Outsourcing is an obvious option for accounting firms that wish to scale and grow, but they must dedicate enough time and energy to developing a strategy for it to be successful.
In my experience in the outsourcing industry, I’ve seen firms scale and grow in as short as six months, some even faster, or for some not achieving it at all, no matter how long. I would say it all depends on the time and effort put into it, the strategy and the kind of guidance you get along the way during your outsourcing journey.
To make the experience less challenging, here are the first three of six crucial steps to help ensure your journey is on track.
Step 1: Work through firms to see which tasks can be outsourced
I’ve asked some firms to have a very good look at and work through their processes to identify three types of tasks:
- Process-driven tasks – tasks that you don’t enjoy doing but you have to do because it’s part of your job.
- Value tasks – tasks that you enjoy doing but you cannot do because you’re stuck doing the process-driven tasks
- Growth tasks – tasks you would assign to your personal or executive assistant, or a specialist (i.e. marketing tasks) that can help give you more time back and start taking care of the growth aspect of your firm
Often, the process-driven tasks mostly fall in the compliance and bookkeeping areas. I say to them, how about freeing your staff of these time-consuming tasks and let them do higher value tasks.
Process-driven tasks are commonly outsourced while your local team takes care of higher value tasks. Freeing your local staff up from these tasks enables them to get to higher value tasks, and/or more client-facing and advising time – an upskill they might not have gotten the chance to had they not been freed from the time-consuming tasks.
Advising, whether they be client-facing or creating strategies to further help and bring value to their clients, is what many accountants have moved to already.
When you outsource the process-driven tasks, you get a fascinating and highly valuable insight into productivity comparisons. You start to get performance visibility that you’ve never had before (for instance, is the offshore team performing more reconciliations per hour than our Australian team does in a day?).
You begin to see the inefficiencies in your processes, and from there you can start to streamline and save a great deal of resources.
Cost savings is also an important factor. One way to demonstrate this is how many people would you get offshore for the price of someone locally. The cost of one accountant in Australia can be the same as four in the Philippines. This can enable you to build capacity very quickly and help you free up local talent to work with customers more readily than ever before.
The third type of tasks are growth tasks – those that need not be done locally, aside from accounting and bookkeeping. These include roles like virtual assistance, marketing, and client relationship management. All these roles can be offshored, giving you and your business more room to run by itself.
In general, we have found that the outsourcing approach enables the firm to grow and retain more local talent as the staff are spending more time on the tasks they enjoy doing, and the firm is strategically set up to grow more effectively.
Step 2: Engage a reputable partner
Getting the guidance of an outsourcing partner is crucial to your success, so I would strongly recommend to give this as much time as you can. However, outsourcing/offshoring comes in various models, and knowing which one suits you best is important.
Four types of growth models:
- Task-based – for one-off tasks; qualifications of the freelancer are not validated; staff, most often, don’t work for you exclusivel
- Project-based – for longer-duration and bigger tasks; staff may not work for you exclusively; may not offer the expertise you are looking for; can be costly; output is poor; significant overwatch required to manage project qualit
- Outsourcing – specialised firms may understand your business and can offer customised services; recruitment, IT upkeep, other administrative tasks are covered for you; can be challenging if the outsourcing firm is not familiar with your business or a specialist in your industr
- Offshoring – you set up the team in an offshore location to suit; doesn’t require you to do the works, like facilities and hiring; staff work for you exclusively
It’s essential that you work with an outsourcing partner that will help you identify your needs and match you with a suitable model aligned with your business goals not only to allow you to be more effective today, but to allow you to build the firm you need for the future.
Step 3: Develop a long-term plan on how to scale
As mentioned, scaling via outsourcing is a long-term strategy. It will require your time and effort. It is not a one-size-fits-all approach. There are best practices methods that can help you, but nothing will work if you don’t work on it and with it. Where to begin? Here are some tips.
- Invest heavily in developing first-rate procedures and systems to help you uncover opportunities in the way your business runs and to be able to address them.
- Use the right technology, and the technology will help you get the work done. Fears such as turnaround time, quality of work, etcetera are common, but using the right technology, from the right accounting software to communication tools, is a big step that you need to factor into your long-term plan.
- Identify roles of people and business structure: which ones should be local or should be offshore is important. Aside from the tasks to be outsourced, I recommend that all roles should be clearly defined. This is even more important when integrating the outsourced/offshore component of your team.
- Appoint a champion – this is one of your local staff who is an expert in your business, at the same time, can be in charge of training and managing the offshore team. Preferably someone with great people skills, a knack for teaching, and willing to be offshore several times in a year. A lot of firms shift process-heavy work to promising graduates and develop them with the opportunity of managing the offshore team, while taking up more advisor and face-to-face time with pre-determined customer segments.
The next three steps will be coming soon.
This article was first posted on AccoutantsDaily. You can find the original article here.
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