Initor Global Guide to Outsourcing Bookkeeping Services

If you are a UK Accounting Practice looking to increase or enhance the scope of services offered to clients, or a business looking to improve the efficiency of Bookkeeping services, you should consider outsourcing to a supplier such as Initor Global.

Many businesses do not know where to start when considering options for outsourcing Bookkeeping services. This blog attempts to break down some of the barriers businesses perceive when considering outsourcing while providing examples of the many benefits which can be secured.

What does outsourcing Bookkeeping services mean for a UK Accounting Practice?

Outsourcing means a specialist supplier (or ‘partner’) will take responsibility for completing the Bookkeeping services an Accounting Practice provides to clients. Most Practices decide to outsource recurring processes such as data input, completion of monthly bank reconciliations or the preparation of quarterly VAT returns.  Others look for bookkeepers to provide added value services, such as management accounts or balance sheet analysis.

The outsourced services will usually be provided offshore from jurisdictions such as India or Asia, and will need to be fully compliant with HMRC’s rules around eligibility of expenses, the UK VAT regime, professional accounting standards and frameworks, and data protection requirements. As a UK Accounting Practice, you will need assurance the outsourcing partner has sufficient capacity, including qualified and experienced bookkeepers and accountants, to ensure a fully compliant service is provided.

At a minimum, you should seek an outsourced supplier who is GDPR and ISO27001 compliant and who can provide assurances over client data security. You should also enquire about the professional bookkeeping and accounting qualifications, and accounting software accreditations the individuals providing your outsourced services hold.

Most outsourcing partners will have experience of cloud based accounting software and will provide services seamlessly to your clients. Integrating outsourced services with the operating framework of internal controls, systems and performance reporting already used by a Practice is essential to ensure the quality of services provided.

Outsource partners can use your customer relationship management (CRM) systems to contact clients to progress work and resolve any matters arising, though some Practices prefer to retain this responsibility.

Why should a UK Accounting Practice outsource Bookkeeping services?

The following paragraphs provide some insight to the benefits a UK Accounting Practice can secure from outsourcing Bookkeeping services.

Professional services assured

UK Accounting Practices recognise that bookkeepers provide essential services to clients and ensure the foundations of any accounting work completed are sound. Finding the right professional bookkeeper for a Practice can be a time-consuming business. Demand for bookkeeping services has continued to increase as cloud accounting solutions have developed and in the light of regulatory changes such as the UK government’s ‘making tax digital’ regime.

With an outsourced solution, businesses will have access to a team of experts who will provide assurance that every monthly bank, credit card and control account reconciliation is completed accurately and on time, and that experts are available to provide any other services commissioned, such as the preparation of VAT returns or statutory accounts.

Reduced costs and increased quality

The cost of outsourcing Bookkeeping services is typically 50% less when compared to the equivalent services provided in-house. With an outsourced solution, there is no need to maintain an in-house bookkeeping service at all. When implementing an outsourced solution, UK Accounting Practices often find the review of internal systems and processes needed secures wider efficiencies for a business, such as the automation of tasks and more effective document management.

With an outsourced partner focused on delivering the tasks and processes an Accounting Practice needs, the quality and accuracy of bookkeeping is improved, with an increase in the quality of services to your clients.

Clients can access more services

Using an outsourced solution allows an Accounting Practice to scale up and confidently offer Bookkeeping services to meet clients’ needs. It also ensures a Practice has the capacity to deliver growth in revenues, and that clients have access to all of the services they need as they prosper.

Reduced risk of service failure

Many UK Accounting Practices provide their Bookkeeping services using a dedicated team of qualified bookkeepers supported by accountants to manage peaks in workload. However, reliance on a small number of professional bookkeepers presents a high risk of service failure should individuals leave a Practice at short notice, and if you cannot access a suitably qualified or experienced replacement in time. With an outsourced solution, an Accounting Practice has access to a large team of experienced bookkeepers who can provide the continuity of service needed.

Data Protection assured

Most Outsource partners will have experience of all major cloud based bookkeeping and accounting software, which can be accessed from their own secure servers. They can also access your Practice server using secure remote login arrangements. Outsource partners can provide evidence they are GDPR and ISO27001 compliant, and that client data is always secure and cannot be downloaded.

Removing recurring tasks helps develop people

Some UK Accounting Practices are nervous about outsourcing any service because of the perceived negative reaction among their people. However, the removal of Bookkeeping tasks from the day to day workload of bookkeepers and accountants means they have more time to spend understanding the needs of clients and upselling services. Less time is spent on tasks such as preparing monthly reconciliations and data management, allowing individuals to focus on their continuing professional development and building the skills needed for the future growth of an Accounting Practice.

When is the best time to outsource Bookkeeping services?

Accounting Practices will need to consider carefully the skills and expertise available to deliver Bookkeeping services, particularly when preparing plans for growth or extending the scope of services offered to clients. Not all Accounting Practices will have sufficient capacity to meet the Bookkeeping requirements of their clients, particularly those with a significant backlog of bookkeeping and accounting work who are most at risk of fines and penalties from regulators for missing deadlines. Practices should consider outsourcing at key stages in their business planning cycle, when taking on new clients or when a peak of work is expected towards the end of the tax year.

What should I look for in an outsourcing partner?

UK Accounting Practices will need an outsourcing partner with the skills, capacity and experience to deliver all Bookkeeping services. Practices should look for a partner with a strong track record of serving the types of clients they engage, whether these are Sole Traders, Owner Managed Businesses or SMEs.

You will need to ensure you have access to operational managers responsible for delivering the bookkeeping work you have outsourced, to discuss any matters affecting your service and to seek opportunities to outsource other recurring tasks for your Practice.

Most importantly, Practices will need assurance the services are provided by professionally qualified and experienced individuals. Seeking references from existing customers of your outsourcing partner is essential to provide an indication of how your relationship will work.

Which Bookkeeping services can be outsourced by an Accounting Practice?

All bookkeeping processes and tasks can be outsourced. Initor Global provides the following services: