Back-Office Centralization Can Reduce 40% Of Your Costs – Here’s How

You spill a couple of drops and before you know it, you have lost a bucket-load of water… that is exactly how overheads work. Minor costs add-up and soon enough, you end-up spending bundles of time, energy, and money unwisely. The key solution here would be back-office centralization. Simply put, it means centralizing all the non-core business functions of your company and having them dealt with via alternate efficient methods. This process not only increases the productivity but also lowers the overheads. In 2009, the Managing Director for SAP Malaysia said that back-office centralization was the key for businesses to reduce their costs by 40%.

In an age where 64% of small businesses in the US are finding it more and more difficult to manage their company’s cash flow (Forbes Insights), reducing costs and improving productivity could prove crucial in the company’s existence in the long-run.

Lean is in

63% of small businesses in the US plan to reduce their overhead expenses in 2010. One must identify the costs that a company could do away with. The key would be to reassess employees’ salaries and review work profiles to identify whether you need to do the work in-house. Figure out if there is any work that can be outsourced to make the best use of your staff’s time. Many tasks, like bookkeeping/web designing/IT support /24×7 customer support/phone answering/document management, take up a lot of time and resources and eat up infrastructure – thereby increasing overheads.

Too many vendors spoil the broth

If you chose to outsource these services, then managing multiple vendors might give you double the headache. By centralizing all these non-core, back-office activities in a “Virtual Business Center” many small businesses have seen a reduction of about 40% in their overhead costs. Find a suitable vendor who gives you a one-stop solution and set up parameters for quality and the quantity of work they do for you. The partner must also offer the flexibility to expand/contract the level of services provided, or offer the services on as-needed basis. Build a system for frequent, quick check-ins to make sure everything is running smooth. Your partner needs a good understanding of your business’s systems, processes, and growth plans.

Do not let lack of planning eat into your valuable resources as the economy starts to pick up. Grow with the economy; centralize your back-office.

About the Author

Dave Otfinoski, CEO of My Business Assistant or “MBA”, has more than twenty-five years of executive, hands-on experience with small and mid-sized businesses. As CEO of MBA, Dave manages a team of experienced virtual assistants who have extensive expertise in the realms of small business operations, bookkeeping services, website design, SEO, content creation and call center operations. Outstanding client service and quality performance are the hallmarks of both My Business Assistant and the MBA team. We look forward to providing you with the Virtual Assistance that you may require to enhance your own business strategies. Please feel free to contact us at http://www.MyBusinessAssistant.com or call us at 800.993.9622 with any questions or inquiries that you may have.