Outsourcing: ditch the donkey work

The global spend on outsourcing is on track to break records in 2008; its popularity fuelled by the uncertainty of current business conditions. Accountants have been slow to take to outsourcing with many seeing it as a cost cutting exercise that is just not compatible with that of professional service delivery. But to view it in this way misses a valuable point.

Outsourcing is not just about cutting costs in the practice environment: it provides far more tangible benefits allowing practices to achieve growth and increase competitiveness without taking risks.

For any practice looking to grow during the economic downturn, it is faced with a stark choice. It can either to go for the risky and expensive option of employing new staff, which in itself can be a mine field, or outsource a percentage of its compliance work to a provider that can be held accountable.

As with any service, you get what you pay for and the decision should be based as much on the service levels and quality, as much as the hourly rate.

Unlike in other industry sectors, jobs will not be lost through outsourcing. With fewer joining the profession, it is becoming harder and harder to recruit and a smaller pool of candidates has led to an increase in salary expectations.

This has a severe knock-on effect with senior staff forced to undertake lower value bread-and-butter compliance work. This is a missed opportunity, as the challenge and interest of stimulating, higher value work is one of the major factors in the motivation and retention of key staff and there simply isn’t the time to do this.

In this environment, client retention becomes an issue. Firms are operating in an increasingly competitive environment and time needs to be freed up to allow senior staff and managers to work with clients, adding value and improving service levels.

Although cost cutting is clearly near the top of the priority list due to the current difficulties, it should not be the primary driver for outsourcing compliance work.

Outsourcing is a safe option for those working in the profession because of its inherent flexibility and because it offers the opportunity to ‘pick and choose’ when and where they outsource the production of accounts, bookkeeping, VAT returns and tax work.

Robert Salvoni is managing director of Iris Accountancy Practice Solutions