The fact cannot be denied that the accounts outsourcing industry is picking up and numerous accounting firms from proprietorships to the top 20 accounting firms have been outsourcing their transaction processing services like payroll processing, preparation of accounts, bookkeeping, monthly management, filing tax/VAT returns, etc.
As a strategy, what tends to happen is, that their accountants get freed from mere number crunching and the accountants can be utilised in more valuable tasks such as strategic consulting and advisory to their clients. This trend is occurring in almost top accounting firms as per our decades of observation and experience while dealing with UK accountants.
Apparently, another critical reason for choosing outsourcing as a strategy, especially by comparatively mid-sized accounting firms is the lack of skilled talent pool availability. The UK accounting industry, for years, has been dealing with the challenge of finding the right talent. This has been the problem for a while, that is being faced by many practices, which is due to the supply side crunch of the accountants.
Today most of the accounting work is software-driven. SAGE, IRIS, Xero, FATHOM, TaxCalc, have been extensively used for number crunching. On the question of outsourcing, if it is effective; many industry analysts and speakers at seminars and conferences time and again have unanimously mentioned that outsourcing transactional processing works helps accounting firms, which just does not save cost, however, it also helps them up their value chain. Click here to read more on the benefits of accounts outsourcing.
Below are the key points through which you could gauge the effectiveness of outsourcing for your accounting practice in specific:
- The main motivation for outsourcing the work. Try to assimilate the motivation of your outsourcing your transactional work to a vendor in attractive offshoring geography like India & Philippines. Major motivation may come from the cost-cutting side which shall make you more competitive in your geographical territory. Or it could be providing the premier services to your clients like strategic advisory, consulting and business strategy, and data analytics so that you could focus more on valuable tasking by outsourcing transactional work.
- Gauge the technical KPIs like Accuracy/Quality, Communication & TAT. Once you have a clear understanding of the motive, it is crucial to evaluate the team’s performance on important factors like quality, turnaround time, and communication abilities. It is very certain that your accounting firm has created a special working environment for its employees. You as an accounting company can recognise the differences between your corporate culture and that of your vendor by paying attention to how they function.
- Free trial. Utilize your vendor’s free trial services on a few projects. This shall also enable you to gauge the security policy and parameters of the vendor you are testing. As GDPR has been enacted and Is a reality, it is important to take note of your vendor’s security measures besides observing the services through a free trial.
Of all the points above, if you seem to be satisfied with your vendor, you could start working towards the transition by making the process go live and signing the contracts. If for some reason, you do not like the process and you believe that it may not work for you because of any technical or cultural reason, then outsourcing may not be the right fit for you at that time.
Let us know your thoughts in the comments below…