Outsourcing trend shores up at Accountex 2018

30th May 2018
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Accountex this year saw a number of outsourcing firms looking to use Making Tax Digital as a launch pad. But for practitioners, outsourcing solves a handful of other practice pain points.

At Accountex this year a number of outsourcing firms returned from their trade show hibernation. In fact, if you glanced over the Accountex programme you’d find that eight outsourcing firms attended the event this year.

Nestled among the usual cloud vendors, the conversations on the outsourcers’ stands didn’t differ too much from the MTD-talk that reverberated around the ExCel centre.

It’s that shift towards digital records and the quarterly reporting that lured Kenny Kshitij Jain, the head of UK operations at Mindspace outsourcing, back after a year break because “every accountant now has a lot of back-office work that they need to do”. 

The need for accountants to build out their services to support MTD also explained digital outsourcer Advance Track’s first time at Accountex in five years. Advance Track’s MD Vipul Sheth told AccountingWEB that he believes outsourcing would be needed to relieve practitioners from “working at the coalface”

Now while automation and regular bookkeeping go some way in preparing for this, as Global Infosys’ CEO Arun Ravindranthan argued, firms will still need someone in the back-office.   

"That is going to have an impact on the deliverables when a lot of firms of accountants don't want to do physical processing anymore," he said. "They want to do more advisory services. Someone has to do the donkey work."

Access to talent

Those are some of the reasons why the practitioners AccountingWEB spoke with at Accountex have seized outsourcing. As Paul Miller from Cornish Accounting Solutions put it, outsourcing solves “where you focus your resources”.

Echoing this point, AccountingWEB regular Glenn Martin, who was contacted by six outsourcing companies before the event, told AccountingWEB that his interest in outsourcing was piqued by “the endless resources [it provides] without having to recruit”.

More than the MTD opportunity that enticed the outsourcers back to the trade show, it’s the access to talent that is an attraction to small practitioners. “The need for outsourcing is increasing because it's the only way they can replace the lack of staffing in their offices,” said Global Infosys’ Ravindranthan.

The recruitment crunch has become one of the biggest pain points for practitioners. As Mark Telford, the director at Telfords Chartered Accountants noted: “I've got a set up where I can do with a qualified accountant who if they came to work with me, some days they'd be in the office on their own, other days there might be two other people in. Now they are going to get bored senseless if they've worked in a bigger practice.”

The need for outsourcing is increasing because it's the only way they can replace the lack of staffing in their offices

So rather than hire someone to take care of this non-client facing commoditised work, outsourcing has enabled practitioners like Cornish Accounting Solution’s Miller to have the UK team “client-focussed” and to have a “qualified person offshore for half the price than we can in the UK”.

For Glenn Martin, this route has saved £1,000 a month, and for that, he says, you get a full-time chartered accountant.

 As the doors open at Accountex 2018, the delegates pile into the ExCel centre exhibition hall.

Enables practice growth ambitions

Telford had organically grown as a sole practitioner. Simply through doing a good job and picking up client referrals he found himself in a position where he wanted to attract more quality clients. But he hit a quandary: in order to do that, he had to free up some time.

The only way he could really continue along this practice growth trajectory was to offload the back-office work. His decision to outsource accounts production and payroll has freed up 20 hours a week.

“That’s 20 hours a week which I can then use to improve the practice: the old traditional work on your practice, rather than in it,” said Telford. “I'm in a position where I am able to do that now.”

With MTD for individuals not set in stone and the GDPR noise sure to quiet, Glenn Martin viewed this year’s Accountex as the “window of opportunity” for practice growth. As he gets booked four to five weeks ahead, outsourcing has allowed him to do things quickly.

That’s 20 hours a week [freed through outsourcing] which I can then use to improve the practice: the old traditional work on your practice, rather than in it

“If something comes in or if I need this urgently, I was struggling to do it without putting somebody off,” he said. “But with outsourcing you can scan the work to them, saying it's a major job, and you can get jobs back in two-three days. A traditional practice wouldn't be able to do that.”

By speeding up the turnaround time on accounts and tax returns Telford is now in a position where he can have “current conversations” with clients. “We are talking about very recent information, relevant, and it's not the traditional talk about past events, we're talking about current information and that can only add value to the service you provide.” 

For Cornish Acounting’s Miller outsourcing not only reduced the fixed overheads but growth-wise, it also taught the firm the benefits of systemising. “Outsourcing by the very fact you're sending things offshore means you'll have to have a process because they don't necessarily see all the records or talk to the client,” he said.

Outsourcing stigma?

Although some are reaping benefits, outsourcing still carries some stigma within the profession. The idea of offshoring work to India or the Philippines doesn’t sit well; that lack of control as sensitive information and work is out of sight. But as Global Infosys’ Ravindranthan pushed back: “In today's age, does it really matter where the person is physically sitting?”

ManilaManila in the Philippines is a popular base for outsourcing.

