Outsourcing has come a long way and it is now a well understood word around the accounting industry, predominately in relation to tax compliance preparation. It is more common than ever for accountants to outsource their compliance work, and domestic options are now available.
Based on discussions with our current clients, we look at the top reasons why accounting firms are outsourcing, and specifically what benefits a domestic firm can provide:
Cost cutting should not be the only reason to outsource, however, it certainly is a major factor. These costs can be reduced through outsourcing: staff wages, entitlements, retainment costs (bonuses), equipment, physical space, licences, overheads, training and importantly freed-up time for key senior personnel.
DOMESTIC BENEFIT: The common perception is overseas workers are always going to be cheaper. While their hourly rate is low, don’t forgot the middle man is based in Australia and has the same wage costs and overheads you do. Fixed-price domestic outsourcing has been shown to be cheaper and more efficient than maintaining a full-time overseas team.
2. Job Efficiency
Outsourcing allows you to start more jobs more often, reducing turnaround time and increasing cash flow.
DOMESTIC BENEFIT: Having your outsourcer based locally means they’re on the same clock, and can be reached at a moment’s notice during your work hours. It is also reduces any language or ethical barriers provided they operate under a professional standard.
Outsourcing allows your firm to grow without growing pains. Grow your client and fee base without the need for additional physical space, licences, hardware and recruitment.
DOMESTIC BENEFIT: The fear for accountants running this model is the high turnover factor for offshore workers, which can stunt your growth when replacement staff require training in busy periods. Domestically trained staff require little to no training as they have always operated in the Australian tax system. Generally you won’t notice staff turnover with a domestic provider.
4. Realign Firm Goals
Outsourcing compliance allows your firm to realign its goals going forward. You can shift the firms focus and allow your employees to focus on developing and delivering advisory services.
DOMESTIC BENEFIT: You can generally access the principal of a domestic provider at any time to discuss any potential changes that might require an increase in capacity. You can ensure you’re always one step ahead of any big changes, knowing what your outsourcing provider can and can’t accommodate.
Outsourcing provides additional resources without the cost of recruiting and overheads. This can assist during busy periods or unforeseen staff absences.
DOMESTIC BENEFIT: Domestic outsource providers are more likely to work on an ad-hoc basis, providing greater flexibility during both the busy and quiet times of the year. Offshore outsourcing requires full-time maintenance of a staff member/team, which can reduce cost effectiveness during quiet periods when your staff can handle the work internally
Client confidentiality and handling of sensitive information is of high importance to all firms and outsourcers alike.
DOMESTIC BENEFIT: The right domestic provider will maintain Australian servers, meaning no data crosses borders, significantly reducing the risk of data leaks and misuse.
If you are interested in outsourcing please contact us for a chat. We are at our core accountants and have become a friendly extension of our partnering accounting firms.