How to Outsource Bookkeeping Services in 2023

In the current competitive world, bookkeeping outsourcing is a rising trend among growth-focused accountancy firms. As small and mid-sized firms struggle to reduce operational costs to earn more profits, many have been opting to outsource bookkeeping services.

Bookkeeping is a core function of accounting that cannot be avoided. It is a critical but cumbersome task that often takes up a lot of accountants’ time. Topped with the increasing staffing shortages in the industry, it has become imperative for accounting firms to innovate a solution to deal with their scalability troubles.

Bookkeeping outsourcing provides an edge to accountancy practices to create capacity and facilitate growth. Top bookkeeping outsourcing firms specialise in customised talent solutions and give accountants exclusive access to skilled offshore bookkeepers. These bookkeepers are trained extensively to work as an extension of your team and manage your end-to-end bookkeeping efficiently.

Outsourced bookkeeping in the UK is a rapidly rising trend in 2022. It is a significant decision and requires a great deal of planning and perseverance. It is essential to approach it with the right mindset and strategy to get the most out of it.

Before we explore the steps to outsource bookkeeping in the UK, let’s understand why it is important.

Why outsource your bookkeeping?

There are several reasons to outsource bookkeeping services in today’s digital age. Some of them are as follows:

To eliminate capacity challenges within your practice
To adopt the latest software and cutting-edge technologies
To cut operational costs and increase profits
To reduce manual errors in bookkeeping and improve efficiency

How can an outsourced bookkeeping service help?

Expertise: Outsourcing gives you access to qualified and highly experienced bookkeepers who can be hired easily in record time.
Technology: With outsourcing, you can integrate the latest bookkeeping software into your processes along with groundbreaking technologies such as AI and automation.
Cost savings: Outsourced bookkeeping enables practices to hire skilled resources at reasonable prices and cut operational costs, thus facilitating savings and profits.
Data security: Top outsourcing companies promise 100% data safety by complying with GDPR and other essential security standards.
Efficiency: Outsourcing facilitates greater efficiency and productivity by eliminating the errors in bookkeeping.

Steps to Outsource Bookkeeping Services in the UK

Here’s a step-by-step guide for accountants and accountancy practices to outsource bookkeeping services.

Steps to outsource bookkeeping services

Step 1: Gauge the scope of outsourcing for your practice

Every business decision needs thorough planning, research, and capacity evaluation. Before you decide to outsource your bookkeeping, are you sure your firm is ready to outsource?

Different firms have different needs and capabilities. Staffing and scalability challenges are native to the accounting industry. Your firm may be struggling to recruit and retain skilled bookkeepers and maintain consistency in its tasks. But whether your firm is ready to outsource yet is a question accountants must ask themselves.

Outsourced bookkeeping is ideal for firms with a growth mindset and quick scalability goals. Many accounting practices struggle to deal with the peak season workload or aim to add new services to their portfolio. Some practices also look to acquire new clients to ensure a steady cash flow. This is where outsourcing can be crucial.

If your in-house team has been facing issues managing your existing workload or you are looking to widen your firm’s scope, outsourcing your bookkeeping can be an ideal solution. Evaluate your team’s capacity and forthcoming workload to make the right decision.

Not sure what and how much you should outsource?

GET HELP FROM AN EXPERT

Step 2: Perform an interim process audit

Although the fundamental processes of bookkeeping and accounting largely remain the same across the industry, how different firms approach it may differ. Therefore, an interim process audit is crucial before firms outsource bookkeeping services.

Your firm’s existing processes and infrastructure and your team’s ability to manage workload critically affect your outsourcing decision. Assess how your team goes about tasks and gauge their approach. Determine the pain points that significantly affect their productivity and whether outsourcing can help resolve the issues. Additionally, evaluate your firm’s technological requirements and preparedness.

If your firm has been striving to keep up with the advancing technology or overspending on infrastructure, it may be the right time for you to outsource.

Step 3: Research the best outsourcing providers in the industry

Once you have decided to outsource bookkeeping services, it is time to choose the right outsourcing provider for your firm.

There is a pool of outsourced bookkeeping providers in the market. Each of these firms claim to have the best resources and solutions to help accounting practices scale effortlessly. But how do you ascertain the right provider for your practice? The answer is- through research.

