Considering Outsourcing Accounting Services? Here Are 3 Terms You Must Know!

Do you run a progressive accounting firm in the UK seeking additional capacity to scale to the next level? Are you an accountant looking to optimise your firm’s operations and stay ahead of the competition?

If yes, you’ve probably heard of outsourcing as a strategic solution. Modern accounting firms widely use accounting outsourcing services to end their talent woes, scale effectively, and maximise profits. When used alongside the latest technology, outsourcing can effectively help streamline your operations and prepare your firm for the future.

But within the realm of outsourcing, there are three key terms that every accountant should be familiar with: Onshoring, Offshoring, and Hybrid Outsourcing. In this blog, we’ll demystify these terms and explore how they can benefit your accountancy practice.

1. Onshoring (Onshore Staffing for Accounting Firms)

Let’s start with a concept that’s gaining tremendous traction among UK accounting firms – Onshoring. This term essentially means hiring talent from an offshore destination like India to work onshore from your office location in the UK. It’s a response to the challenges posed by the global talent shortage and the need for closer collaboration.

Why Onshoring Matters:

• Talent Pool: The skills shortage in the UK is no alien. Onshoring allows you to tap into a vast talent pool in offshore destinations and get the resources to work onshore from your office in the UK.
• Local Expertise: Onshore resources possess an in-depth understanding of the UK’s unique tax laws, regulations, and business practices.
• Enhanced Communication: With your team in the same time zone, communication is seamless, leading to fewer misunderstandings and quicker responses. This is a crucial aspect of outsourcing accounting.
• Data Security and Compliance: Onshoring helps maintain control over sensitive financial data, reducing risks associated with data privacy and security.

2. Offshoring (Remote Staffing for Accounting Firms)

On the other end of the spectrum, we have Offshoring, which involves outsourcing tasks to individuals or teams in different countries, often to take advantage of lower labour costs. This model has been widely used in the accounting industry for years.

Why Offshoring Matters:

• Global Talent Pool: Access to a global talent pool means you can find specialised skills that might be in short supply locally.
• Cost Efficiency: Offshoring can significantly reduce labour costs while maintaining quality work. These cost savings can be crucial, especially for small to medium-sized accounting firms.
• Scalability: It provides the flexibility to scale up or down quickly based on your firm’s workload, allowing for efficient resource allocation.

3. Hybrid Onshore and Offshore Outsourcing

In recent times, a hybrid approach has emerged as a strategic solution for accounting firms. This model combines the strengths of both Onshoring and Offshoring to create a customised solution that meets your firm’s specific needs. If you are planning to outsource accounting to maximise your productivity and ROI, this approach can be the best fit.

Why Hybrid Outsourcing Matters:

• Flexibility: A hybrid model allows you to access top talent while ensuring cost-efficiency. You can onshore part of your team with client-facing roles and have the rest of the team work from an offshore delivery centre.
• Round-the-Clock Productivity: With teams in different time zones, you can achieve 24/7 productivity. Tasks can be handed off seamlessly between onshore and offshore teams.
• Risk Mitigation: By not putting all your eggs in one basket, you mitigate the risks associated with over-reliance on a single staffing model.

FIND THE RIGHT MODEL FOR YOUR FIRM

Making the Right Choice

Now that you understand the three key terms related to accounting outsourcing services, the question is, which one is right for your firm? The answer largely depends on your unique circumstances, including the size of your firm, the specific services you offer, and your budget.

Considerations for Your Decision:

• Scope of Services: Identify which tasks can be outsourced without compromising quality. For example, routine data entry may be a prime candidate for Offshoring, while client meetings and strategic planning could qualify for Onshoring.
• Budget: Assess your budget constraints and how outsourcing aligns with your financial goals.
• Data Sensitivity: If your work involves highly sensitive client data, Onshoring might be the safer bet due to better control over data security.
• Scalability: Think about your firm’s growth potential. A Hybrid model offers scalability while balancing cost considerations.

In conclusion, the world of accounting is evolving, and so are the strategies to meet its demands. Whether you opt for Onshoring, Offshoring, or a Hybrid approach, the key is to stay adaptable and make informed decisions that align with your firm’s goals. Outsourcing accounting, in its various forms, can be a powerful tool to help your accountancy practice thrive in the competitive landscape of the UK financial industry.

Frequently Asked Questions

What Should You Consider When Outsourcing Accounting?

When considering outsourcing accounting, it’s essential to weigh several factors. Firstly, consider the scope of services you intend to outsource – which tasks can be delegated without compromising quality. Secondly, assess your budget and how outsourcing aligns with your financial goals. Next, evaluate your data security requirements and factor in scalability to decide the right outsourcing model for your firm.

What Do You Understand by the Terms of Outsourcing?

Outsourcing, as explained in the blog, refers to the strategic practice of delegating specific tasks or functions to external individuals or teams. In the context of accounting, it encompasses three key terms: Onshoring (hiring offshore talent to work onshore in the UK), Offshoring (outsourcing tasks to individuals or teams in different countries), and Hybrid Outsourcing (a blend of Onshoring and Offshoring).

These terms represent various approaches that accounting firms can adopt to optimise their operations and adapt to the ever-changing demands of the accounting industry.

Accounting Outsourcing Support with QXAS

If you need strategic outsourcing support for your firm, QXAS can be your go-to partner. A market leader in outsourcing, we provide diverse models tailored to accounting firms’ needs. To find the right model for your firm, talk to our experts today. Call us at +44 208 146 0808 or drop us an email at [email protected] to get the conversation started.