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Employing subcontractors

How does it work?

Hello 

To date, I have not employed sub contractors. I am reviewing all my options. I would be grateful for any information as to how it works:

1) What would be an acceptable rate of pay? Price per job, If so what % of fee?

2) How do I make sure that the sub contractor does not poach our clients? Probably no real way. 

3) Queries on the accounts - does the sub contractor contact the clients?

4) He/she would work off site?

5) Your experience of working with sub contractors? Is this a long term solution?

Any information you can provide will be helpful. 

Thanks 

 

 

 

 

Replies

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13th Aug 2017 17:08

I am a contractor myself, and find it works very well. The "employer" benefits from no commitment to employer pensions, maternity/ paternity/ sick/ holiday pay, no worries over unfair dismissal, and can turn the service on and off like a tap.

I benefit from having a fair chunk of work to top up my private work with.

1. A day or hourly rate works. A % per job might mean you farm out all the high maintenance/ low profitability work which would not work for the contractor!

2. A written agreement would work.

3/4. I work on site and contact clients directly (and work in much the same way a normal employee would) but you can chose which ever way you fancied.

5. Probably the same as if they were an employee- it could go south quickly, or could work well long term as well!

Thanks (1)
13th Aug 2017 17:31

My experience has been positive:
1. Negotiated daily rate
2. Contractual term
3. Not necessarily
4. Onsite - would have been fixed fee for offsite
5. Urgent need. Longer term relationship employee is better

Thanks (1)
13th Aug 2017 17:48

Having heard about a subcontractor another accountant used being truly hopeless, I would say you'd have to make sure they knew what they were doing before letting them loose on your clients.
If it were me, I'd interview them just as I would an intended new member of staff.

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13th Aug 2017 19:45

Taking on a contractor and finding out they're useless isn't as bad as it seems- the nature of them being a contractor means you can say goodbye after day one, and you haven't really lost anything. There wouldn't be the need to tip toe around the issue and dismiss them via lengthy conventional channels.

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to Mr Hankey
13th Aug 2017 20:04

No, not difficult if the 'employer' is a hard-hearted [***] but more so if they are decent. Which would you rather work for?

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By Tosie
14th Aug 2017 09:01

Interview them as in normal employee selection. Check qualifications/ experience.Notify your P.I. provider. Ideal work onsite. Agreement in writing to what you expect from them in terms of paper work. Ideal have standard working papers.Minimum full supporting schedules for balance sheet. Analysis of usual suspects i.e repairs, drawings directors loan with dates.Agree time schedule.In my opinion after first couple of jobs contractor should resolve queries otherwise job goes on for ever.Good luck

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14th Aug 2017 12:02

I've used four.
One was very good (ACA with young children looking for flexible work).
One was just OK. (ACCA working part-time in practice but with day per week free).
One was dreadful (CTA who had zero knowledge of spreadsheets).
One other was dreadful (can't remember his background).

The above experience led me to start using outsourcing which worked well for me for the larger jobs.

They worked on-site, paid per hour and didn't contact clients. I would have been very happy to continue using #1 above but she moved out of town.

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to Red Leader
15th Aug 2017 07:30

Hello RL

Thanks for your response. I have not used out sourcing service before, it is an option worth exploring.

Any information you or anyone else can provide will be a help.

1) Do you scan the information and send it to them?

2) Do they do the complete job?

3) Their costs are on a % of fees?

4) For queries do they contact client?

One concern I have is over clear communication. Difficult to understand accent.

Thanks (0)
to FirstTab
15th Aug 2017 11:02

Are you here distinguishing out-sourcing to a large company (OSC) with numerous staff, any of whom may work on your jobs (usually based abroad), from out-sourcing to an individual sub-contractor (SC)?

(1) This is where the advantage of cloud accounting pays huge dividends. Get the client to forward all of their electronic bills (and scans of paper bills) to AutoEntry or ReceiptBank (or DropBox or OneDrive if you don't want to use automated OCR tech to input the bills to your b/k software). The same procedure would apply whether you use an OSC or SC.
(2) depends on the services offered by the OSC or the SC's skills, and on the complexity of the job. One size does not fit all.
(3) either pay a fixed fee per job or hourly. I usually wouldn't base it on a percentage of the client fee for a SC and definitely not for an OSC.
(4) For a good SC, you will save a lot of time if they can interact directly with the client. Ensure that you get copies of all email correspondence by using a service like Microsoft's Office 365 email server (where you can see their email folders and all mail sent and received) and make sure that the SC's email address uses your firm's domain name. For an OSC, it will depend upon the communication skills of the staff at the OSC. Perhaps limit communication to email rather than voice and, again, ensure that you can access all emails.

Thanks (1)
to charliecarne
15th Aug 2017 11:19

Thanks charliecarne, very helpful.

Thanks (1)
to FirstTab
15th Aug 2017 11:56

FirstTab wrote:

Hello RL

Thanks for your response. I have not used out sourcing service before, it is an option worth exploring.

Any information you or anyone else can provide will be a help.

1) Do you scan the information and send it to them?

2) Do they do the complete job?

3) Their costs are on a % of fees?

4) For queries do they contact client?

One concern I have is over clear communication. Difficult to understand accent.


Brief response:
Only worked for me for larger a/cs prep jobs, due to time spent delegating each job, though this would be similar to that delegating to an in-house person.
They were good at sifting through detailed records, preparing detailed working papers and getting to good TB stage. This was accompanied with list of outstanding queries and any notable variances. I always thought of it as what a good a/cs senior would do when passing work to their manager.
I chose to have all communication via email. I didn't test speaking to them on the phone.
Paid fixed amount based on price list that varied with level of t/o + quality of records, though I think they could be flexible on price.
Lots of negative comments on here in the past about outsourcing. Can't recall anyone else posting positive comments.
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to Red Leader
15th Aug 2017 12:02

Brief and also helpful RL.

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By Glennzy
14th Aug 2017 12:27

I have 2 girls who do my Xero stuff for me. They work remotely and are paid an hourly rate + sometimes I agree a fixed price for certain tasks.

1 is an ACCA on maternity leave so does flexible hours up to 20 hours per week around child care.

The other is an AAT who has decided to go back into full time study so works around her college course.

Both have turned out well, at present they report any queries/missing info back to me then I request from client, but would be happy for them to contact the client direct TBH. Definitely think this is a good way of working at my stage in the business as could not always guarantee fixed hours every week.

Thanks (1)
By Glennzy
14th Aug 2017 12:27

I have 2 girls who do my Xero stuff for me. They work remotely and are paid an hourly rate + sometimes I agree a fixed price for certain tasks.

1 is an ACCA on maternity leave so does flexible hours up to 20 hours per week around child care.

The other is an AAT who has decided to go back into full time study so works around her college course.

Both have turned out well, at present they report any queries/missing info back to me then I request from client, but would be happy for them to contact the client direct TBH. Definitely think this is a good way of working at my stage in the business as could not always guarantee fixed hours every week.

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to Glennzy
15th Aug 2017 12:00

Is that four girls then?

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By Glennzy
to Red Leader
15th Aug 2017 12:44

Just 2, but as I am such a dream to work for I have another ACCA in the pipeline.

Thanks (0)
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By chatman
to Red Leader
15th Aug 2017 13:28

Red Leader wrote:

Is that four girls then?

LOL

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15th Aug 2017 11:56

It all depends on the Terms of Engagement that you negotiate with the contractor.

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