Research is critical to the process of choosing an outsourcing provider. To begin with, consider multiple outsourced bookkeeping providers. The easiest way to find potential outsourcing partners is to look into your inbox or do a quick search on the internet. You may also speak to your colleagues and peers for recommendations or meet outsourcing firms at conferences and events.

Make a list of the top 5 providers based on their industry experience, awards and accreditations, technological expertise, and compliance and data security measures. Review each of the specifications thoroughly and compare them to determine the ideal potential outsourcing partner for your firm.

Also read: QX’s 10 Point Checklist For Choosing an Outsourcing Partner

Step 4: Conduct interviews and background checks

Research is a critical aspect of the outsourcing process, but it alone is insufficient. Accountants must supplement it with detailed interviews with the outsourcing provider and subsequent background checks to ascertain a firm’s credibility.

An easy way to gather information about an outsourced bookkeeping services provider is to conduct one-on-one interviews with them. Meet their representatives and speak to them about their services. Ask them about their expertise and industry experience, clients they have worked with, technological proficiency, communication strategy, and data security measures such as GDPR compliance.

Also, ask your potential outsourcing partners if they can share references, which can be crucial for adequate background checks. While some companies may help you in this area, most outsourcing firms may not readily divulge this information as they have signed NDAs with their clients.

Once you have finalised an outsourcing partner for your firm, it is time to conduct a thorough background check. Look up the outsourced bookkeeping provider on social media and follow them. Read their client testimonials and evaluate their authenticity.

A thorough background check can give accountants a practical insight into a firm’s experience and credibility.

Step 5: Finalise the budget and terms of contract

The next step in the process is to determine the budget of outsourced bookkeeping services with your provider and finalise the terms of contract. This is a crucial step as the contract specifies both the firms’ roles and responsibilities and the amount of control each can levy.

Ask your outsourcing provider for the final price of their services and double-check the inclusions and exclusions. Get it in writing to avoid any confusion at a later stage.

Next, finalise the terms of the association and mutually sign the contract. Keep this document handy for a healthy and fruitful outsourced bookkeeping association.

GET THE BEST OUTSOURCING DEAL

Step 6: Prepare to onboard your offshore team

By now, most of the hard part is over. You have successfully passed on your additional and cumbersome bookkeeping responsibilities to offshore experts who will be taking care of it. It is time now to prepare to onboard your offshore team.

Outsourced resources work out of a delivery centre and are managed by the outsourcing company. Therefore, communication with outsourced resources is key to keeping them informed and motivated. Onboard your offshore team with enthusiasm and introduce them to your internal team. Give them an insight into your work culture, existing and upcoming projects, clients and processes, and infrastructure.

At times, practices struggle to get their in-house team on board with the idea of outsourced bookkeeping services. This is primarily because several accountants harbour misconceptions about outsourcing and believe it can cost them their job. In such a scenario, speak to your internal team and enlighten them about the benefits of outsourcing. Train them to welcome, coordinate and co-exist with your offshore team.

Lastly, ensure you give regular feedback to your offshore resources. This will help them understand your requirements better and tailor their services to best suit your needs.

Must Read: An Accountant’s Guide to Outsourced Bookkeeping Services

Outsource bookkeeping services like a pro with QXAS

QXAS is a leading outsourced bookkeeping provider in the UK with a proven experience of 12+ years in end-to-end accounting. We provide customised staffing solutions and dedicated engagement models to make your bookkeeping process profitable and hassle-free.

To know more about our services, call +44 208 146 0808, drop us an email at [email protected], or log on to Outsourced Accounting, Bookkeeping, and Payroll Services | QXAS UK.

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We hope you enjoyed reading this blog. If you want our team to help you resolve talent gaps, reduce costs and transform your business operations, just book a call.

Pooja Kshirsagar

With a rich experience of curating content for various industries, Pooja believes in the power of words in marketing and building brands. She enjoys experimenting with different forms of content and is currently on a mission to add value to the accounting industry through her detailed and researched write-ups.

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Originally published May 27, 2022 11:05:32, updated Jun 19 2023

Topics: Accounting Outsourcing, bookkeeping, outsourced bookkeeping services, Outsourcing