Outsourcing for accountants
Have you ever considered approaching your accountancy work a different way – by outsourcing some of your services to someone perhaps more specialised in that area?
Opting to sub-contract some of the non accountancy-based work seems to go in and out of fashion in the profession. However, in light of unprecedented technological advancement, have we come full circle?
Should accountants re-consider the practice as a suitable way to free up time and focus on more valuable projects? It’s a topic which sometimes gets a bad rep within the profession, but could be a viable option for accountants to prepare for the future.
Technology advancement is being used to solve problems like Making Tax Digital, so perhaps outsourcing certain tasks is now back in vogue. A multitude of tasks can be outsourced, even coping with an overwhelming inbox….
As a partner or sole practitioner, your daily routine at work is likely to consist of numerous tasks which lay outside the realm of the accountancy work you were trained to do. These everyday business tasks can include recruiting new staff, marketing your services and managing your IT network, to name a few.
Below are three ways outsourcing can be used across the profession:
More and more accountants are outsourcing the ‘boring’ non-profitable parts of the job to focus on higher yielding, more profitable consulting work. The main benefit of this is to cut costs and afford more time to meet with clients to discuss their business objectives. Some outsourcing firms even suggest they can help improve profit on client margins by 50%! By outsourcing a backlog of VAT returns, year-end Accounts or Payroll, for example, some accountants reap the benefits from freeing up their time to make way for higher value advisory work.
However, the quality of work undertaken by outsourcing companies is a point usually raised when considering the risk. If more time is spent checking the work than would have been done to do it in the first place, it is easy to see why large firms and sole practitioners alike aren’t easily persuaded to hand over the reins at the risk of effecting their reputation. Ask these three questions to any potential outsources to ensure their process are reliable and secure.
Can’t find the right people to power your practice? Our report on the future of accountancy highlights that finding the right talent is of major concern within the profession. Recruitment is the main driver contributing to the apparent outsourcing boom as smaller practices struggle to compete in a tough recruitment market.
Rather than recruiting, outsourcing can be used to gain more capacity rather than recruiting and training junior staff. Vipul Sheth, Director of Advance Track believes there is still a role for well qualified staff to support the changing role of accountants in practice. He notes that his clients (accountants) are “changing the type of staff they recruit from staff those that ‘man the engine room’, to staff that are recruited because they are comfortable sitting and talking to clients about their business and finances.”
Vipul acknowledges the challenge for accounting practices globally to be “attracting and then retaining the best talent which will continue to drive demand offshore.”
Many accountants reap the benefits from incorporating outsourcing into their core business strategy, but questions remain over the reputational aspect of taking things offshore – perhaps away from the traditional role of your everyday accountant.
Has an increased online presence from other practices made your reconsider your marketing efforts? Boosting your online search capabilities has never been easier and can be done by any business owner regardless of their skillset. However, running digital campaigns and writing blogs to increase traffic to your website are often time-consuming activities which can be outsourced to specialist individuals.
As another example, social media marketing is a proven method to attract prospective clients but unless you have experience in creating a strategy to suit the needs of your business, it could be a timely activity. A social specialist could amend your ads are targeting from loss-making to profit-making.
However, ROI in these circumstances should be carefully considered. Large firms can invest more capital into creating and adjusting paid adverts which brings the desired volume of leads. Some small firms find that word of mouth referrals are the preferred method of finding clients, which incurs very little cost (if any!).
Last years’ Accountant of tomorrow survey of 350 UK accountants revealed outsourcing to be one of six areas accountants would consider when preparing for the future. With an expected increase in the role as an advisor in the ‘new world of accountancy’, it seems beneficial to be able to outsource tasks such as data processing to make way for higher value conversations with clients. Outsourcing compliance work can be a great solution if you are looking to expand your practice quickly, but can seem immoral to some traditional accountants.