Can outsourcing solve accountancy's biggest challenges?
More often than not, practitioners are running the gauntlet of recruitment challenges and unrealistic client expectations. For those striving to scale, is outsourcing the answer?
When starting out, practitioners feel like they carry the weight of the business on their shoulders. Alex Falcon Huerta, founder and CEO of Soaring Falcon, was no different. Like many starting out, she grew concerned about her mounting workload. Her scaling ambitions were often clipped by the tide of extra work.
So when an employee let her down, Falcon Huerta decided that there had to be another way. She could have tried recruiting again but realised that if she booked an outsourcing company, it would take the pressure away. “You think that it might not be the right thing to do but actually it's one of the best things I have done,” she remembered.
These days, Falcon Huerta is outsourcing more and more, including payroll, management accounts, VAT and bookkeeping. “It frees up my time because I'm in a situation where I am a growing practice.”
In a profession under pressure from recruitment challenges and the constant demands of client email, outsourcing has grown in popularity, especially amongst the Accounting Excellence Awards entrants.
What’s behind the outsourcing boom?
Outsourcing outfit Outbooks has also seen a major uptick in interest from accountants. “I have seen at least 100% more leads this year than the last year,” said Amit Agarwal, the co-founder of Outbooks.
And this interest looks only to increase. “Until last year, the majority of our sales started with “Push” where we started the engagement. This year, the majority of our sales are “Pull” where accountants are coming to us inquiring about the service. This is a sea change.”
Perhaps a major driving force behind this trend is the tough recruitment market for small practices. “There is a genuine concern in the market that all new graduates in the market expect a very high salary, irrespective of the value they generate,” said Agarwal. “Not all accountancy firms can afford it.”
Indeed, the labour shortage has become a big problem in the profession in the last few years, but digitalisation driven by Making Tax Digital has given practices even more reason to review their internal processes.
As outsourcing firm Sundaram explained on AccountingWEB’s industry insight page: “Accountancy practices need staff that can adapt to these changes, as well as to train clients so that they can deal with the new technological requirements now and throughout the first few months of the implementation of the government’s plans.”
So, as the post continued, practices are now in need of extra staff to deal with the increased number of returns and to continue the same level of service.
What it means for client service
As a 2018 Accounting Excellence Finalist and a judge at the 2019 edition, Falcon Huerta knows full well the importance of client experience – an underlying philosophy of the AE awards programme.
So by outsourcing, Falcon has been able to give her team more time to offer this human side of client satisfaction. “I can educate them and train them on how to be the business advisers that they strive to be,” said Falcon Huerta.
In doing so, she is able to hire candidates that reflect where she wants to take her firm and hire based on personality rather than purely technical skills. Growing client expectations require a more front-facing candidate.
“Today, people want more instant responses and sometimes we get emails that will say, ‘we emailed you this morning and you haven't replied’,” said Falcon.
“We're always trying to deliver and it places a lot of pressure. What I don't want to do is for my employees to be worried about getting things done like payroll and VAT returns and deadlines - that can be outsourced.”
Falcon Huerta is then free to grow her practice and release her team to focus on what she’s training her team to do - the human side of the advisory, while compliance ticks away in the background.
Still some resistance
Since last year's Accountex, the rise of technology has helped shepherd outsourcing back into prominence. But there is still resistance to the idea. Commenting on AccountingWEB last year, one reader referred to outsourcing as a “dirty little secret hidden in the small print of the engagement letter”.
Adding, “I wouldn't risk the damage to my reputation by selling the soul of my practice overseas.”
However, Falcon rejects these fears as being “pre-cloud”.
“I know it is not going to match everybody's case and I think it depends on where you are in your practice as to whether you can or can't do it.
"The number of accountants I meet on a regular basis and talk to them about what I've done and where they are, I'm like, I have no idea why you are not yet outsourcing. It's solved so many of my problems.
“If I was to set up a company today, my first port of call would be to design a process around outsourcing.”