UK accounting and USA CPA firms are going through a period of constant change as more and more cloud-based accounting softwares are being used by businesses. It has become impertinent for USA accountants to strike a balance between managing bookkeeping and providing sound real-time advice to their clients. This is where accounts outsourcing plays a pivotal role.
Bookkeeping is a low-value transactional work. Accounts outsourcing helps the USA CPA firms to focus more on the critical aspects of the business and to save costs by not hiring in-house accountants to carry a low-value task. Instead, outsourcing to a competent firm gets the job done in a faster and efficient manner. Perhaps one of the biggest advantages of outsourcing is that there is no fixed cost commitment. The cost depends entirely on the volume of transactions. Furthermore, a sub-par in-house bookkeeper increases the associated risks whereas an outsourcing company not only takes on these risks but also helps mitigate these risks. Not only this, firms have more time to work on the business and not in the business.
This means more time to focus on increasing revenue, building and expanding the existing offering, without having to perform day to day tedious tasks. Every one of us has seen the finance team wasting innumerable hours working on the BAS, when this time could be better utilised, for example on planning the budget or financial analysis. Nearly two-thirds of accountancy firms (64%) in the UK are expecting to outsource core services in the future in order to keep a competitive edge in the industry, research by Accountancy Age and ForrestBrown has found.
To put it simply, accounts outsourcing makes good business sense as realized by many.
Due to multiple factors, out which the lack of skilled talent pool, which can work on the accounting softwares, being the primary; accounting firms, regardless of their size, have been outsourcing the transactional work like bookkeeping, financial reporting & accounting work to Indian & Philippines outsourcing companies to realise the benefits of outsourcing.
As per industry leaders, analysts and speakers in the Accountex, outsourcing trends will increase in the near future so that accounting firms could focus more on their client relationships & business development while working on high-value work like predicting cash flows, consulting, advisory and data analysis, etc.
Thus, it becomes very important to realize the value of quality delivery from your outsourcing vendor. Below are few pointers you can have a look at which shall help you to decide on your outsourcing vendor.
- Take a free trial from your vendor: To gauge their work quality & communication and cultural gap between your business and your outsourcing vendor, give 2-4 jobs to your vendor which should be a mix of slightly normal to complex so as to understand their competency. Enquire on their quality assurance & staged review process.
- Give your vendor, marks on the KPIs – Accuracy, Communication & Turn Around Time: Monitor the KPIs on each job and give marks out of 10 and calculate the average of the total of the jobs on these KPIs. This shall help you understand the competency of your potential outsourcing vendor. Try to analyse their weakness and strengths as per your business strategy and your desired outcome so that you have clarity and this will further help your decision whether to go with your vendor or not.
- Understand the culture of your outsourcing vendor: Besides gauging on their technical competency, it is also essential to analyse their work culture which plays important role in longer relationship with your outsourcing vendor. Analysing their attrition shall help your understand and low attrition also helps your practices to expect a stable relationship. Also, have a look at the background of the directors’ experience, as having sound knowledge of accounting experience of the senior management helps in understanding the operational mix of the outsourcing company.
- Data security: With changing scenarios where working globally has widened the opportunities but also broadened the risk of data vulnerability. With new technology and more firewalls to follow, outsourcing firms are spending a hefty amount to create the safest online vault for client’s data. CEOs, accountants must ask about all the data measures, the alternative plan to prevent data loss and other security measures to prevent abuse and exploitation of system vulnerabilities internally and externally.
Read our other blog: Benefits of Creating Offshoring Team for the UK Accounting Firms