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Outsourcing Diagnostic Tool

"Do what you can do best and outsource the rest"

Here you can find an on-line Outsourcing Diagnostic Tool to help you determine whether to outsource accounting services. Just answer the following 14 questions and then click on "Calculate!" button:

  1. Core/noncore activity:
    Accounting IS NOT a core activity for our organization (not a core business):


     Strongly Agree
     Agree
     Neither Agree nor Disagree
     Disagree
     Strongly Disagree
     Does not apply here
  2. Reduce service/increase service:
    With outsourcing we'd have more time for serving our clientele:


     Strongly Agree
     Agree
     Neither Agree nor Disagree
     Disagree
     Strongly Disagree
     Does not apply here
  3. Less flexible/more flexible:
    Outsourcing might be more flexible, to vary with our seasonal needs:


     Strongly Agree
     Agree
     Neither Agree nor Disagree
     Disagree
     Strongly Disagree
     Does not apply here
  4. High risk/lower risk:
    We don't know how hiring an employee will work out - with outsourcing there is less risk:


     Strongly Agree
     Agree
     Neither Agree nor Disagree
     Disagree
     Strongly Disagree
     Does not apply here
  5. Easy to maintain/difficult to maintain:
    It's difficult to establish/maintain and manage our own accounting department:


     Strongly Agree
     Agree
     Neither Agree nor Disagree
     Disagree
     Strongly Disagree
     Does not apply here
  6. Difficult to outsource/easy to outsource:
    It's easy to find an outsource firm to provide the accounting services we need:


     Strongly Agree
     Agree
     Neither Agree nor Disagree
     Disagree
     Strongly Disagree
     Does not apply here
  7. Inability to grow/ability to grow:
    If our organization grows, we can easily add services if we outsource:


     Strongly Agree
     Agree
     Neither Agree nor Disagree
     Disagree
     Strongly Disagree
     Does not apply here
  8. Staffing: Inefficiencies/increased efficiency:
    Efficiency could increase if specialists do the accounting:


     Strongly Agree
     Agree
     Neither Agree nor Disagree
     Disagree
     Strongly Disagree
     Does not apply here
  9. Staffing: Instability/stability:
    There is much turnover in our organization:


     Strongly Agree
     Agree
     Neither Agree nor Disagree
     Disagree
     Strongly Disagree
     Does not apply here
  10. Staffing: Stagnant ideas/new ideas:
    The outsourcing firm is up to date on all the latest accounting information and can bring new ideas and knowledge:


     Strongly Agree
     Agree
     Neither Agree nor Disagree
     Disagree
     Strongly Disagree
     Does not apply here
  11. Staffing: Basic skills/cutting edge skills:
    The outsourcing firm has better knowledge of relevant rules and regulation and is more experienced in dealing with local authorities:


     Strongly Agree
     Agree
     Neither Agree nor Disagree
     Disagree
     Strongly Disagree
     Does not apply here
  12. Higher operating costs/lower operating costs:
    Cost of outsourcing may be lower - based on proposals received (or estimation):


     Strongly Agree
     Agree
     Neither Agree nor Disagree
     Disagree
     Strongly Disagree
     Does not apply here
  13. Fixed costs/variable costs:
    Our organization likes variable costs - we prefer billings based upon the contractual rate per hour and the amount of time spent on each activity:


     Strongly Agree
     Agree
     Neither Agree nor Disagree
     Disagree
     Strongly Disagree
     Does not apply here
  14. Small capital requirements/large capital requirements:
    Accounting by ourselves (without outsourcing) would entail a large capital requirements (PCs, office equipment, etc.):


     Strongly Agree
     Agree
     Neither Agree nor Disagree
     Disagree
     Strongly Disagree
     Does not apply here

Source: Journal of Accountancy, Nov 2001

 
 
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