The past two decades have seen an exponential growth in the amount of accounting work being outsourced. While there is no doubt that outsourcing can be helpful to your practice, determining the right time to do so is not cut and dried.
Here are some points that may help you with this important decision.
When you’re not satisfied with your margins
Outsourcing can help increase your profit, especially when you offshore the work to a region that has a greater availability of qualified resources. While the cost benefit varies by function and volume of work, you can save as much as 50% – sometimes even more! That’s literally doubling your yield!
Tip – The more clarity you have about the volume of work you can commit to, the better your chances of getting the best possible pricing.
When you’re not growing
An easy exercise is to look at the number of new clients your business has acquired in the past 5 years. If you find the annual average to be declining or remaining steady, your practice may be stagnating. When the majority of your time is spent on repetitive weekly & monthly tasks, you lack the time and energy required to meet prospects and sign up new clients.
Outsourcing the low value (but critical) tasks will free up your time and enable you to build your business.
When your staff or clients are dissatisfied
Performing repetitive compliance tasks week after week, month on month can cause even dedicated employees to feel disoriented. You may see signs of complacency, boredom, or errors. LinkedIn’s Workplace Learning Report 2022 (pg. 11) reveals “Opportunities to learn and grow” as the #1 driver of employee satisfaction and work culture. In 2019 this driver was ranked at #9! Clearly, when employees do not learn / do anything new at the workplace, their enthusiasm and motivation deteriorate rapidly.
“Opportunities to learn and grow” is the #1 driver of employee satisfaction and work culture.
LinkedIn Workplace Learning Report 2022
Outsourcing some of your tasks – such as bookkeeping, accounts production, payroll administration, tax – will allow you to upskill your employees and bring them up the value chain. This in turn will free you so that you can allot more time to providing advice and value-added services to your clients, thus increasing satisfaction levels.
But…when?
A common mistake by firms that outsource for the first time is that they do so in the peak season, when the workload is high.
Consider your outsourcing partner as being no different than a new employee. They have the necessary knowledge & skills but they don’t know your clients or your processes, guidelines, and working style. The learning cycle cannot be discounted; it is an essential investment in the initial stages that will reward you several fold in the long run.
“Initiating outsourcing when you are already overwhelmed with your workload is not the wisest of ideas”
Thus, outsourcing when you are already overwhelmed with your workload is not the wisest of ideas. In case of discrepancies, you would end up spending time addressing them, and the entire exercise may seem futile.
We recommend that you initiate your outsourcing activities during the low season. This will allow you to review the work thoroughly and compile the feedback you wish to share, while also leaving time to make necessary changes before your work is submitted to your client.
VGlobal First supports accountancy practices in the USA and the UK with outsourced accounting services that include accounting, bookkeeping, payroll administration, management reporting, and tax preparation.
If you’re considering outsourcing as part of your growth strategy, click here to request a call back or write to us at info@vglobalfirst.com for a free, no commitment consultation.
