You’ve got a backlog of Year End Accounts and are considering using outsourcing to reduce the backlog. Your question is how to outsource year end accounts. The only problem is your managers are very resistant to outsourcing (regardless of whether it is year end accounts prep or bookkeeping) as they got burnt before when trying outsourcing. This was the question which came up in a recent Accountants Millionaires’ Club Group Accountability call lead by Heather Townsend. In this guest blog post, she shares the advice she gave her members based on their experiences with global Infosys.
How to outsource year end accounts
Why did the outsourcing go wrong before?
Before you start to convince your managers to try outsourcing one more time, you need to understand what went wrong the first time. Over half of the Accountants Millionaires’ Club members outsource. This could be selective outsourcing, i.e. they outsource their year end accounts or bookkeeping to a contractor or specialist accounts outsourcing companies such as Global Infosys. Or it could be outsourcing the whole of their back office to a dedicated team, normally in India or a place like the Philippines.
In our experience, outsourcing normally goes wrong for four reasons:
The quality of work coming back from the outsourcer is poor and needs too much rework
The firm outsourcing has unrealistic expectations and doesn’t realise it needs to treat the outsourcer like new team members, and work with them to get them to work in the right way.
The communication flows between the firm and outsourcer is poor.
The firm hasn’t got it’s managers on board so not enough work gets outsourced as the managers try to keep as much as possible ‘in-house’. Or the work being sent across is poorly briefed so there needs to be lots of rework from the firm when the work comes back.
How to start again with outsourcing
It’s important when you are considering using outsourcing to firstly identify what went wrong in the past, and to make sure that you don’t make the same mistakes again. For example, get recommendations to a good accounts outsourcing company such as Global Infosys. But also spend time with your managers to identify what is in it for them if they get outsourcing working right this time. E.g.
They get more time to spend on the more interesting work
The firm gets more capacity so they don’t have to work as many hours
In our experiences it is worth having these roles and responsibilities when you start outsourcing:
A client administrator whose role is to get the clients records in. If you can give them a checklist, such as via Xero Workpapers, you can make sure that they get all the records in before sending the work over to your accounts outsourcer. If your client is cloud based, then you may not need to ‘physically’ send any records over. This client administrator can also be used to project manage the workflow between your firm and the outsourcer. Having a client administrator do this work frees up your client managers to do more of the stuff which adds value to the client.
A client manager to ‘champion’ outsourcing and get all the other account managers to identify work to send to the outsourcer.
Before you start outsourcing, get your chosen outsourcer to come down to your office (Global Infosys have a team of London based account managers to be able to do this in person) to spend time with the managers to process map how the work comes across and is managed. This step is very important. It’s this step which often makes or breaks an outsourcing relationship.
Match your outsourcer’s business model to what you actually need in your firm.
Typically most outsourcers work on a per seat or an hourly rate basis. Our recommendation when you are getting back into outsourcing is to work with an outsourcer who will give you a fixed fee and allow you to work with them on a pay as you go basis. For example, Global Infosys will do this for you. That way you can get the cost efficiencies as you ramp up your outsourcing without being tied into a 12-month contract.
This article appeared originally on The Accountants Millionaires’ Club website.
Heather Townsend is the author and founder of The Accountants Millionaires’ Club. She regularly appears on the lists of top global influencers for the accountancy profession.
About Arun Ravindranathan
Arun completed his training as a Chartered Accountant in India in 2001 and has since been based in the UK. In 2005 he completed his ACMA and achieved an MBA (London school) in 2007, specialising in Strategic Management harnessing his academic skills to head up the operational side of the business and also to market the benefits of outsourcing internationally.
Arun is the brains, brawn and inspiration for the growth of GI. He has taken GI from just a handful of employees through to a 170+ company servicing clients from all around the world. He is responsible for the strategic direction of the firm as well as managing the firm’s large accounts.
Arun is well placed to talk to accountants about their day-to-day operational issues and also to be a useful resource for planning a long-term business strategy incorporating outsourcing. He firmly believes that integrating the potential of outsourcing will bring tangible benefits to his clients.