Accountants looking to boost productivity and efficiency have invested heavily in new technologies such as cloud accounting and automation. Investment in Artificial Intelligence (AI) is also increasing, though many accountants, and especially those operating smaller Practices, feel there are significant barriers to achieving any benefits in the short to medium term from such expenditure.
UK accountants looking to grow their business understand outsourcing work provides a ready-made solution to secure better returns on their investment. Indeed, accountants who decide not to outsource work are now becoming a minority.
At Initor Global we help accountants access a global pool of talented professionals, we help them increase productivity and efficiency, and improve client service with our outsourced solutions.
If you are thinking about outsourcing, or revisiting a previous decision not to outsource, you may mind the following scenarios helpful to understand why outsourcing is now an essential solution for most UK accountants.
Suppliers of outsourced accountancy services now offer a wide range of services with more benefits
Initor Global has been providing outsourced services to UK accountants since 2006. In the early days, most work we performed involved recurring bookkeeping and year-end accounts preparation. Documents were sent to us over email, and we used spreadsheets to create accounting records and prepare accounts before emailing then back to our customers. The process was long and inefficient, and many accountants preferred to provide services in-house.
Now, almost 20 years later, we help accountants 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. We prepare records in real-time using cloud accounting software and transfer data using secure servers.
Initor Global customers consider the main benefits of outsourcing work to be:
- reduced costs and overheads
- access to a stable team of professionals
- increased quality and consistency of work
- better turnaround times
- improved client experience.
Outsourcing helps manage risk
Accountants diligently maintain registers of risks and measures to mitigate them. Most accountants have identified operational risks around recruiting and retaining talent, managing costs, ensuring compliance, data security and client retention. Outsourcing work can help mitigate such risks, as shown below.
Recruitment and retention
Outsourcing work allows accountants to look carefully at the resources needed to deliver objectives. This may involve increases in client numbers, delivering more specialist services or securing better profitability. Practice managers are able to evaluate the career paths of individuals, shift focus away from recurring tasks and help accountants develop the skills needed to fulfil their career ambitions. There are further mitigations in accessing a ready-made pool of talent and expertise without the risk of employing a full-time resource.
Cost management
Outsourcing work secures immediate savings through lower employment costs, which are typically 50% less than a UK resource. Expensive recruitment mistakes can be avoided by employing an offshore accountant who can work flexibly with the onshore team. Initor Global customers have the flexibility to commission resources when they need them on an ad-hoc (pay as you go), half time equivalent or full-time equivalent basis.
Quality and compliance
Most accountants test the outsourcing process with a small amount of lower risk work, such as bookkeeping, VAT return preparation or year-end accounts preparation. Outcomes are then evaluated 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 minimise the risk of errors and omissions and gives the onshore accountant more confidence to outsource more complex work as the relationship develops.
Data security
Protecting client data and Intellectual Property presents a significant risk to any accountant regardless of Practice size. Fines from regulators for data breaches are high and there can be significant damage to an accountants’ professional reputation. When engaging an outsource supplier, the onshore accountant can mitigate these risks by reviewing internal systems and processes to ensure data can be transferred securely. This usually involves the outsource supplier accessing client servers using secure login arrangements. If this isn’t possible, most outsource suppliers use secure file hosting services or password protected documents, though risks of data breaches may increase where high volumes of client information 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 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 risks around data security and the action required in the event a data breach occurs.
Client retention
Outsourcing can handle many of the administrative tasks involved in taking on clients, such as registering information with HMRC and Companies House and submitting required documentation. Outsourcing such work creates the capacity for in-house accountants to understand the needs of new clients and risks associated with the engagement.
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 understand any change in the risk profile in clients individually or collectively.
Outsourcing work improves client experience
Many potential clients contact accountants via websites or using App technology. Some accountants employ customer service professionals to deal with such contact and other non-accountancy related tasks. Some accountants are successfully using ChatGPT to respond to questions from clients. Others are using automated messaging to progress work. The best outsourced suppliers will adapt to the changing needs of UK accountants and their clients, supporting continuous improvement in services. To evidence improvement, real time data can be used about every task the outsourced supplier completes and compared to the equivalent in-house performance.
Accountants often seek to increase the number of clients through competitive pricing, though 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 additional capacity for more direct contact which adds value to the client relationship. Outsourcing work enhances these contacts by delivering services with improved turnaround times and higher quality.
Outsourcing work helps build a more cohesive business
Outsourcing work succeeds where Practice management is clear on how the arrangements will support staff and nurture the desired culture. Accountants who implement outsourcing successfully are comfortable with innovation and delivering change. Integrating the outsourced accountants into training, team meetings and other staff updates helps build relationships and contributes to the overall culture of a Practice.
While accountants have used outsourcing successfully for many years, smaller Practices (and especially Sole Practitioners) still perceive barriers to engaging an outsourced partner, though they are increasingly becoming a minority.
Investment in new technologies such as cloud accounting and automation of tasks means smaller Practices can introduce outsourced partners into their day-to-day operations with the minimum of disruption. This allows Practices to increase their capacity and range of services to clients without taking on the additional risk and costs of direct employment. Investing time with the individuals provided by the outsourced partner will introduce Practices to new ways of working, a different mindset for delivery and a more cohesive business.
Conclusion
Using an offshore supplier is increasingly becoming the normal way of doing business for UK accountants. Outsourcing work helps support delivery of core business objectives, better profitability, and growth.
Initor Global’s outsourced tax, accounting and payroll services are suitable for all client engagements – from sole traders and micro businesses to 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 hello@initor-global.co.uk.