How to: Outsourcing

We’re all guilty of spending too much time on low-value, repetitive tasks that take us away from the work that could make a real difference to our businesses and our customers.

Technology, and the automation it delivers, has gone some way towards freeing us up from some of the more mundane processes, particularly considering the power of accounting software platforms.

At the same time, there is another level of expertise that simply can’t be automated, but is still getting in the way of growth, negatively affecting productivity and profitability, and potentially introducing risk by taking eyes off more important tasks. They’re the jobs that are ripe for outsourcing.

What is outsourcing? At the IFA’s International Conference 2023, Initor Global UK’s Robert Grant, Head of Customer Experience UK & Ireland, said, “In its purest form, stripping it back, it’s when a business engages a third party to perform tasks, handle operations, or provide staff or services on its behalf”.

“The resource provider can be based offshore or even in your own territory. It can involve a dedicated person who will work as part of your organisation, or it can be a team who is dealing with work on a week-to-week or month-to-month basis.”

In fact, accounting businesses know exactly what outsourcing is – they exist because other businesses outsource their accounting needs to them.

So, how do accounting businesses best prepare to outsource more of their own work?

Communicate the purpose of outsourcing

Success in outsourcing is all about preparation and communication, Grant says.

“Outsourcing work succeeds where the senior management and decision makers in an accounting practice are clear on how the arrangements will support staff and nurture the desired culture,” he says.

It’s important for leaders in accounting businesses to understand that some staff will have concerns about what outsourcing means, for their own work and for the security of their jobs.

So, if the business is outsourcing to enable growth, and to give staff the time and space to do higher-value work, it’s vital to communicate that to staff. That way, Grant says, staff will see it as a positive and will buy in, helping to make the transition a success.

“Being open about the aims and benefits of outsourcing work will address any concerns individual accountants have about their role being diminished or removed completely,” he says.

Include outsourced staff in training and meetings

Outsourced partners can carry out numerous roles, from short-term, hourly resources to full-time equivalent accountants, Grant says.

If the outsource supplier has people who regularly work on your company’s behalf, get to know those people and involve them in staff training as much as possible.

“Integrating the outsourced accountants into training, team meetings and other staff updates helps build relationships and contributes to the overall culture of a practice,” he says.

“Investing time with the individuals provided by the outsourced partner will introduce practices to new ways of working, a different mindset for delivery and more diverse teams, enhancing the overall organisational culture.”

Bring outsourced staff into your systems

Accountants most likely to implement outsourcing successfully, Grant says, are comfortable with innovation and delivering change. That means they are likely to use technologies that enable collaboration across time zones and borders.

That technology is one key to the success of the outsourcing process.

“The 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,” Grant says.

“This allows practices to increase their capacity and range of services to clients without taking on the additional risk and costs of direct employment.”

Get it right and you’ll grow

The purpose of outsourcing is the removal of specific tasks. But the power of outsourcing is the ability to grow, particularly at scale, with less risk and greater certainty.

Larger accounting practices make outsourcing a regular part of business. Smaller businesses and sole practitioners often perceive barriers to outsourcing, particularly around data security, quality of work and return on investment.

However, when planned and executed properly – including choosing a firm with values aligned with your own, and working with people who make the effort to understand your business – outsourcing improves data integrity and boosts client experience, Grant says.

“Outsourcing can stabilise and improve your service delivery arrangements,” he says. “It’s very helpful to eliminate backlogs of work and it can prevent reoccurrence in the future.

“It improves productivity and profitability, specifically through efficiency gains but also through reduced costs. It helps practices build capacity, resilience and scalability. It can also improve client experience through better turnaround times.”

It is a good idea to arrange a site visit to the offices of the outsourcing business, to see their set-up first-hand and to discuss issues such as data security, Grant says.

What should you outsource?

What type of work is best outsourced? Start with low-hanging fruit, such as bookkeeping or VAT work, then work your way up.

It depends on the practice, Grant says. An outsourcing plan should be customised to a business’s unique needs.

Any type of work that accountants do can be outsourced, but if an accountant has a specialisation in a specific area or clients have particular expectations, then that should all be considered during the planning process.

Timing of work may be just as important to consider as type of work. A business in a high-growth period may benefit from short-term outsourced talent to onboard clients. A business struggling under month-end deadlines may use extra hands during one week of each month.

Used well, external resources can enable internal team members to take on a richer mix of higher-value work, and can power a previously unimagined level of scalability. That’s good for the business, staff and clients.