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Not sure I agree with the above
I have grown my Chartered practice in the last two years by almost 100% i.e. doubled our turnover from organic growth. None of the work we have outsourced.
I wouldn't outsource the 'majority' of the work, as you lose control and cannot be confident on the quality of the work. If you have to review every single piece of work that comes out of the outsourcer that rather defeats the object and you will probably end up doing more work. And you put your practise at risk! Better to recruit quality staff, train them properly and have decent processes and procedures.
As an example If you have outsourcer responsible for the work and your firm didn't do the bookkeeping, when you have a conversation with the client with an issue, you won't have a clue what happened without going back to the outsourcer.
In my view this won't put your firm in a good light.
I may use an outsourcer for a particularly busy period but definitely not as a strategy.
If I was engaging a professional and found out they outsourced all their work I wouldn't be very happy. I even get annoyed when I get put through to a call centre somewhere and find out that my supplier's customer service has been outsourced.
I wouldn't outsource my core services as it is my offering to the public. I think most people would expect that you are doing the work.
I don't think you need to outsource to grow your practise, there are many good candidates on the market that you can employ that don't expect the earth.
'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. “
Don't agree with that and it is not my experience. Many graduates can't find a job and end up working in pubs, I've had no problem recruiting decent candidates.
"However, Falcon rejects these fears as being “pre-cloud”."
We are almost totally cloud 90% so it's nothing to do with that, it's to do with quality, control and understanding all the work you do for your clients.
Great response to a one sided advert/article no doubt paid for by the outsourcing firms it includes.
I made the comments above against outsourcing and we are definitely not "pre-cloud", 90% use cloud software and have a successful, growing practice.
Does Alex let clients know that their financial/confidential information is sent to India/ The Philippines and are the procedures GDPR compliant?
We know a number of local firms who encourage staff to cover up the fact that work is sent to India and other places abroad.
I have spoken with a lot of accountants about outsourcing since I was approached by Global Infosys last year. And I chaired a discussion panel for them on this subject at Accountex in May.
What suits one firm doesn't suit another. Some of the arguments against outsourcing in principle are fair, some are out dated and some are simply the result of a bad experience.
I know that Global Infosys, for example, address all the GDPR issues and are also proud of their ISO 9001 certification.
What most impacted my view was when I heard how positively the panellists spoke at Accountex. All were clients of Global Infosys and all were quite convincing as regards how well outsourcing works for them.
There was clearly a lot of interest as the panel session was in the final slot on day 2 of Accountex and yet the theatre was full.
I think it's important to recognise that outsourcing to India is not the only option when you are struggling to recruit staff or if you suddenly lose a key resource. I summarised the main alternatives in this blog post last year:
https://bookmarklee.co.uk/what-are-the-options-when-you-need-help-with-c...
Why is anyone struggling to recruit staff, many graduates looking for careers, many stay at home parents want to work from home (which is what alot of our staff do as we are predominantly in the cloud)
And why not back British workers!
When we advertise for a job we get Many good quality candidates. Maybe if you want to pay your staff the very minimum you can get away and they don't see the value of working for you, then you won't be able to find good people.
But if you pay well and offer a quality service why outsource. Seems to me it's a cheap alternative and short sighted as a strategy and as Ultra say above something you don't want to tell your clients about because they wouldn't be happy.
Recruitment is a challenge to very small firms. I am a sole trader and my first hire was difficult as most people would not leave a large firm to come and sit in an office with 1 other person as career progression would be limited.
I have managed to get 2 home workers who do bookkeeping /Xero etc but it is not ideal.
Once you get a team of more than 5 I imagine it gets better, at the other end of the scale I would be reluctant to put time in with an apprentice if he would leave after 12 months to gain experience in a larger firm.
Recruitment is the biggest issue all small firms and hinders their growth plans.
With regards outsourcing I have mixed results with it.
I find they are very good at year end files if the bookkeeping is good. The flexability this brings when you are busy is useful also.
Bookkeeping they are quite poor at as lack local knowledge of suppliers and make a lot of mistakes on this.
Payroll is a low value service which people go nuts about if its wrong so had to bring it back in house after a few mistakes.
Also language can be an issue (as a Geordie) , I tried India they could not understand me (to be fair some English people also struggle) and just nodded and said "Yes Mr Glenn" then did something totally different to that asked of me.
So for me its an option, as a plug in to create extra capacity but you still need some local resource to work with on bookkeeping side and managing contact with clients.
I think the last point is the key. I sub-contract stuff to 4 different local book-keepers. In every case the client knows this is the case, knows why - to keep fees low - and has a relationship with the person on the ground doing the payroll, data entry or whatever has been sub-contracted.
If I were outsourcing it would need to be under those terms. I'm not sure if that's how outsourcing works or not.
I don't think that the outsourcing of accounting process is a good idea. It still pose a risk in the disclosure of significant data.