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
Accountancy Practice Solutions

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