Mar 2020

Forex Risks- It’s time for Australian accounting firms with offshore labour resources need to look at the fine print

Forex Risks: It’s time for Australian accounting firms with offshore labour resources to look at the fine print

By: Odyssey Outsourcing
Tags: ad-hoc model, australian accounting, Fixed offshore model, forex risk, Outsourced Services

The Australian dollar is diving down.

Australian SME’s need to not only manage supply chains in a difficult time, but also manage the foreign exchange issues.

Since the beginning of 2020, many offshore markets such as Vietnam, India and Philippines are observing a big down in foreign exchange rate with Australian dollar. For example, Philippine peso has gone down from 35.48 (on 1st January 2020) for one Australian dollar to 30.4 today. The Indian INR has also gone from 49 to 43.

Australian accounting firms with offshore full time labour have to pay their salary in the currency in which they live. So we could see an increase of 25-30% in costs of full time offshore labour, for those firms who bear the exchange risk.

On the other side, for those newer providers who offer cheap prices, you can expect their margin is razor thin, and with little profitability buffer will either soon fold, lower the quality, or at a last resort put their hand out for more money.

It’s an easier way to undertake Ad-hoc model.

For the Australian Accounting firm, finding the full-time offshore staff and resources required to take your compliance jobs completing efficiently is often a hurdle.

A good outsourcing company will have professional and multi-years’ experience resources and be able to offer you ad-hoc work.

The flexibility of ad-hoc will reduce your exposure to foreign exchange risk and the other financial issues, as you can pass some of these risks onto your outsourcing partner’s shoulders.

Odyssey Accountants is the market leader in outsourcing for Australian accounting firms. We provide flexibility and expertise – Our outsourcing model can help you access to a wide breadth of skills and experience in Australian compliance as part of a long-term business support relationship.

Drop us a line if you would like to chat more about how our Ad-hoc model might be able to assist.

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