Guide to Outsourcing Accounting Work (Part 1 of 4)
Most people’s first impression of outsourcing is that it’s all about reduction – reduction in office space, equipment, on-site personnel, hiring costs, and so on. While outsourcing can indeed save you a fantastic amount of overhead, its core value isn’t in reduction, it’s in expansion. Outsourcing is a powerful tool to help your firm grow.
How your firm grows is a result of the type of outsourcing provider you choose to work with. Let’s take a look at some of the core considerations you should make when choosing a provider and how they can affect your firm’s growth.
In this model the provider is helping you recruit offshore staff and provides the staff with an office to work in and all basic IT. Some providers using this model will also give your virtual team some basic induction training for core Australian or New Zealand issues with a few training sessions. Some providers will also include basic HR support and staff management.
Beyond that, it will be up to you to do the majority of the compliance and software training. Your overseas workers will be completely reliant on you providing them with procedures and working papers.
All of the training can drain many hours from your workweek, especially if you have to go overseas to get your staff up and running to the level of quality expected by your clients. Training an offshore team is no mean feat. It is worth noting some large Australian practices have run their own offshore team for years only to come to the conclusion that there is actually no cost-benefit when they factor in all the lost time senior Australian staff have had to spend on training, fixing up errors etc., and subsequently those firms have switched to using a premium full-service provider.
Full-service permanent dedicated staff
In this model your outsourced accountants essentially work just like they were another member of your permanent staff, they just happen to be overseas.
You’re able to decide if you want a full-time or part-time accountant or bookkeeper. You can choose if they work for you anywhere from 1 to 5 days per week. They can do your compliance work utilising the exact same methods as your in-house staff. They can use your accounting software, your preferred document management system, and they become familiar with your clients and their particular needs.
With a premium full-service provider you should only have to manage workflow. You can use your in-house procedures or have the provider use their own.
Most full-service providers’ staff will be trained thoroughly on the necessary tax laws but this is one of the key things you should put under the microscope to determine the level of support you are getting from your provider.
This method provides the opportunity to reduce review times, increase efficiency, and increase your menu of services. Your overseas team can even attend staff meetings via services like Skype, and are able to take on more complex work above and beyond your basic compliance needs.
A high-end full-service provider should leave you with a great deal more time so you can focus on growing your firm and face-time with clients.
Full-service casual staff for ad-hoc jobs
You might not have enough have work to keep even a part-time accountant busy in which case a casual option may suit you.
With this model you’ll again only have to manage your workflow, the staff will already be trained and experienced in the kind of work you want to have done.
The benefit of this kind of staffing option is that you can send ad-hoc jobs at any time e.g. when you are overloaded. You may also have only a few SMSF jobs and don’t want to put the resources into keeping a staff member abreast of all the compliance regulations so would rather outsource that accounting work to a specialist. Using a provider for SMSFs can be particularly good if you are concerned about staff turnover and losing all the knowledge invested in a staff member.
The down-side is that generally speaking providers will want to use their own procedures and papers because there won’t be time to get them up to speed on your firm’s in-house procedures.
Some will have different pricing structures ranging from fixed-fee hourly rates to value-based project pricing.
In our next email we’ll take a look at the benefits of proper outsourcing and the training that top tier providers provide your overseas workers.