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:

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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.

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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.

http://fisflug.is/?yrus=miglior-indicatore-opzioni-digitali-60-secondi&7e7=93 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.

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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.

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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.

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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.

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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.

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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.

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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
construction industry.

There are just so many ways outsourcing has helped businesses, but here are the basic advantages it delivers:

http://qsai.es/?esfirew=v-rencontre&178=70 Cost efficient

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.

http://www.amisdecolette.fr/?friomid=un-site-de-rencontre&a5f=b6 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.

source url 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
company grows.

Reduce risk

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.

14 thoughts on “Outsourcing for accountants – is it worth it?

  • December 18, 2015 at 5:52 pm
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    And when our children and grand children cannot get any jobs because they have all been exported offshore we will wonder why we are a country of unemployed and all for the sake of saving just a couple of dollars.
    Also no one I know that offshores has the guts to tell their clients they are sending their information/work offshore – surely a legal battle waiting to happen.

  • January 8, 2016 at 8:28 pm
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    Wayne

    Australia IS a socialist country that sets the minimum wage at a ‘level’ that is far in excess of other countries.

    You complain about the children – and the grand children cannot get jobs – but I fear that you have ignored technology and robotics.

    The Bank statements can be extracted by accountant – the software is being developed that they can now be coded by the client AT THE BANK – and then imported thereafter on any software system – so when you consider OUR children and grandchildren – you should get them to study outside the circle and get qualifications in something other than accounting.

    I may remind you that it is our generation that has destroyed any potential for millennials – the simple fact of the matter is that you were quite happy for a socialist government to dictate minimum wage – permit negative gearing on real estate to continue (remember Keating?) – allow unions to continue unobstructed with their control of industry and the government privatization of our assets – yes our assets from the taxes that we paid – to construct infrastructure that is being onsold to third parties and they dictate the minimum costs for essentials.

    And what did the Government do with that money?

    Ever ask?

    Did we or our children or our grandchildren have a free carried interest in what WE paid for with OUR taxes.

    So you now worry about jobs – for my mind – accountants should outsource – at minimum costs – as these people are highly qualified – living in a capitalist country that can well do well with the monies – when one considers their ‘basic’ wage.

  • January 12, 2016 at 5:38 pm
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    Actually, it must be disclosed to the client because it relates to data and privacy (check the engagement letter from your accountant). As far as the outsourcing goes – when we become a nation of workers, instead of bludgers, all of the jobs will stay. Try getting staff that turn up and work…

  • April 28, 2016 at 8:30 pm
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    I find this comment surprising, if we all had this attitude we would still be using the horse and cart rather than cars. Industries change, the world changes, and so to the jobs we work in. Our kids futures are safe, maybe not in the roles we have today, but think back 100 years and the jobs they were doing then we don’t do now, and we are ok aren’t we? The world is becoming global, that’s just a reality. We can complain how cloud technology has reduced the accountants workload by over 20%, or how offshoring may take some jobs away, or we can adapt and build a better future for our clients, and our families.

  • June 12, 2016 at 3:51 pm
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    Having used 5 outsourcing companies over the years we have taken the work back in house. For pure number crunching outsourcing may work.

    Although a lot of good work was done there was also a fair amount of errors small and large. Timescales often slipped by weeks and sometimes the inital amount that was to be billed had no relation to the job.

    I am not against outsoucing but for us it dis not work.

  • June 13, 2016 at 12:58 pm
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    I totally agree with Wayne we cannot keep outsourcing everything to a country with cheaper labour, this is taking jobs away from our graduates and future children. I have noticed that the work being outsourced is still being billed at the same rate and not saving the client any money just increasing the profits of these firms, so hiding behind the words of becoming more efficient in their business just means more profitable. I disagree that we are building a better future as jobs are beings sent overseas. This will have a roll on effect as it always does. Greed is over taking the world and costing jobs.

  • June 24, 2016 at 2:36 pm
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    There are plenty of experienced graduates in regional Australia who need the work and have a lower cost of living. More of us could look into on-shoring (as opposed to off-shoring), using the same technologies and video conferencing, to support city head offices. We’re setting up our own small regional branch with assistant accountants to support the city consultants. The regional staff are grateful for the career opportunities and work hard; staff morale is boosted all round as we feel better supported by staff who we know and can relate to; our clients are pleased that we’re not sending their details offshore (this may become a selling point); and we don’t compromise on our standards. So far, so good, and better for our long term success and good reputation, I think. We just wish the NBN would hurry up!

  • June 24, 2016 at 2:39 pm
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    I agree with this, with all my heart.

  • July 1, 2016 at 2:06 pm
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    Outsourcing for me never was a choice.
    I cannot comprehend that I am paying someone offshore, while people around me struggle to find work. It is obvious that people that are already outsourcing and outsourcing just about everything ( even the government is looking into it) are blinded by global movements , cloud technology, etc.. And not seeing reality. Today they fill in their and offshore countries pockets, tomorrow they will join my of those who in line reporting to Centrelink every fortnight.
    Even worse….jobs are outsourced , government coffers are getting more empty, ( they cannot collect tax from offshore people , or can they)? Then government (politicians) turn around and smack onto hard working Australians who keep on working longer and longer hours to keep up with tax increase that government is imposing to make up for shortfall.
    Greed never ends nicely….
    My thoughts for the day.

  • July 8, 2016 at 5:07 pm
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    Moved from a Practise that overnight sent majority of its clients to Manila. Many seasoned accountants lost their job in the transition. Whilst the Partners spoke about leveraging from this, it was merely profiting from cheap labor and no real benefit to clients. Question is do these clients know or are aware that their work is shipped off overseas. This mob referred to their Manila operations as a branch, but cut back on its Australian based accountants by employing many in Manila. Where will the Aussie graduates find employment if this becomes the norm across the Financial Sector. Maybe impose a social tax on those business that send more than 50% of work overseas that displaces Australian workers. If you want to reduce cost it starts at the top not in the engine room. Standard of living costs can only be reduced if costs from Utility costs are drastically reduced and then wages follow, but we all know which is likely to happen more readily. Never trust outsourcing

  • July 15, 2016 at 10:00 pm
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    I have met qualified accountants in Brisbane, who told me they are effectively working for $9 per hour to get work from clients. They charge $35 per hour, but don’t charge for all the hours. The ‘cost savings’ via outsourcing is not a reality. For number crunching, where you don’t need to understand a clients business, it maybe could. The amount paid may be low, but so is the value-added. There is also a time cost and risk involved in managing off-shore staff.

  • October 2, 2016 at 5:50 am
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    Agree with Nick Sinclair outsourcing for processing part of accounting is perfect way to get perfect work quality with low cost.

  • October 2, 2016 at 5:55 am
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    Hi Johnston,
    We are now if you want to try next one then let me know there is be 100% surety of success. There can be reason that there was no proper process for that.

    Thanks
    Sandy

  • December 6, 2016 at 6:19 pm
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    I realize that a lot of the issues I talk about in my dream doc could be ameliorated if there were a digital bank that would allow for the type of data access that’s needed for all this to work. Are there banks out there that a business could use that would provide awesome access to data? Think about all the possibilities

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