Is Under- Resourcing An Option?

Feb. 6, 2009 - PRLog -- In the current economic climate, the issues facing most companies, regardless of size, are more threatening. However, for smaller companies, changes in economic activity are even more unwelcome as SMEs are more susceptible and have less control over their business environment. Every action the company, its customers or suppliers take in an uncertain situation, may create a risk to the survival of its business.

In an economic climate such as our current one, the pressure on companies to reduce staff costs is overwhelming, especially as more companies face extinction. The first cutback business owners and managers tend to make, will involve staff costs as that seems to have a more immediate effect than other expense lines. The danger however, is that in desperation, companies will make rash permanent decisions to save costs even when it results in such an unfortunate situation as under-resourcing. The consequence of this is that business opportunities from prospects or existing clients may be missed; administration gets behind, reporting gets delayed, all resulting in other pressures on the business.

So why isn’t under-resourcing an option - or, technically not an acceptable option? There are many risks to having insufficient capacity to deal with current or potential increase in demand. The business opportunity that may be lost can reverse the same situation which necessitated the cut back in the first place.  Also additional costs often arise through fines, penalties, uncollected debts etc.

With this in mind, most businesses are in favor of an option that has become acceptable in today’s business world. With outsourcing and insourcing, entrusting another company with your finances and other strategic assets has become an acceptable – even essential business model. The advantage is that companies can afford to plug the gap in staffing as and when required, usually on a flexible payment platform, and often at a lower cost than full time employment.

Many companies deciding to do this for the first time are faced with issues of trust, security of information and level of expertise/service. The main question remains ‘How do you know which companies you can trust?’Here trust would encompass every single element of the relationship including reliability, flexibility, pricing and a true commitment to provide value.   How does one find the right partner or supplier? How do you vet a vetting company- if you decide to use one? Do references really give a true picture? The truth is that there is nothing as effective as a personal, independent search; especially for high volume, long term contracts. Visit websites, speak with representatives from the company, get references and referrals from personal or professional networks, as well as the chambers of commerce or governing bodies. You may explore as many sources as possible until you are satisfied- and in some cases this may be only one source. Admittedly, you may discover subjective information but it at least tells you something about the provider. Find out who your competitors are using and it’s quite easy these days with close supplier networks and the internet. The most important point is not to depend on one single source, but when you decide to, make it subject to an ongoing review.

CONTRIBUTOR’S PROFILE: Gary Jesson is Managing Director, e-Financial Management Limited, the financial management outsourcing company that offers a wide range of expert financial management solutions on a pay – as – use basis. E- mail: gary@efm.uk.com. Contact number:  01582 516300. Website: www.efm.uk.com

# # #

e-Financial Management Limited (e-FM) provides a wide range of expert financial management solutions on a flexible and scalable basis, with particular focus on SMEs. We cover all aspects of the finance function from bookkeeper to Finance Director.