As accounting takes on more of a specialised role focusing on strategic decisions and overall capital optimisation, the case for outsourcing part of the client accounts to a third party rather than managing them in-house has become stronger in the past decade.
Here are five myths in outsourcing that previously pushed away many accountants from the option:
1. Knowledge about UK accounting
Since the function was outsourced to countries like India, Thailand and the Philippines, there was a concern about their proficiency in UK accounting. Outsourcing does not mean having to take the trouble of walking the third party accountant through how the function works.
There was a time when many accountancy practices still hesitated (some still do) to outsource their workload. Naturally, several myths circulated about its alleged risks.
The thing is, outsourcing has evolved a great deal and is by far the most efficient option for accountancy practices alike that wish to focus on their core business rather than spend hours doing their clients’ books or payroll.
Experts in their field have extensive experience in how accounting works across different countries and industries and can take over with very little hand-holding. Much of the time, the handover takes only a few days.
2. Control over the quality of output
Many accountants have shown their reluctance to outsource as they fear that they will no longer have control over the output of their client’s accounts. That is simply not true.
Outsourced accountants receive continuous training on the latest tax laws and topical industry-related issues and best practices to deliver the best possible service to accountancy practices. They understand the implications of accessing sensitive information remotely.
However, despite the geographical gap, they regularly share financial statements and provide real-time glimpses whenever the accountant wishes it.
Besides, modern outsourcing firms all have cloud presences. Stellaripe has a team of cloud accountants, for instance. That means, if you and your staff are not adept at using the cloud, Stellaripe can step in and pick up any accounting task for you — anytime, anywhere, from any cloud-enabled software.
That also means that with a little bit of training, you can also access the data on the software as and when you like. Moreover, the ownership of all data remains with you, and you can request alterations or new operational modes whenever necessary.
3. Data security
One of the biggest deterrents to outsourcing is fear about data security when accounting and financial data goes to a third party.
The truth is that outsourcing firms invest considerable amounts of money in top-notch accounting technology with the most secure encryptions.
They can even work remotely, so the data never leaves your servers. You, therefore, can rest assured that their client data is as safe as it can be. Stellaripe, for instance, logs in to your system using remote desktop software.
We access your clients’ files on your system without having to transfer them to our servers. Once the job is complete, we notify you so that you can review it. Simple.
In addition, we have taken various data security measures such as IP address restrictions, firewall defenses, 256-bit bank-level encryption for data transfer and management, biometric scanners and access card-based security, VPNs, and disabled USB ports to ensure the data always stays protected — no matter what!
4. Deadline management
It is wrongly believed that outsourcing to a third party means losing control of when deliverables come in. Just like you, outsourced accountants are aware of all relevant due dates for filing compliances and will complete and prioritise tasks accordingly.
Moreover, modes of online communication and access to direct UK phone lines enable prompt follow-ups, and outsourced accountants can quickly convey any specifications about deadlines.
Perhaps the most common myth that circulates about outsourcing is that the third party will charge exorbitant fees.
However, most such services are competitively priced. They will bring about overall cost savings for you and your client by accessing efficient, trained and qualified offshore talent resulting in a cost effective solution. For instance, Stellaripe doesn’t charge any set-up fee, unlike many other outsourcing firms.
Moreover, the accountancy practice can scale down the number of outsourced people at any time and pay for only the resources used. It is thus a much cheaper option than hiring a full-time team of expert accountants.
Accounting outsourcing today
Recent advances in technology have enabled outsourced accounting to grow considerably from the early days of offshore outsourcing. While the original principle of cost-effective operations has remained the same, technology enables it to happen faster and with stronger results. Here is how third-party accounting today can support your clients:
1. The shift to the cloud
The cloud enables accountants to log in from anywhere and complete a wide variety of tasks. Anyone with an internet connection can do it, from data entry to balancing books to accounts and tax return production to even personal assistant tasks. This technology has made real-time accounting and accessibility a possibility.
AI and machine learning have brought about prodigious improvements in the speed at which routine tasks can be completed. In addition, AI and Robotic Process Automation (RPA) have also been applied successfully to speeding up problem-solving tasks and predictive data processing.
Efficiency is always touted as one of the primary benefits of automation and its integration into financial systems. For instance, various receipt management tools like Dext, Autoentry and similar apps save your practice valuable hours every week and free up your best people to concentrate on what really matters.
Similarly, accountancy practice management cloud based software like Accountancy manager, Senta, and Pixie and many more like these supports automated onboarding, reminders, workflows and chasing, and help you drive excellent service delivery and focus on adding value to your clients instead of just providing compliance services.
3. Process improvement
With their expertise in accounting processes, outsourcing firms such as Stellaripe can assist your clients with process improvements in functions across the board.
Particularly for legacy accountancy practices that may rely mostly on traditional processes, outsourcing firms can use their experience to analyse their current operating model and provide an appropriate roadmap for process automation and the removal of redundancies.
And for digital-first clients, such assistance can help them become even more operationally nimble because of outsourcing.
In a nutshell, outsourcing firms work with all types of accountancy practices — small and big, fast-growing and established.
Hence, they can share their opinions and expertise in implementing the industry best practices and suggest what may work well and what may not for your practice and clients.
Advisory accounting involves providing accounting support to practices and other value-added services such as strategy, consulting, automation and use of suitable tech and app advice.
It can help widen the revenue stream and start a forward-facing conversation for the accountants as it allows their clients to make smarter and more profitable decisions than if the practice provided simple compliance accounting services. Today, most accountants aim to deliver advisory support to serve their clients better.
Over to you
It is projected that employment for accountants will go up in the coming years, with a focus on advisory roles and the application of sensitive information.
There is already a sustained need for data-focused smart professionals who can quickly gather and process business intelligence from a range of sources and communicate strategic insights.
Moreover, technological advancement is no longer an option but the surest way forward for business success.
With accounting outsourcing and the judicious use of automation, accountancy practices can help businesses stay on top of their finances and be free to focus on core activities and strategic decisions. A systematic, goal-oriented partnership between people, resources and technology is important.