How to Outsource Accounting Services Effectively

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Accountants spend years building a profitable business, investing time and resources in establishing a unique service for clients.  With increased competition across the industry for new customers, and challenges to retain clients, accountants are looking at new ways of deliver services more effectively. Outsourcing services or recurring tasks allows accountants to build capacity to grow their business and increase resilience to competition.

What does outsourcing services involve

Outsourcing means engaging a third party to deliver services usually provided by an internal resource. For accountants, this means most end-to-end accounting processes, from bookkeeping to filing VAT returns, year-end accounts preparation, personal tax work and other secretarial services. Most UK accountants thinking about outsourcing look to offshore territories such as India or Asia due to their long-established operations and lower costs.

Outsourcing services offers significant benefits to a UK accountant. Productivity and delivery of services is improved and there are immediate savings through lower employment costs. There are further benefits in accessing a ready-made pool of talent and expertise without the risk of employing a full-time resource in the UK. Backlogs of work can be cleared, and recurring peaks of work avoided. Outsourcing services allows the onshore team to focus on core business objectives, such as adding new customers, increasing service lines and adding value to the business.

There are of course some risks when engaging an offshore supplier. Some accountants perceive difficulties in tracking work or feel data security is compromised. If the outsource supplier doesn’t deliver under contracted terms, the onshore team may find themselves working to rectify errors or omissions or dealing with an unhappy client.


Choosing which services to outsource and when, along with the right supplier, is essential to implementing an offshore solution successfully. Undertaking a critical review of internal resources and comparing to the capacity needed to deliver work for existing clients and future growth will quickly identify shortfalls which need to be managed. Equally important is ensuring the outsource supplier has the skills and expertise needed to deliver the work which cannot be completed in-house. Obtaining evidence of accountancy qualifications or software accreditations and references from existing customers the offshore supplier works with will help provide the assurances the UK accountant needs.

Most accountants prefer to test the outsourcing process with a small amount of work, such as bookkeeping, VAT return preparation or year-end accounts preparation. Outcomes can be evaluated for quality, technical accuracy and turnaround against key performance indicators consistent with in-house targets.

Partnership working

After the successful completion of the preparation phase, accountants usually look to agree a contract for at least 12 months. The contract should detail which services are to be delivered, how the work should be completed and the associated cost. Both parties need to understand the scope, and limit, of their responsibilities.

Undertaking a review of internal systems and processes can help integrate an outsource supplier to an accountant’s operations. Client data will need to be accessed using remote login arrangements or shared through secure portals. Workflows will need to be updated to track the progress of work outsourced and delivery in accordance with the terms agreed. Communications with clients can be automated to let them know when work is completed, or when additional information or authorisation is needed.

Most outsource suppliers will prepare working papers in a format agreed by the onshore accountant. Asking the offshore supplier to provide any advice or suggestions for improvement in working papers, or if they have a better format, is a good way to build relationships between the onshore and offshore teams.


When outsourcing services for the first time, accountants may overlook the importance of regular communications with the offshore team. Regular video calls between teams will help ensure both parties understand their responsibilities and the role they play in delivering work. If there are difficulties at any point in the working relationship, these should be communicated openly and without blaming either party.

People management

A common misconception among accountants considering outsourcing is their people won’t like it and will feel their jobs or careers are threatened. However, in most cases, outsourcing allows accountants to look carefully at the career paths of individuals, ensuring they shift focus away from recurring tasks and develop the wider skills needed to meet the needs of clients and deliver business objectives.

Individuals may require training in their new roles to understand any new processes and procedures when introducing an outsourced supplier. As careers progress, more specialised training may be needed, for example where accountants take on more advisory or specialist tax work.

When planning for outsourcing, accountants need to evaluate the impact on strategies for recruitment and retention and people development.

Client experience

Managing clients can be resource intensive, and mistakes can be made where expectations about the services to be delivered for the agreed fee differ significantly. The outsourced accountant can manage the flow of communication with a client for the work they are responsible for, enabling the UK accountant to focus on adding value to the client relationship. The best outsourced suppliers will adapt to the changing demands of UK accountants and their clients.

Advances in cloud-based accounting software, and the increase in entrants to the UK accounting market offering Software as a Service (SaaS) solutions, mean many clients are comfortable maintaining their own accounting records, requiring the support of an accountant only at key points in the accounting period. This can lead to significant peaks and backlogs of work where a high number of clients have the same year end or need personal tax services in the lead up to HMRC’s deadlines. While accountants seek to increase the number of such clients through competitive pricing, they often overlook opportunities to provide professional insight and data. By outsourcing tasks such as the preparation of VAT returns or year-end accounts, accountants can create the additional capacity for more direct contact which adds value to the client relationship. The right outsource provider can enhance these contacts through the provision of services with improved turnaround times and higher quality.

Data security

When looking to engage an outsource supplier to process client data, the onshore accountant should review internal systems and processes to ensure data can be transmitted and received securely. This usually involves the outsource supplier accessing client servers using secure login arrangements. If this isn’t possible, most outsource suppliers use secure software file hosting services or password protected documents, though these may not be sustainable where high volumes of client data are exchanged.

When outsourcing work, the UK accountant should always seek confirmation about any GDPR or data security credentials stated by an offshore accountant. They will also need to understand the operational procedures established by the offshore accountant to ensure data security and complete a risk assessment accordingly.

Internal policies and procedures will need to be updated to cover the tasks undertaken by the offshore accountant and the nature of data processed. Some UK accountants decide the offshore accountant should see only limited amounts or anonymised client data; others decide the offshore accountant needs full access to client information to work effectively. Including the offshore accountant in any training or staff can helps ensure awareness of the continuing importance of data security and the action required in the event a data breach occurs, including who to report the incident to.


With pressures on UK accountants to recruit and retain talent likely to continue for the foreseeable future, using an offshore supplier to build capacity and resilience is increasingly popular. Most UK accountants looking to add new clients or increase the range of services they offer see outsourcing as the most effective way to deliver business growth. Accountants can ensure they implement outsourcing effectively by following some simple rules to deliver the outcomes they need.

At Initor Global, we have been providing offshore services to accountants since 2006. Our customers include sole proprietors, as well as small and medium sized UK Accountancy Practices. Our outsourced tax, accounting and payroll services are suitable for all client engagements – from sole traders and micro businesses to SMEs and large companies.

If you are an accountant looking to outsource services, increase margins and help your client’s thrive, you can book a video call with one of Initor Global’s expert advisors using this link or send an email to