Recently, The Woodard Report shared an excellent report on how to survive the accountancy talent crisis. It suggested networking, reaching out to accountants, and virtualizing your firm.
While every modern firm should do these things, they take time and resources.
Below, we discuss an alternative solution: handing basic accountancy tasks to a third party to preserve your in-house staff for more profitable client work.
We say ‘preserve’ as incumbent accountancy teams are becoming burnt out by covering staff shortages.
Moreover, using an overseas team to outsource tasks, such as bookkeeping, payroll and annual report preparation, can save you up to 50% in costs.
The problem with the ‘O’ word
What springs to mind when you think of outsourcing? That it is only for large corporations? Or maybe you have concerns about quality, control, and communication?
Outsourcing carries a stigma traced to the early 2000s when large companies began to transfer their customer services to overseas call centers. Many did not adequately address language barriers or train their workers beyond following a script.
A lot has changed since then, as communication and cloud technology have globalized business. As the world got smaller, overseas outsourcing providers recognized they must compete on quality and standard of service, as well as cost.
Today, 52% of businesses worldwide outsource business functions, rising to 76% for IT.
What are the benefits of outsourcing for accountants?
Outsourcing provides an extension of your team without the cost and hassle of organizing vacation, sick leave, or benefits.
More importantly, it frees your existing staff to focus on more profitable value-added client work, such as business advisory and tax strategy.
The third benefit is, unfortunately, more of a need: it gives accountancy firms hands on deck at a time when their clients need them more than ever:
- US-listed companies have cited a lack of skilled accountant personnel for weaknesses in their financial reporting controls.
- The average number of days companies take to fill open accounting and audit positions has grown from 23 in 2008 to 56 in 2022.
- Staffing shortages are driving up accountancy wages at a time when rising business costs are hitting firms.
What to look for in an accountancy outsourcing partner
As well as fees, accountancy firms should consider testimonials and service level agreements (SLAs) with well-defined deliverables.
Outsourcing should transfer your basic tasks to a team of specialists with the time and training to keep abreast of developments in accountancy, tax law, and technology trends.
Overseas teams should ideally hold accountancy qualifications from their home country and operate according to professional conduct codes in their client country, such as that of AICPA (American Institute of Certified Public Accountants).
Availability and turnaround time
Overseas outsourcing companies have the resources to assign work to a team rather than one person. For the client, this provides continuity of work. In contrast to an in-house team, there is no threat of downtime due to illness, annual leave, and staff vacancies.
A reputable outsourcing company will have checks and balances to protect a client’s data and intellectual property. These should include practices on data storage, such as advanced encryption, hosting servers in the US, and compliance with state data laws.
There is a worry that an overseas team will not be available within US business hours. How do you get urgent answers if everyone has shut up shop?
Cloud computing has made this less of a problem than 20 years ago. Good outsourcing firms should be trained on major UK accountancy packages and slot straight in as virtual team members.
They should also have collaboration software that gives all parties real-time access to their data and progress.
More importantly, a good overseas outsourcing company should provide clients with a US-based contact to answer queries within US working hours.
A problem that shows no signs of abating
Unfortunately, the accountancy talent crisis shows no signs of abating. The number of US students who completed accounting masters degrees fell by 8.4% in the 2019 to 2020 academic year compared with the prior year, according to the American Institute of Certified Public Accountants.
As the wider industry works hard to fill the pipeline, outsourcing frees US accountants from quotidien tasks, making it a more attractive career choice.
In the meantime, it can be a quick and cost-effective way for small to medium US accountancy firms to shift focus from recruitment worries back to their clients.