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The outlook for outsourcing

Aug 22, 2018
Arun Ravindranathan, Chartered Accountant and Director of Global Infosys, assesses the outsourcing landscape for accounting firms.

Since 2008, outsourcing became more accessible and was requested by firms in Ireland. This is when Global Infosys started working with a top 20 Irish firm.

The working relationship was meant to release some of the staff pressures from their backlog. At the time of recession, demand for outsourcing went down significantly as employees were easier to find. Within the past year, however, we have seen a spike in interest in accounts outsourcing again as quality employees are proving difficult and expensive to find.

Although outsourcing may seem like an easy step, firms take time to build trust with outsourcers as they fear the loss of control and believe there is a lack of knowledge. Once firms start building their experience with outsourcing, they gain more confidence to then start treating outsourcers as an integral part of their team. Once this business frame is achieved, firms see drastic results. Building the best relationship comes down to trust and finding the right outsourcing partner.

Finding the right outsourcing partner

The right outsourcing partner should have a track record and have been in business for a while. Many outsourcers come and go; they fail to understand clients’ ethos and try to sell purely on cost – but this model doesn’t always work with accountants.

Speaking as a Chartered Accountant, I hate it when I have to re-work on an outsourced job. It’s a waste of time and money, and we end up blaming the outsourcers for the failure. As they say, ‘once bitten, twice shy’, but what can you expect if firms choose to go for the cheaper option? When finding the right outsourcing partner, don’t just look at costs – look at how they fit your business model and how they can help your firm grow.

Re-focusing on the bigger picture

Outsourcing will pick up even more in an increasingly digital world, where more and more clients will need regular and efficient bookkeeping services and firms will need to get the job quickly out the door.

The current staffing challenges mean that firms need to look at other smart ways of processing accounting data. The logical solution is a combination of automation and outsourcing. Many accountants like to be in control, and some outsourcers can allow firms to employ their own team at a fixed price. By having a dedicated staff member working for them (based in the outsourcer’s offices), there’s no need to worry about recruitment, training or desk space. In my experience, such employees are also extremely proactive and competent.

The current skills shortage facing the accounting industry doesn’t appear to be a short-term issue. In the UK, we are seeing huge growth in enquiries from firms looking for dedicated staff to work at the outsourcer’s shared offices.

With the future of the accountancy industry changing drastically, there’s a niche for outsourcing. With more accounting firms struggling with resources and at risk of losing their focus on the bigger picture, firms need to acknowledge that outsourcing isn’t just a cost saving tactic. Rather, it is a means of getting work done effectively and allowing both business leaders and their teams to re-focus on the bigger picture and the growth of the business.

Arun Ravindranathan is a Chartered Accountant and Director of Global Infosys.