The accounting outsourcing era: Are accountants becoming obsolete?

Written by

anshal@thinklittlebig.com

It is not uncommon to see accountants in the UK outsourcing their clients’ accounting work in this day and age. Any function, such as tax preparation or payroll that is labour-intensive or time-consuming can be delegated to a reputable accounting outsourcing service provider.

And for a good reason. Outsourcing frees up accountants to focus on scaling their practice. It helps them reduce the costs of recruitment, training and infrastructural development, and it minimises their workload. What more does an accountant want?

But is outsourcing making accountants obsolete?

After all, the accounting outsourcing company manages the clients’ books, payroll, tax filing, and so on. What is the need for that team of practice accountants?

It is true an outsourced accounting services provider hires employees for its business to perform numerous accounting tasks and is responsible for their pay, benefits, and training, thereby reducing labour costs for the accountants’ practices.

However, that cannot be considered a replacement for the actual practice staff. Outsourced outsourced accounting services providers function more like an extended team for UK accountants.

While the former handles the day-to-day record-keeping, accounts payable, accounts receivable, payroll, tax returns, financial reporting, and other services for the end clients, the latter focuses on specialised services and face-to-face communication.

That could include advisory and business consulting support, budget analysis, and cash flow planning – anything that helps accountants deliver more value to their clients, resulting in higher profits and increased brand reputation.

Now that we have addressed that concern, let us look at the benefits outsourcing can bring to UK accountants.

As accounting took a specialised role focusing on strategic decision-making and capital optimisation, outsourcing part of the client accounts to an accounting outsourcing service provider rather than managing them in-house has gained precedence in the past decade.

1. Business continuity

Accounting is a time-sensitive function, and frequent interruptions can negatively affect the business. For instance, a client may face loss of records, delayed payments, and penalties when an accounting firm’s standard workflow is hampered due to system downtime, inadequate infrastructure, and workforce shortage. COVID-19 just taught us that!

With such gaps in business continuity, accountants often risk losing clients to a competitor or missing deadlines. Through outsourcing, they get to work with accounting outsourcing service providers stocked with adequately skilled and trained Xero- and QuickBooks-certified accountants having the know-how of the UK accounting and taxation laws, offering uninterrupted support and complete peace of mind even in an unplanned service disruption.

2. Data security

Accountants across the UK and the globe are fast embracing the digital shift and recognising that technology is constantly moving forward.

Although the increased use of cloud accounting solutions has streamlined processes for accountants, it has resulted in a massive volume of confidential data, which could be internal or client-related.

Either way, it is the responsibility of accountants to protect it. Even if client accounts are outsourced, the accounting outsourcing service providers go out of their way to exceed the industry standards to protect sensitive financial data.

Stellaripe, for instance, deploys remote desktop software and VPN solutions to log in and access client files on the accounting firm’s system to do the work. No confidential data is ever stored on Stellaripe’s cloud servers.

We have also implemented several information security measures, such as IP address restrictions, a breach notification system, destruction register maintenance, and 256-bit bank-level encryption for data transfer and management.

Other physical security measures include disabled USB ports, limited printer access, and continuously monitored office premises and web access. Unsurprisingly, accountants in the UK rely on outsourcing for data security support.

3. Control over the quality of output

Even today, many accountants are not comfortable outsourcing because they feel they will not have control over the output of their clients’ accounts. However, that is not the case. Accounting outsourcing service providers receive continuous training on the latest tax laws and seasonal industry-related issues to deliver the best possible service.

Stellaripe, for instance, has been built on the provision of UK accounting services for UK accountants. We have extensive and detailed experience in UK taxation, UK practices and UK accounting requirements. In fact, we are frequently better informed than our client accountants, which reflects in our work. Additionally, we implement a checklist-assisted peer review system to assess the quality of financial statements and tax returns we generate for our clients.

Accounting outsourcing service providers generally understand the implications of accessing confidential data remotely and sharing financial statements, and real-time accounting reports whenever requested – despite the geographical gap and different time zones. So, neither the control over client accounts nor the quality of output delivered poses a problem.

4. Process improvement

With their knowledge of accounting processes, service providers are better experienced in assisting accountants in the UK with process improvements in functions across the board. This is especially helpful for legacy accounting firms that may primarily rely on traditional processes. For instance, Stellaripe helps the client automate their entire accounting practice, which includes workflow automation and practice management, invoicing and onboarding of clients, bookkeeping, payroll information requisition, year-end queries, and a few company secretarial tasks.

Outsourced accounting services providers can help them analyse their current operating model and draft an appropriate road for process automation and the removal of redundancies. On the other hand, for digital-first accountants, such assistance can help them become more operationally efficient because of outsourcing.

5. Flexibility and creative freedom

Outsourcing client accounts frees accountants to brainstorm and execute different ways to scale their practice. They know they have the support of an expert team to manage the rudimentary accounting functions for their clients. Besides, at their disposal, accountants have the financial acumen required to minimise red flags and make progressive decisions.

Advisory accounting, for instance, includes offering accounting support to practices and other value-added services such as advisory and business consulting support using suitable tech and app advice.

It equips accountants with the information and expertise they need to make smarter and more profitable decisions for their clients than if they only provided simple compliance accounting services. Outsourcing helps accountants flex, pivot, and plan nimbly.

Over to you

Thanks to outsourcing, UK accountants can hire employees and gain access to a larger talent pool, not restricted geographically. They can work more efficiently, run errands, deliver high-end services, drive more business, and generate more profits in the long run.

Outsourcing is not making accountants obsolete; it empowers them to tap into their full potential. As the UK’s leading accounting outsourcing company, we leave no stone unturned to deliver excellent services to our clients. We are 100% reliable and professional. Try us!

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