Outsourcing Telford Engineering has identified a global business services partner off-shore. The annual cost of outsourcing the accounting function per annum is forecast to be $292,000. The GBS Company will take over the highly systemised and transactional operations of payables, receivables, payroll and credit control. Long-term asset and treasury and cash management will remain in-house. Outsourcing would take place immediately following MEXIT (in about one year’s time) and annual outsourcing costs are estimated to remain constant over time. The total cost of making the staff redundant under the outsource option is estimated to be 25% of their current annual salaries. Outsourcing would mean that 40% of the other non-staff accounting department costs could be saved each year. The retained skeleton staff, post-outsourcing, will be paid at 20% more than their current salaries.
Note: The remaining staff to be retained under the Outsource Option will be as follows: Head of Accounting (unchanged salary) + 2 Fully Qualified (FQ) Accountants and one Part Qualified (PQ) Accountant
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