It is a brilliant solution to make jobs easier and also has become a major trend in human resources over the past decade. Basically, it is the practice of sending certain job functions outside the company instead of getting them done in house.
More and more companies are choosing to outsource as a method to grow efficiently. These days accounts outsourcing industry is picking up this trend, and we can’t deny the fact that numerous outsourced accounting firms have been making use of outsourcing services for their transaction processing jobs like monthly management, bookkeeping, preparation of accounts, filing tax/VAT returns, payroll processing, and many others. These firms include proprietorship firms to the top 20 accounting firms as well.
The companies go through all this strategy just so their accountants get freed from mere number crunching and their expertise can be utilized in more valuable tasks which include tasks like advisory to their clients and strategic consulting. Most of the top accounting firms are opting to follow this trend as per our observation of decades and experience while dealing with the UK accountants.
Apparently, lack of skilled talent pool availability is another critical reason for choosing to outsource as a strategy, especially when we are considering comparatively mid-sized accounting firms. Accounting industry in the UK has been grasping at the straws since many years for finding the right talent set at the right time. This problem has been in the market since a while and it is being faced by many companies. And it is due to the supply side crunch of the accountants.
Thanks to the continuous developments in technology, most of the accounting work is software driven. We use Xero, QBO, SAGE, IRIS, FATHOM, Receipt Bank, TaxCalc and many such extensively these days to do the number crunching. Time and again, many have questioned the concept of outsourcing and its effectiveness. But, many industry analyst and speakers at seminars and conferences have unanimously mentioned and agreed upon the fact that outsourcing of transactional processing works helps accounting firms in a big way. Along with saving the cost, however, it also helps them up climb their value chain.
To sum it all up effectively, below are the key points through which you could gauge the effect of outsourcing for accounting firms :
Motivation for outsourcing: It is very important to assimilate the motivation of your outsourcing. Consider yourself outsourcing your transactional work to a vendor in attractive offshore geography like India & Philippines. Now, the cost cutting aspect can always be a major motivational factor which will eventually make you a more competitive prospect in your geographical territory. Besides that, it could also be providing the premier services to your clients like strategic advisory, consulting and business strategy, data analytics so that your focus will be on more valuable tasks by outsourcing transactional work.
The Technical KPIs are the key: Once you have understood the motivation, it is very essential to estimate the critical parameters like Quality and TAT. Also, the communication skills of the team of your potential outsourcing vendor play an important role. It is highly possible that you may have already developed a unique working culture in your practice as an accountancy firm. In order to successfully bridge the gap between your business culture and your vendor’s working culture, understanding of your own working culture and keen observation of your vendor’s working culture enables you as an accounting firm. Few points can also be jot down and analyzed to bridge the gap.
Trial first, Finalize later: Always opt to take the free trial services of your vendor through a couple of test jobs. What this will do is enable you to form an opinion on the security policy and parameters of the vendor you are testing. As GDPR has been enacted, besides observing the services through a free trial, it is very important to take a note of your vendor’s security measures.
Now, if you have carefully considered all the points above and you seem to be satisfied with your vendor then you could start working towards the transition. You can then make the process go live and proceed with signing the contracts. Again, if for any reason, you do not like the process and you believe that it may not work out well for your company because of any technical or cultural reason then outsourcing may not be a right fit for you at that time.