This feeling is being recognised across the business world. According to Stefan Vermeulan from D&V Philippines outsourcing, “What we see is more and more people are doing it and getting more familiar. That's a big difference because clients, CFOs or companies are doing it themselves.”

Clear transparency is what Global Infosys’ Ravindranthan pegs as one reason why outsourcing is being used by the top 100 firms. “It's not like they're sending a job to an unknown. They have visibility of the work being done on the server.”

Communication is by far and away is the most important thing because gone are the days of the India outsourcing horror stories

And that’s why communication is key to the overall success of outsourcing. Mark Telford has fortnightly zoom calls with the outsourced accounts production and payroll teams. In fact, this factor was more important than price, when he made his final decision.  

“Communication is by far and away the most important thing because gone are the days of the India outsourcing horror stories where you never hear anything and the work comes back incomplete.” He added: "The quality of staff and work is head and shoulders above what you would get from a member of staff in this country."

Replies (10)

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Mark Telford Chartered Accountant
By Mark Telford
30th May 2018 18:11

Hi Richard, good to catch up with you last week.

Outsourcing is really something of a hidden secret and very much under utilised. Those practitioners complaining of being too busy should consider it not just to clear a backlog but as an on-going part of the practice's compliance function.

I wish I'd started using outsourcing much earlier.

Thanks (0)
By Ultra
31st May 2018 07:57

Whilst I understand the uses and benefits I couldn't bring myself to do it.

Previous employers have done it and it was like a dirty little secret hidden in the small print of the engagement letter.

If I knew a solicitor or financial advisor was sending work abroad I wouldn't be impressed and would definitely choose a bank with a UK call centre over one overseas.

In my opinion it's a sorry state of affairs if everybody just ships work off to India.

Thanks (3)
Replying to Ultra:
Mark Telford Chartered Accountant
By Mark Telford
31st May 2018 11:01


If you have two suppliers of resources:
A. Is unreliable, expensive, difficult to get hold of, work is of questionable quality but is based just down the road.

B. Reliable, hard working, excellent communicator, less expensive and based overseas.

Would you chase A just because of locality.

Use B, provide a better quality service to clients and keep fees down.

Thanks (0)
Replying to Mark Telford:
By Ultra
31st May 2018 11:45

No I wouldn't but that's not the point as it's not a fair question.

On the same service levels I would always choose local.

I wouldn't risk the damage to my reputation by selling the soul of my practice overseas.

Clients wouldn't like it as we've had quite a few come to us from practices already outsourcing to India and they are not happy about it, but that's just my experience and opinion.

Thanks (3)
Replying to Ultra:
Mark Telford Chartered Accountant
By Mark Telford
31st May 2018 13:22

"...selling the soul of my practice overseas..."

That's harsh - outsourcing part of the back office function - the bit in the middle that isn't client facing. Giving you more time to focus on providing value to clients.

Each to his/her own.

Thanks (0)
Replying to Ultra:
Glenn Martin
By Glenn Martin
31st May 2018 20:14

Do you have any objections to shipping work off to Receipt Bank for a machine to do what a trainee used to do.

I think your comment about choosing a bank with a Uk call centre not really valid as I don’t imagine clients have to ring India to discuss their vAt as all client management would be done from the UK it’s only the basic transactional stuff that would be outsourced

Do you you object to a Romanian who picks the fruit you eat or the Polish plumber that fixes your tap

We are are operating in a global economy now, the biggest threat we probably have is not embracing technology and keeping pricing high for basic services as if these Indians start approaching clients direct they will clean up the compliance work.

Thanks (1)
Replying to Glennzy:
01st Jun 2018 07:11

Appreciate the comment about ReceiptBank.

However, I think picking fruit and fixing a tap is slightly different to sending sensitive data half way round the world.

I've been put off it in the past by the way firms have kept it hidden from clients and I think that is the main issue.

Thanks (3)
By North East Accountant
31st May 2018 09:08

We all don't like it but are all to blame.

When the like for like insurance quotes come in at £500 and £350 we go for the £350 one. The £500 one has UK call centres and the £350 one Overseas call centres.

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Red Leader
By Red Leader
31st May 2018 16:49

I think at the smaller end of practice, outsourcing isn't being done to save money, it's being done to improve operations. Getting a good qualified to work - and stay - in a small practice is near impossible.

Thanks (1)
By Ammie
05th Jun 2018 10:37

In an ideal world it's the way forward, particularly in view of MTD.
However, we do not live in the perfect world. I am very uneasy working with an unknown quantity and the possible risks. Management and control is near impossible if issues arise. If I was very comfortable with the people I was working with, in terms of reliability and quality of service I would make the step.
We have seen some of the nightmare IT scenarios stemming from overseas services. How many have the resources to deal with something like that? I would struggle.
I have only recently taken on a client whose work was outsourced to India. The work was nothing short of a mess, and certainly not something I would put my name to.

Thanks (2)