with efficiency and proficiency.


If we do a cost-to-benefit analysis of outsourcing services versus keeping them in house, it is obvious that outsourcing will be on the higher side. We already talked about cost-saving that can be achieved by outsourcing.

It is clearly evident that if you are to hire someone permanently, you have to pay the employee benefits, annual increments, training, office space, software development, and many more such expenses. For an outsourced service, you will have to sit with the professionals for a brief about your business, get the deal done for a lump sum amount that is less than the employee’s annual charges, and ta-da.


An outsourcing agency will never take your work casually because your project will be their testimonial in the future.

And which company would wish to have bad customer feedback?

You get the point.

Outsourcing operations rely on the same channels of business that everyone else relies on, and doing a great job is always the top priority.


Outsourcing is a good tool for different reasons, and it can be an ideal solution for small businesses. But, be careful, outsourcing of your core business operations can pose to be a hazard instead of a competency. Do you remember how IBM fell to Lenovo?

You can reap the rewards of outsourcing by deciding smartly. Look for experienced and professional service providers to take care of your business.


Peach BPO not only provides high quality, cost effective, experienced professionals to work on your business; we also manage every client as a tailored experience according to the unique needs of your business. Good service is not one size fits all. Business needs will not be the same even within the same franchise.

From the start of our relationship, we take the time to assess the needs of your business. We develop a customized action plan to ensure a smooth and successful transition. Our project management approach to onboarding ensures deadlines are met and that the full value or our service as soon as possible.

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