The Future of Outsourcing: How Changing Outsourcing Models are Impacting the Accounting Industry

Outsourcing is one of the most powerful and popular trends in the contemporary accounting industry. Although accountancy firms have been outsourcing for ages, the practice gained renewed prominence post 2020 owing to its numerous benefits, such as cost savings and capacity creation. In 2023, with the recession and subsequent inflation in motion, outsourcing will be crucial to the growth of the accounting industry.

Although outsourcing has been around for decades, the way accountancy firms outsource is changing dramatically. The current outsourcing practices are more tech-inclined and tailored to clients’ diverse requirements. With the industry going digital, outsourcing models are changing, too. In this blog, we will look at a few modern outsourcing models and how they impact and transform the accounting world.

Managed Solutions

Although outsourcing facilitates faster turnaround and greater efficiency, some firms, especially small accountancy practices with limited staff, find it difficult to manage their extended team. To curtail this challenge, top accounting outsourcing firms provide Managed outsourcing solutions.

As the name suggests, Managed Solutions, also called Managed FTE Solutions, lets accountancy firms hire full-time remote accountants from an offshore destination for their team. But what differentiates them from traditional outsourcing models is that the outsourcing provider completely manages these remote accountants or teams, removing the additional burden off the accountancy practice owner.

The Managed FTE model helps streamline the outsourcing process in the following manner:

• Dedicated manager/leader working exclusively on your project
• Better coordination with a single point of contact
• Faster turnaround times and enhanced efficiency
• Substantial time savings and greater success rate

With the Managed FTE model, accountancy practices can better organise their processes and focus the vital time that is otherwise lost on management on higher-value tasks.

Onshore Support

Another contemporary outsourcing model gaining prominence in the UK accounting industry is onshoring. Popularly referred to as the Onshore Support Solution, this model is crafted to tackle the challenges of offshore outsourcing.

Onshoring provides firms access to top talent from offshore destinations like India and bring them onshore to work from their location. For instance, if an accountancy practice chooses this model, they can hire highly experienced resources from India and bring them to work from their location in the UK. This way, practice owners can add skilled resources to their team while saving up to 50% of the in-house hiring costs.

Onshoring is an ideal solution for practice owners skeptical about outsourcing owing to plausible communication gaps and data security threats. Some of the onshore accounting benefits for businesses are:

• Improved coordination and better control
• Dedicated manager/leader as a single point of contact
• Comprehensive on-ground client support
• Reduced data security risks
• Complete admin support for increased efficiency

With onshore staffing for accounting, practice owners can add new services to their portfolio, attract new clients, and provide a competitive edge to their firm. The onshoring model allows firms to hire accountants, bookkeepers, auditors, as well as tax professionals to work from the UK.

Practice Outsourcing

Practice Outsourcing is a modern end-to-end outsourcing solution blending the best of offshore and onshore outsourcing models. It is a comprehensive partnership solution that delivers the most effective accounting outsourcing solutions, facilitating quick scalability and all-round success for a firm.

The Practice Outsourcing solution enables accountancy practices to hire onshore accountants as well as remote team members from top offshore outsourcing destinations like India. The onshore staff serves as the POC between your firm and the offshore team. The onshore staff provides complete on-ground support to your clients and serves as an advisor to your firm, while the offshore team handles the core tasks so your in-house staff can focus on other important services. This model ensures the highest efficiency in outsourcing while facilitating huge cost savings.

Some of the benefits of this outsourcing model are:

• Perfect balance of client service and technical support
• Dedicated support during busy periods and short-term cover
• Advisory support on intricate accounting matters
• Substantial savings of up to 50% on actual hiring costs

The Practice Outsourcing Solution is modelled to drive complete transformation to help accountancy firms thrive in the competitive accounting industry. It not only helps create capacity for your firm but also facilitates success by making your practice future-ready.

Other Outsourcing Models

Different outsourcing firms provide diverse engagement models based on clients’ evolving needs. Apart from the popular models mentioned above, accountancy practices seek outsourcing solutions for technological growth, business development, client relationship management, and more. Outcome-based contracting, the practice of outsourcing to achieve specific goals, too, is rapidly gaining prominence in the accounting world.

With diverse solutions available in the market, it may be difficult to ascertain the right outsourcing model for your practice. Should you go for an onshore accounting solution or settle for offshore staff? To determine the answer, accountants must first assess their firm’s capabilities and needs. If you are still unsure about which model will serve you best, speak to your colleagues and peers or schedule an appointment with an outsourcing expert.

How is this Impacting Modern Accountancy Firms?

The world of accounting is rapidly transforming. Digitalisation, the global pandemic, rising competition, and the ongoing recession have significantly impacted how accountancy firms function. Outsourcing, therefore, has become a necessity over an option for growing practices.

Traditional outsourcing models were designed to accelerate cost savings for accountancy firms. Modern solutions, on the other hand, are crafted to battle contemporary challenges, such as capacity creation, quicker growth and scalability, and practice transformation. These models aim to position modern accountancy practices as market leaders and business advisors, thus assuring greater success and prosperity.

Be it onshore accounting services or the typical offshore outsourcing solutions, contemporary engagement models help streamline the outsourcing process. Accountants and practice owners can do away with time-intensive tasks such as team coordination, management, and reporting and shift focus to higher-value services. Outsourcing with one of the top service providers also guarantees the highest level of data security, efficiency, and 100% productivity.

Curious to learn more about outsourcing models and how they can help transform your practice? Book a free consultation with our outsourcing expert today and get all your questions answered. To learn more about our services and diverse engagement models, call us at +44 208-146-0808, drop an email at [email protected], or log on to Outsourced Accounting, Bookkeeping, and Payroll Services | QXAS UK.