TY  - JOUR
AB  - The paper uses a procedure called data envelopment analysis (DEA) to compare internal against external (outsource) efficiency in the delivery of finance function activities. The approach allows a direct comparison between the in‐house efficiency of UK small, medium and large companies in managing their accounting activities both with UK outsource contractors and also against the rather larger and more numerous contractors observed in Italy. The paper finds that, through comparative advantages, outsourcing presents a more efficient solution for the management of very small firm accounting than internal provision. Furthermore, there is evidence that substantial scale benefits continue to be available to outsource contractors, while inefficiency on internal provision is mainly technical. The paper concludes that outsourcing provision is likely to offer worthwhile savings to small firms, allowing them to shed competitive weaknesses and operate at efficient or best practice levels. At the same time, by converting an internal fixed cost, fixed capacity activity into a flexible, variable cost activity, SMEs have the potential to transform a previously unmanageable activity into an efficient or best practice activity that can grow or contract with the business.
VL  - 8
IS  - 3
SN  - 1463-7154
DO  - 10.1108/14637150210428925
UR  - https://doi.org/10.1108/14637150210428925
AU  - Barrar Peter
AU  - Wood Douglas
AU  - Jones Julian
AU  - Vedovato Marco
PY  - 2002
Y1  - 2002/01/01
TI  - The efficiency of accounting service provision
T2  - Business Process Management Journal
PB  - MCB UP Ltd
SP  - 195
EP  - 217
Y2  - 2024/04/25
ER  -