Outsourcing

Outsourcing is a concept of getting the work done from some source that is outside the business entity or the business corporation. With the concept of outsourcing companies distribute the work or certain projects to the supplier that are outside the circle of the company hence they don’t have to complete that work or the project internally using their own labor and own resources. There are a number of different advantages of outsourcing and the most prominent and promising one of them is that it is a very cost effective technique. Most of the times companies realize that it is more economical, cost effective and affordable to hire an outside supplier for the completion of the certain portion of work and projects instead of getting them accomplished internally that will result in more cost and more effort.

Outsourcing provides comparative advantage to the companies that prefer to hire supplier rather than completing the work inside their own units. There are a number of different examples of outsourcing and one of the most prominent of these examples is that of Dell that is using the concept of outsourcing to produce certain parts of the computer rather than producing them in their own production units. This type of outsourcing helps in reducing production costs for Dell. In terms of accounting there are a number of examples of outsourcing such as companies decide to hire book keeping accountants outside the company for completing book keeping accounting rather than hiring an in house accountant that will be more expensive to retain for the company.

Other Related Accounting Articles:

• Knowledge Process Outsourcing
• Vertical Merger
• Going Concern Concept
• Accounts Payable Days
• Business Model
• API Accountants for Public Interest
• Long Run Average Total Cost
• Equivalent Units of Production Definition
• Make or Buy Decision Definition
• Back flush Accounting