It can be incredibly difficult to generate sustainable growth in the UK accountancy space – and one of the key roadblocks practices have been facing over the last decade revolves around a shortage of talent.
According to the Association of Chartered Certified Accountants, 90% of employers in the financial services sector are struggling to cope with staff vacancies and recruitment woes. Unfortunately, demand for professional accounting services has grown dramatically in recent years thanks to increasingly complicated market conditions and regulatory uncertainty.
The simple truth is that accountancy firms simply cannot keep pace with this demand – making it nigh impossible to grow and expand services. That is precisely why Middlesex-based practice DNS Accountants decided to pursue outsourcing as a potential avenue to solve a tricky recruitment equation.
Prior to outsourcing, turnaround time on queries and accounts was slow and costs were rising higher than revenues.
By entrusting a range of key back-office operations and tasks to global accounting and bookkeeping specialist Outbooks, the team at DNS was free to focus its time on business development and improving customer experience through enhanced relationship building – initiating a 40% reduction in incremental costs and facilitating a 10-fold spike in growth.
According to Amit Agarwal, the UK-based managing director of Outbooks, these types of success stories are increasingly common in the accountancy space. And above all else, they derive from the fact that UK practices are now facing immense pressures to deliver more for less.
“When we live in times like these where we grow and then significantly contract due to recession, any cost lever which gives us the flexibility to move up and down at scale is a competitive advantage – not just to accountants, but to any firm,” he explains.
“Any business that can move more costs into the direct bucket and from the fixed bucket to the variable bucket is going to experience a competitive advantage. Outsourcing gives companies that flexibility.”
In the case of Outbooks, that ability to offer cost savings at scale takes a variety of forms including bookkeeping, secretarial services, payroll services, management account services, VAT and Corporation Tax returns, year-end accounts, and everything in between.
Although Outbooks is headquartered in the UK, its access to expertise is global – with more than 450 professionals working alongside clients in London, Australia and India. Faced with the prospect of being priced out of an increasingly small talent pool of both front and back-of-office staff, this access to global talent can save UK-based practices dramatically.
Staffing costs in the accountancy space can be up to three times lower overseas, inherently saving UK practices substantially. But outsourcing also increases efficiency and enables accountancy professionals to focus more on core competencies and building relationships – which is difficult to put a price on.
“Operations that are client-facing — which is the advisory bit which allows accountants to have the relationship which allows them to network and to actually sell — is hard to outsource. You don’t want to outsource your relationships because that is what keeps the business alive,” explains Agarwal.
“Anything else that can be done on the back end like bookkeeping, producing accounts, and doing payroll is where breaking the value chain comes into the picture. Outsourcing is great for accountants because not only are they going to get this done in a more cost-effective way, but they are still keeping the relationship and have more time to advise clients.”
East Sussex-based firm Ozlop took full advantage of this when they outsourced the whole of their back office to Outbooks. The firm, whose in-house team wanted to focus on client relationship management, advisory and networking, was able to reach 100 clients in less than 4 years as a result.
Given Ozlop’s shift in focus away from back-office work, they have been able to concentrate on growing the business. They have created standardised processes and worked with their clients to adhere to them.
Given the current economic climate in the UK and further afield, accountancy firms need to leverage these types of efficiencies to remain competitive and sustain growth. At present, access to the right talent for the right price simply isn’t there, and it puts a huge strain on professionals trying to meet demand and give clients the facetime they need.
That’s how outsourcing makes accountancy firms more competitive – and according to Outbooks’ Amit Agarwal, it’s also why the sector is finally embracing outsourcing as a key driver for success.
“Accountancy in fact was very late to the party in terms of outsourcing. If you look at other areas like IT and customer service, they started outsourcing in the early 2000s,” he says.
But thanks to an increase in success stories, there are now several recruitment organisations and outsourcing partnerships that provide services to accountancy firms. Although this increase in supply creates w wider range of selection, practice owners need to tread carefully in selecting a partner they can trust with the essential operations that help them maintain quality.
“Choosing an outsourcing firm is critical these days. But I think having a presence here in the UK is important. If you start working with any company which is just based out of any offshore location, it doesn’t give you the assurance and doesn’t tell you anything that the data and relationships are safe,” he says.
“Capacity is another key for any accountant looking to outsource. Anybody with growth prospects and with a reasonable size should ask: ‘Who can actually replace the staff as and when required? Who can actually provide this staff at short notice?’”
Above all else, it is this emphasis on trust and quality that enables collaborative relationships between UK accountancy practices and outsourcing specialists to thrive. The market is more competitive than ever before – and if partners truly want to create cost savings and deliver for clients, outsourcing offers a dynamic opportunity to harness that potential and move forward.