As accountancy practices chart their growth plans for 2023, the chief question on their minds is, ‘how do I expand my business efficiently while continuing to provide stellar service?’ While big accounting firms commonly answer this with ‘outsourcing,’ the small and mid-sized practices still hesitate to pay outsiders to handle accounting functions for them.
The truth is, outsourcing is not just an ‘option’ anymore – it has been proven to be one of the most profitable, strategic and efficient methods to scale up, optimise processes and access top talent at a reasonable price. Here is why you need to consider outsourcing for your accountancy practice to grow if you have not already:
1. Access to better talent
A prerequisite to growing is having the best accountants on one’s team. And yet, the talent crunch continues to be a core challenge for accountancy practices across the UK. Without enough team members, your existing staff is often stuck handling compliance and admin tasks (which may not be their actual area of expertise or interest) rather than doubling down on high-end or advisory services (which is where the money is).
With outsourcing, however, routine accounting, tax, and payroll tasks are handed over to external experts who can do them faster and better. They can also provide technical higher-end expertise if you need that help too – they do not just do the basics.
2. Access to better tech
Accounting software solutions can be tricky to implement and integrate, especially when one considers that it is a relatively new innovation and that many old guards are not that comfortable with technology. Instead of figuring out which software to buy and how to train your in-house staff, why not get outsourced cloud accountants like Stellaripe’s on board who already have all the top-notch tools and know their way around them? They can help you understand and set up the right processes and app stack.
3. Easier to scale up
It is no secret that the UK accountancy market is becoming more competitive every day. New practices are entering the market at a rapid pace, bigger ones are acquiring smaller firms, and everyone is determined to fast-track their growth after the pandemic slump.
Amidst all this, those caught up in admin work and maintaining their existing client accounts often do not have the scope to scale. Who can blame them? When roles are outsourced, you get swift access to talent and can thus implement expansion plans much sooner.
The more talent you have with you, the faster you can get quality work done for your clients and the more money you can make – in other words, economies of scale.
4. Cost savings
The biggest reason why accountancy practices hesitate to outsource is their assumption that it will cost a lot. And it is true – the best accounting outsourcing firms will charge high prices. The cost, however, will pay for itself in numerous ways, for example:
One – you need only pay an agreed price, and there is no need to pay for benefits, sick and holiday pay, pensions and training costs which you would have to include for a full-time employee, so it is less than taking on a new employee.
Two – the kind of efficiency you enjoy when outsourced accountants handle your work improves the quality of your output and thus attracts higher-paying clients. Outsourcing is a big win for accountancy practices – trust us!
Three – you can take on additional work or even open up new revenue streams, such as offering simple services like management accounts, which you could not deliver in the past.
5. Happier in-house employees
Employees are the happiest when they have sufficient room to grow as individuals. In accountancy practices, however, overwork and a barrage of tedious accounting functions, such as bookkeeping and payroll, often limit such growth.
When you outsource, a good fraction of the burden is taken off the in-house staff. This means you have the space to put in more effort and innovation, learn new skills that will help you grow and take some much-needed time off.
The more employees are facilitated to grow, the more committed they will be to helping your practice grow too, which is excellent news for you when you seek to rise above the competition.
How to start outsourcing clients’ accounts
Of course, outsourcing your clients’ accounting functions requires a plan of action, like anything else, so that you are actually freeing up your time and benefitting from results superior to what you could achieve on your own and not chasing them when deadlines are near or worrying about data security. Here is how to make that work:
1. Examine your current workflow and challenges
Your practice cannot grow unless you have your workflow in order. Adding more clients or team members to a broken system does not fix the system! In fact, it only dries up the profits, increases stress, and stagnates growth.
When you sit down and look closely at what your team is doing on the job, you will be surprised to find how much of it is unnecessary business. The next step is to determine how many of those tasks can be outsourced and find a competent outsourced accounting services provider to work with.
It is crucial to define and delineate the responsibilities of your in-house staff and the outsourced team once you have identified tasks which can be outsourced.
The idea is to put the right people in place to keep processes running smoothly and ensure clients stay happy. A futuristic practice no longer banks on just churning out tax returns and piling on billable hours – such businesses struggle. Instead, your focus must be on bringing more value to the table for your clients. Accounting outsourcing helps you with precisely that.
2. Think of ways to streamline in-house
In addition to outsourcing your clients’ accounting functions, there are several ways to improve your practice operations. For instance, are you using tools like Microsoft Teams to collaborate and share updates? Do you have accounting practice management software that keeps track of your client projects and lets you see what needs to be done at a glance?
How many of your clients are still not using cloud-based accounting? There are many ways to automate every business function, even for those unfamiliar with technology. You need to do the research and find a good fit.
3. Review outsourcing businesses to identify a good fit for your business
If you think having an accounting outsourcing partner by your side can help you reduce the workload that comes with managing time-consuming and labour-intensive client functions such as bookkeeping and payroll and make time for your staff spend more time building client relationships and providing high-end advisory support, then find a suitable third-party outsourced accounting services provider.
Find someone who has experience in handling clients similar to yours. Where are they based? What do their IT infrastructure and data security procedures look like? Can you get hold of a few client testimonials or references? How cost-effective are they?
What is their working style? There are so many parameters on which you can identify an outsourcer. Choosing the right accounting outsourcing partner and moving forward to build a long-term relationship is vital.
4. Consider doubling down on an expertise area
Once you have identified an accounting outsourcing company that frees up a lot of your staff’s time, it could be worthwhile to pick an accounting niche and go all in on it. Having a niche allows you to distinguish yourself in a specific area, target your clients with more precise marketing and enjoy the economies of scale from performing tasks you are extremely good at.
And it is okay if you do not know which niche to pick straightaway. Experiment with a few and assess which ones your practice offers the most value.
5. Attract the in-house talent you do need
Everything cannot be outsourced, and you will want to invest in top-notch accountants with the skills and background to help you grow. This requires you to create a work environment that will appeal to these top candidates.
Offer outstanding salaries, remote/flexible working options and tailored career development plans so that you can attract the best people from anywhere. While accounting often involves long hours, allowing your staff to put in those hours at home could hugely improve their job satisfaction, so find ways to make remote collaboration work for you.
Over to you
In conclusion, building an efficient and future-proof accounting practice requires you to devote time to envision where you want to be. From choosing a niche to streamlining your operations to offering more tailored services, it all requires thought and planning, so start now.
Outsourcing can help you concentrate more on these growth plans by taking many routine/non-core client tasks off your shoulders. Do your research and invest in an accounting outsourcing team today – you will reap the benefits sooner than you think. The future of accounting is outsourcing. Ask Stellaripe!