Outsourcing for accountants – is it worth it?
With technology slowly commoditising compliance, accountants are turning to outsourcing their non-core business processes to less expensive countries
We’ve seen the impact of digital disruption in almost every industry. It has affected traditional
business models and prompted organisations to change the way they operate. No industry can escape digital disruption – not even the accounting profession. With the development of SMAC (social, mobile, analytics, and cloud) technology and the influence of socio-cultural changes, accountants are now faced with the choice of adopting this innovation or dying a slow death.
In this year’s Harvey Nash CIO Survey, in association with KPMG, it was revealed that 56 per cent of Australians believe they are already being disrupted by digital, 21 per cent more than the global average; and 59 per cent are expected to increase outsourcing, 13 per cent more than the global average. This goes
to show that digital disruption is more than just a fad or a buzzword; it is the reality, and only those who can turn these threats into opportunities will be able to keep up. One way to do this is to capitalise on the
areas being disrupted in the accounting industry. For example, now that technology is slowly commoditising compliance, accountants are turning to outsourcing their non-core business processes to less expensive countries. It is important to know the various outsourcing options available in the market.
Some of the tasks your firm can delegate include:
Personal and business tax returns
Outsourcing tax preparation to accomplished tax professionals ensures compliance with regulations and security from unauthorised access for better managing workflow. It takes the edge o the tax season for accountants.
Many companies struggle to improve the fiscal closing process for the year-end. For faster invoicing, accurate documentation of supporting documents, audit trails, and detailed accrual reports, outsourcing your accounts payable is the way to go.
Cash receipt processing
Cash receipt is crucial because it has a direct benefit to your bottom line. You can now rely on trusted personnel to monitor and reconcile receivables and disbursements, and understand and manage the
transactions associated with the business’ cash-flow cycle.
Get a qualified and well-trained accountant who is proficient in major accounting software used in the industry. You can ensure accuracy, quick turnaround time and compliance to regulations.
New entity set-up
You can outsource virtually every function to a service provider in order to achieve a high quality of work at a lower cost. This is especially beneficial to start-up businesses looking to expand in the future.
Sales and accounts receivable
Let professionals handle your receivables to collect and process your payments faster. Using advanced electronic billing solutions and payment options, customers can pay you in a timely way, improving your overall cash flow. You can also outsource sales activities like lead generation/nurturing, product launches, and niche segments that help increase revenue and provide flexibility to your in-house team.
Outsource administrative tasks like research, presentations, managing e-mails, and schedule to an executive assistant or secretary so you can focus more on your company’s revenue-generating tasks.
A remarkable content, interactive social media, and search-optimised website – these are all important even for B2B companies like accounting firms. Since not all firms specialise in this area, outsourcing a team to take care of these is a cost-effective option.
Having a dedicated team of experienced engineers who are qualified in electrical, data, security, and other engineering services can help you work on a range of projects in the commercial and
There are just so many ways outsourcing has helped businesses, but here are the basic advantages it delivers:
Outsourcing reduces costs as it maintains a paperless workflow technology and eliminates mundane data entry and organisation. Also, the lower cost structure offshore is one of the factors that lure foreign countries to outsource their business processes.
Expertise on your side
When it comes to accounting and money management, it is more practical to hire professionals than trying to juggle everything all by yourself. With some direction and outline of the strategy, they can make it happen.
Access to the latest technology
Technology constantly evolves and unless your company is IT-related, it’s hard to keep up with it. Through outsourcing, businesses can use advanced tools and leverage the vendors’ access to improved technologies without investing in the time it takes to master them.
Focus on core business
By outsourcing non-revenue-generating tasks, you can now pursue opportunities that will directly impact your business’ growth and bottom line like advisory, nurturing, and sales; your local team will manage everything else.
Flexible and scalable
Outsourcing certain business operations lets you level the playing field and enjoy the same economies of scale and efficiency that large companies do. It also lets you adjust to the changes in the market as your
Outsourcing actually helps you reduce uncertainties because you share accountability with your outsourcing vendor since they already have mitigation strategies in place for certain risk considerations.
Now that you know the what and why of outsourcing, the next question is where. Those who talk about compliance risks in offshoring haven’t found the right outsourcing provider yet. In our case, we have tried outsourcing in India, Vietnam, and in Australia (and failed in all). The Philippines won for us, hands down. Here are few of the compelling reasons:
Good command of the English language
English is one of the official languages of the Philippines. They have a neutral to Westernised accent stemming from their exposure to the Western culture which makes them more compatible than other Asian markets.
Globally competitive labour force
With a literacy rate of 97.5 per cent and a business English index of 7.11, the Philippines is poised to become globally competitive. They value education because it is a requisite for landing a job. Basically, there is a strong accounting workforce and an even better number of accounting graduates coming out each year.
Similar time zone and geographical proximity
The time zone of the Philippines suits perfectly as it is only two hours behind for all eastern states of Australia and the same time zone for Perth, which makes it convenient for Filipino employees because their usual working hours will not be compromised. Its location is also an advantage since Australia is only 4,000 miles from the Philippines. It will take about eight hours to fly from Manila (Philippines’ capital city) to Canberra.
Most preferred outsourcing destination
Metro Manila remains second in Tholons’ Top 100 Outsourcing Destinations in 2015. Aside from Metro Manila, seven other Philippine cities made it to the list: Cebu City (8th), Davao City (69th), Santa Rosa, Laguna (82nd), Bacolod (86th), Iloilo (91st), Baguio (95th), and the newest entrant in the poll, Metro Clark (98th).
With digital disruption challenging the status quo in the accounting industry, firms should take action to minimise the risks and maximise the opportunities. Outsourcing helps you become a proactive, real-time accountant and helps you add value to your clients.
Nick Sinclair is the CEO of The Outsourced Accountant.