Minimize expenses instead of transferring to clients

To a business in the process of optimizing expenses, it is important to lose neither personnel nor clients along the way. I will try to explain how a professional service firm should proceed in this situation. Because for them, the optimal use of resources serves as the foundation of their business-model.

Make processes cheaper

For such firms, one of the basic techniques used to reduce expenses without harming the quality of services is to open a Shared Service Center (SSC) in regions with cheaper costs. In Russia, a country with inexpensive software developers, accountants and other specialists, there are dozens of the Shared Services Centers set up by local and foreign companies, not necessarily specialized in outsourcing.

SSC in Russia pays for itself within 3-5 years on average and requires serious initial investment. It is better to evaluate the practicability of this solution with the help of local consultants who have successfully launched such service centers and have a specialization relative to your needs (accounting functions, marketing, IT etc.) They will clarify where it is more profitable to place a SSC, the amount of people and resources needed for it to function effectively, and consider Total Cost of Ownership (TCO) and Return on Investment (ROI).

Use outsourcing

Using a provider does not always yield direct savings, but always provides uninterrupted service and stable quality. Even at Alinga, a provider itself, some internal functions are outsourced to professionals – IT, payroll and legal services.

Arm yourself with technology

Alinga extensively uses specialized software products to streamline and standardize business-processes. We automated all crucial activities: all accounting procedures for servicing clients, preparation of quarterly IFRS management accounts for customers’ head offices, planning of our specialists’ work schedules. Process automation requires serious preliminary preparation.

Manage cost

Monitor the cost of company resources with the help of internal controls, budgeting, management accounting and reporting, time sheets by all employees and monthly monitoring of achievement of objectives. Thanks to the regular analysis of collected data, you avoid overspending, simplify personnel planning and improve the workflow of the company.

Here is an example. By using special software for tracking employees time, we define the time needed and required level of qualification for each project. Therefore, we know the precise cost of every project. Based on this we can objectively assess the profitability of a project and generate invoices in a timely manner. If there is an increase in time to fulfill any type of standard operation, then it is an occasion to find and address the causes of this increase. In addition, if the process is ‘failing’ on the client’s end, then we offer them an automation solution, which makes outsourcing cheaper as a result.

Allow employees to feel free

Offer employees a flexible schedule and to work in a home-office mode. We do not do this for direct economy, but for the growth of work productivity and employee loyalty. All other things being equal, keeping employees is much cheaper than replacing them.

Transform internal expertise into new services

Consider other ways in which you can be useful to current and future clients. Have you found and solution to a relevant business issue? Do share your experience!
For example, Alinga assists companies in increasing the effectiveness of their accounting departments and creates “turnkey” processing centers – starting from the assessment of the feasibility of its opening, to eventually handing it over to the client.

Every organization has valuable internal practices that are utilized to solve their own problems. To offer these solutions to the market is much easier, than creating a completely new service.