search
Every accounting firm in the UK is feeling the pinch. Escalating labour costs, widening skills gaps, relentless regulatory change, and clients who expect more value every year are stretching partners thin.
For many firm owners, partners and directors, the question is no longer “Should we outsource accounting processes?” but rather, “Can we afford not to?”
In this blog, we explore why cutting labour costs is driving UK firms toward outsourced accounting, how this works in practice, and what decision-makers should consider.
For many UK firms, the cost of recruiting and retaining qualified accountants and support staff has increased markedly. Further, the rise in Employer’s NIC from 13.8% to 15.0% in April 2025 has only led to an increase in costs for accounting firms.
In short: firms are paying more for labour and are still expected to maintain or improve client service, leading to shrinking margins and putting additional pressure on partners.
The nature of accounting work is evolving: more advisory, more regulatory reporting, more cloud-based systems, more data analytics. This means firms must either hire more senior expertise (at higher salary cost) or restructure how they deliver services.
When staff costs absorb a growing share of fee income, profitability is squeezed. At the same time, clients demand faster deliverables, real-time reporting, and deeper insights. For firm leadership, the imperative becomes: how to scale without simply hiring ever more staff.
Outsourcing accounting services isn’t purely a cost-cutting exercise. It’s also about creating capacity, flexibility and scalability.
A well-structured outsourced partner can take over functions such as bookkeeping, accounts preparation, payroll processing, audit support and management reporting. Once these are offloaded, your in-house people can spend time on client-facing work, growth strategy and advisory services.
Here are some compelling statistics:
Thus, for accounting firm principals, outsourcing offers a tangible lever to control labour cost growth while maintaining or enhancing service delivery.
One of the key advantages of outsourcing accounting is the ability to scale up (or down) more fluidly than with in-house recruitment. During busy season, you might need extra capacity for accounts and audits; during lean months you may not need full headcount. An outsourced model can absorb those fluctuations.
A survey showed mid-sized organisations are much more likely to outsource payroll functions than very small ones – 66% vs lower figures.
Outsourced providers typically invest in the latest technology, automation and process controls – things that may be expensive for a small-to-medium practice to build in-house. For example, one survey found 78% of UK businesses using outsourced payroll benefited from improved accuracy and efficiency due to advanced technology.
And outsourcing offshore in locations such as India or Philippines enables access to a trained labour pool at lower cost, which is explicitly cited as a primary reason for UK accounting firms to outsource bookkeeping services.
When you’re exploring accounting outsourcing, it’s critical to approach it strategically rather than purely tactically. Here are some questions to ask:
At QX Accounting Services (QXAS), we understand the unique pressures facing UK accounting firms: labour cost inflation, skills shortages, the need for scale and technological edge. QXAS positions itself as more than a body shop solutions provider; we aim to be an extension of your firm’s team and strategy, and a partner in growth in the true sense.
What QXAS offers
Why this matters for you
For firm owners and partners, engaging with QXAS means you can reduce the growth of your labour cost base, improve operational flexibility, and better position your firm for advisory and value-added services.
The hard truth: if you stay locked in to an in-house headcount model alone, rising salaries and overheads may eat your margin or force you to raise fees in a competitive market.
The market signals are clear: outsourcing finance and accounting services is no longer niche; it’s mainstream and growing. The Global F&A BPO spending is surging. For UK accounting firms, the logic is compelling.
A future-ready accounting firm will:
In short: the question for leadership becomes how you outsource thoughtfully, not whether. The better you structure it, the more you turn cost-control into growth-unlocking.
Q1: How much can a UK accounting firm realistically save by outsourcing?
A1: While results vary depending on complexity and volume, studies suggest cost reductions in the 30-50% range for finance & accounting tasks. Some UK-specific commentary suggests savings of up to 60% when factoring in salaries, overheads, training and software.
Q2: Will we lose control or quality if we outsource abroad?
A2: Not necessarily. Quality depends on provider selection, process design and oversight. Many firms use UK-trained accountants to manage offshore teams, maintain SLAs, and enforce data-security protocols. The key is to treat outsourcing like a strategic partner, not simply “cheap labour”.
Q3: What functions should we outsource first?
A3: Start with high-volume, repeatable tasks: bookkeeping for smaller clients, accounts prep, payroll admin, audit support (data-gathering, reconciliations). Keep your advisory, strategic-client work and deep compliance work in-house.
Q4: How do we choose the right outsourcing partner?
A4: Evaluate expertise in UK accounting standards, data security/compliance (GDPR, ISO), scalability, communication and integration with your team, clear pricing structure, and a transparent transition/onboarding plan.
Q5: Could outsourcing become a risk in terms of data security or regulatory exposure?
A5: Yes, it can become a risk if you outsource without proper controls. Ensure your chosen provider has rigorous data-protection measures, regular audits, cyber-security protocols and clarity on roles/responsibilities. This is especially important in accounting because of the sensitive nature of financial data and regulatory obligations.
Q6: How does outsourcing tie into future-proofing our firm for technology changes (automation, AI, cloud)?
A6: Outsourced accounting providers often invest in technology and processes that individual firms struggle to build internally. By partnering with them, you gain access to more advanced tools and can re-allocate in-house resources to advisory and client growth.
For UK accounting firms, the drive to cut labour costs is no longer simply about reducing spend; it’s about transforming the operating model. Outsourced accounting gives you a lever to manage the cost base, scale effectively, and free your senior-team brain-power for growth.
If you approach it strategically by choosing the right functions to outsource, selecting the right partner, preserving control and quality, you can use outsourcing not merely as a cost-measures tactic, but as a growth accelerator.
At a moment when margin pressure is real and talent harder to lock down, the smart firms will ensure they’re not just surviving but building a leaner, smarter and more sustainable practice for the decade ahead.
Deepika is a seasoned accounting professional with over 13 years of experience spanning the Indian, US, and UK markets. Her expertise covers audit, iXBRL, bookkeeping, VAT, taxation, and both management and statutory accounts preparation and review for limited companies, partnerships, and NRLs. She also brings specialised knowledge in conducting Independent Examinations for not-for-profit organisations, ensuring accuracy, compliance, and value-driven outcomes for diverse clients.
Unauthorized copying or plagiarism of our content is a violation of intellectual property rights. We take such matters seriously and will pursue legal action to protect our original work. Anyone found engaging in such activities will be held accountable under applicable laws.
Explore outsourcing solutions, request a free trial or discuss your practice’s needs with our expert consultants.
Book a Virtual Meeting 
Book an In-person Meeting