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Subcontracting
I have experience of sub-contracting from both sides and can understand the issues involved. As a sub-contractor actually working in a pratice I found I had to work harder than the employees, as I was costing them more! What eventually happened was that they took on an employee who was keen to climb the ladder and my work was whittled down to the occasional training visit miles away from home. Needless to say I bowed out.
Having used subcontractors myself, I can only say it depends on the person involved. The say would apply to an employee. If you have faith in the person and their capabilities it is fine; however if you have to do it again when it comes back for reviewing then it was an expensive waste of time.
From my own perspective I would be reluctant to subcontract again in practice, but would do it again from my home office as this offers more flexibility and does not leave you open to being used for the difficult on site visits no-one else wants.
What are you afraid of?
I hear the pros and cons but think the cons are overbloated. The technology side of it can be taken care of easily. In fact, one of the things I'd insist on is access to DSL and a VPN connection. That's as secure as it's likely to get. Who wants this data anyway other than you and the tax office?
As for not working 100% - subcontracting is not an easy option. There is no employment in the conventional sense - so the contractor has to work damned hard to make sure he/she earns enough to make up for any leans times or (unpaid) vacation and sickness.
If you have to resort to subcontractors all the time there is something wrong with your place of employment. If not then you're in the wrong location, not using the right technology, have the wrong client mix or all the above problems and some.
Don't sub-contract. Outsource instead.
If you treat someone as a sub contractor they'll resent it. Why not? You're putting them on a different, lower plane than you. How would you feel? 100% motivated? I doubt it.
So don’t sub-contract. Instead recognise that there are things your practice can’t, or does not want to do. That’s fine. Markets work on the basis of people doing what they are best at, not on the basis of people doing everything asked of them (which is why odd-job people get paid so little).
So don’t sub-contract, outsource what you’re not good at. That might be book-keeping. It might be VAT. It might be IT advice. It might be financial services advice. Each is a skill you might not have. So what? You’ve probably got plenty to offer still.
The important thing is to keep the core service you’ve sold in house, If that’s doing tax returns and accounts that’s fine. Finishing accounts from TB onwards is not the same as book-keeping. Doing tax returns is not the same as sorting out inheritance tax planning. If you think about things this way then people don’t subcontract to you, they extend the range of services you can offer, cost effectively. And that makes this form of networking a very different proposition for all involved.
Hang on, which century are we in?
"Ownership", "control", concerns about communication difficulties. This is the language of the 50s and 60s. My main work is interim management. If this sort of thinking was applied in industry there would be no interim managers, but in fact the market has grown, and continues to grow.
Concerned about costs? Then set a specific rate for the job. Problems with information transfer? Then arrange log in to your server via the internet. This is straightforward stuff, commonly used.
There are lots of second rate sub-contractors and I don't defend them. Nor do I defend second rate contractors.
Subcontractors
There is another alternative to using subcontractors who work from home. Due to personal circumstances I am not able to work full time, so I now work 1 day a week for a sole practitioner. This gives him access to a qualified FCA at a reasonable cost to help to carry out the higher level work that he should do but does not have enough time. It also provides a sounding board to discuss and resolve the sundry tax and accounts problems that cause so much time wasting if you do not have a partner to discuss it with.
I am happy that I get regular work and am able to keep my professional knowledge etc up to date.
Overall it gives a reasonable compromise for a growing practise.
I have given assurances about not taking work etc to get round the obvious weaknesses in employing a potential competitor.
There are lots of older accountants out there without work who might be happy to work part time to help new practises grow.
How...?
How do you find good subcontractors?
Im in the earlier days of a small book-keeping/financial admin practice. I provide a range of services from book-keeping, credit control through to management accounts and payroll aswell as advice and internal training.
Some clients want me to make a provison for year end accounts and returns, instead of having to go to another firm.