Almost all accountants are firmly focussed on the need to maximise the amount of profit from providing services. There are occasions where accountants may provide services at a lower fee or decide to make no margin at all – for instance when seeking new clients or introducing new service lines.
Increasingly accountants are looking at the value for money (VFM) obtained from their services, looking beyond the bottom line and towards the overall performance of the business in terms of its economy, efficiency and effectiveness. Outsourcing work can help any accountant improve operational performance, profitability and secure better VFM.
What value for money means for an accountant
Any accountant looking to improve outcomes will need to find ways to measure operational aspects of the business. These measures (or targets) must be considered alongside financial indicators and any change in the value of the business to owners and stakeholders. Using an integrated suite of performance indicators enables an accountant to understand how they are using resources and the VFM they are achieving over time.
The key drivers of VFM are economy, efficiency and effectiveness and the following are definitions are commonly used:
Economy: ensuring the quantity and quality of resources at the lowest possible cost.
Efficiency: maximising outputs from the use of resources.
Effectiveness: the extent to which the business is achieving objectives.
A good measure of non-financial performance is how well services are being provided to clients. This means understanding how individuals and the business as a whole are performing. Some simple measures of operational performance (and VFM) include:
- Are turnaround times in line with expectations?
- Is work produced by accountants of sufficient quality and compliant with accounting standards?
- Are deadlines comfortably met, with the minimum of fuss for clients?
How outsourcing can help
While accountants aim to balance objectives for economy, efficiency and effectiveness, this can be difficult to achieve, and priorities may change over time. Increasing the number of clients or widening the scope of services offered may require more investment in people and infrastructure in the short-term. Delivery of recurring services may be under strain as accountants get to grips with the demands of new clients or delivering more services.
This is where outsourcing can help secure better VFM through:
- reduced costs and overheads
- access to talent and resources
- increased quality and consistency of work
- better turnaround times
- improved client experience.
Accountants can outsource all end to end accounting processes, including bookkeeping, year-end accounts preparation, company tax, payroll, VAT accounting, personal tax, and secretarial services. Systems and processes to complete work are highly efficient with rapid turnaround times. Work can be completed in real-time using cloud accounting software using secure servers, ensuring the security of data at all times.
Measuring value for money
Economy
Accountants have access to a wide range of data about the salaries available to accountants depending on their role, responsibilities, sector, qualifications and years of experience. Data is provided nationally and regionally by reputable organisations. It is therefore relatively straightforward to compare the costs of employment across the profession.
Accountants can use this data to help develop workforce plans to deliver services at the lowest possible cost. Investment in automation, Artificial Intelligence and cloud accounting software can help achieve a better mix of skills and experience which do not always require the employment of a fully qualified professional.
To achieve better economy in the use of resources, many UK accountants have decided to outsource work, securing immediate reductions in overheads. Outsourcing work delivers immediate savings through lower employment costs, which are typically 50% less than a UK resource. Using an offshore resource frees up capacity for onshore accountants to focus on adding value to the business and the customer, understanding their needs, and delivering better outcomes in terms of quality and turnaround times for work.
Outsourcing work also offers access to a global pool of resources to help address peaks in work or remove backlogs. Accountants have flexibility to commission resources when they need them on an ad-hoc (pay as you go), half time equivalent or full-time equivalent basis.
Efficiency
As highlighted above, information is readily available to accountants on the cost of the resources they use. These costs can be compared to other accountants who are similar in size and seeking to attract the same type of client. Many accountants publish information online about fixed prices and services, enabling accountants to judge whether they are securing better or worse outcomes for the same fees. Accountants will usually set targets for turning around work, contacting clients or increasing client numbers which can all be compared to the cost of achievement.
Outsourcing can help improve the efficiency of service delivery through:
- Improved consistency and quality of work: securing the benefits of better productivity and focus on recurring tasks
- Access to a wide pool of talent and experience: always available to meet peaks in demand for services and to clear backlogs of work
- Professional expertise: particularly where in-house skills are insufficient to meet the needs of clients
- Staffing issues: can be quickly resolved where accountants leave at short notice or where posts are hard to fill with onshore resources
- Change management: making the most of opportunities provided by cloud accounting, Artificial Intelligence, and automation
- Risk management: by having an outsource provider ready to step in when resources are needed most.
Effectiveness
Accountants measure progress towards objectives throughout the year, taking corrective action where necessary. Outsourcing work allows accountants to look carefully at the resources needed to deliver each objective. This may involve increases in client numbers, delivering more specialist services or securing better profitability.
Accountants who implement outsourcing successfully are comfortable with innovation and delivering change. They can implement ‘agile’ working practices and create the additional capacity needed to add value to the business and client relationships. Outsourcing services or recurring tasks allows accountants to grow their business and increase resilience to competition.
Outcomes can be measured for quality, technical accuracy, and turnaround against performance indicators consistent with in-house targets. Integrating the offshore accountants with existing quality assurance and professional compliance reviews helps the onshore accountant understand the effectiveness of service delivery.
Conclusion
With pressure on UK accountants to secure better value for money from scarce resources, using an offshore solution 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 objectives.
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 deliver better value for money, you can book a video call with one of Initor Global’s expert advisors using this link or send an email to hello@initor-global.co.uk.
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