The fact can not 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 preparation of accounts, monthly management, bookkeeping, filing tax/VAT returns, payroll processing, etc.
As a strategy, what tends to happen is, 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, lack of skilled talent pool availability. Since many years, accounting industry in the UK has been grappling with finding the right talent pool at the required time. This has been the problem since 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. Xero, QBO, SAGE, IRIS, FATHOM, Receipt Bank, TaxCalc, etc have been used extensively off lately to do the number crunching. On the question of outsourcing, if it is effective; many industry analyst and speakers at seminars and conferences time and again have unanimously mentioned that outsourcing of transactional processing works helps accounting firms, which just does not save the 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 an attractive offshoring geography like India & Philippines. Major motivation may come from 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, 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 understood the motivation, it is very essential to gauge on the critical parameters like Quality, TAT & communication skills of the team of your potential outsourcing vendor. As an accountancy firm, it is highly likely that you may have developed a unique working culture in your practice. Observing the working culture of the vendor enables you as an accounting firm to understand the gap between your business culture and your vendor’s working culture. Few points can jot down to bridge the gap analysis.
- Free trial. Take the free trial services of your vendor through a couple of jobs. This shall also enable you to gauge on 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 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…