The Outsourced Accountant Chairman Nick Sinclair recently held a webinar on futureproofing the accounting workforce. In this episode, he discussed various topics ranging from the current challenges facing the accounting industry to effective strategies firms can implement to some case studies of leading accounting firms.
Challenges Accountants Are Facing Today
Globalisation is disrupting the accounting industry. By removing barriers in trade and business, it has made the world a lot smaller and has now made it easier for firms to tap into talents not present in a specific location.
This makes it possible for businesses to outsource jobs or create offshore teams. By having the ability to access new markets, businesses are presented with new opportunities to drive success to their firms.
The ability to store large amounts of data in the cloud has provided accountants a better opportunity to deliver real-time information and add more value to their clients. This makes access to data easier and more secure.
Evolving at a rapid pace, technology has made the accounting practice a lot easier by automating several processes. The problem is, not many companies are maximising its use and that it is the number one thing that’s bogging down firms.
These days, customers are demanding more. Customers want more; they want things done quicker. They want: proactive advice, to kept up-to-date with progress, and regular communication.
These expectations can, at times, be overwhelming for accountants, however. That’s because many of our accountants are bogged down with time-consuming tasks.
There is currently a shortage of the “right talents” onshore. That means firms need to get the right people to do the right work for the right price. Building a global team offers a solution to this dilemma by providing the opportunity to tap into the skills of highly qualified individuals from another location, like the Philippines.
Cost of labour
Setting up a global team will allow businesses to save on costs. Hiring accountants (and other professionals) offshore come with greater savings: the cost of hiring four offshore team members costs the same as employing one onshore team member.
Setting up a global team addresses these critical challenges. But while offshoring helps enhance a firm’s capacity, it’s important to remember that it does not offer immediate results; it’s a long-term play. But when done right, firms will notice impressive results.
Capacity Issues Are Bogging Down Firms Looking To Grow
Most firms experience capacity issues (80%). In fact, it’s the biggest issue for firms looking to grow. They don’t have time to plan because they are stuck with running the business. There is no time to rise above the day-to-day work.
Building a global team can help you build capacity. It will also do the following:
- Improve team productivity
- Help the onshore team to add significant value to clients
- Find people with the suitable skills for specific roles
On Setting Up A Bookkeeping Division
Most of the time, accountants dislike doing bookkeeping because it is messy and, oftentimes, time-consuming.
However, there is a huge opportunity to increase profits through bookkeeping. It is, in fact, the fastest growth area in our business. It is also effective in fencing clients in because when you offer this kind of service, you’re basically offering clients everything they need.
Running a bookkeeping division offers several opportunities:
- Create additional revenue streams
- Increase margins by taking care of compliance
- Strengthen relationships between accountants and clients
There is a huge dynamic shift over the years thanks to cloud technology. Now, both clients and accountants can access data real-time. It’s possible to create a distributed workforce. Remote work is possible.
Because of this, accountants can now take steps to be more proactive, which is what clients want.
That means they can now become the trusted advisor. That is because, in most cases, the bookkeepers are considered the trusted advisors since they talk to the clients more often.
Why Should You Consider Outsourcing?
Offshoring Myths And/Or Truths
Outsourcing is offshoring
Outsourcing entails obtaining services from a third party company which can be located anywhere. That means the service provider can be located in the same location as the business. Offshoring, on the other hand, means acquiring services from another country. This can also mean the re-location of certain aspects of a business to another country.
Offshore service providers, like The Outsourced Accountant, employ strict security measures. Often times, the security risks come from the companies themselves, and not the service provider. A good example would be the staff accessing unsecured websites or logging into their work accounts from unsecured locations, like public wi-fi connections, etc.
There’s a lot less risk when you have your own global team.
Equates to lower quality of work
Offshore teams are some of the most qualified and talented professionals you can find. In fact, countries like the Philippines are teeming with highly skilled professionals. And that is one major factor why many businesses expand both their offshore and onshore teams.
The misconception about offshoring resulting in poor quality work stems from the early days when clients transfer work to a company only to get subpar work. We’ve pivoted the way we work. You are in control of how you run your global team so that everything is aligned with your processes, workflows, and systems.
New accounting concept
Offshoring accounting is not a new concept. This business model has been used by companies as early as the 1970s. In the 1990s, technology has allowed outsourcing in the accounting industry possible. Now, technology has become a huge enabler for offshoring and firms are starting to realise its benefits.
For the last 5 years, outsourcing has gone from “I am not doing it” to a majority of people wanting to do it. Now, it’s more about who is not going to do it. More and more firms are talking about and considering it.
Automatically means lower prices
In a lot of cases, the biggest reason accounting firms build a global team is for capacity. To do that, it will require you to get the right people to do the right work at the right price. When building capacity, it’ll be beneficial to have four offshore team members, the cost of which is equivalent to one onshore team member. That way, your firm gains capacity without spending a lot.
Offshoring only suits low-level tasks
The reality is we all have all types of levels of work for clients from compliance to complex business strategies. Anything done locally will probably be done in our global offices. The level of work done is significantly higher than people’s perception.
Team members cannot be client-facing
Some people will think that offshore team members are not allowed to face clients. It actually depends on the client. It comes down to the firm’s strategy. In most cases, offshore team members interact with the clients on a regular basis.
A fad that will eventually be replaced by artificial intelligence
Even with the advent of technology, it’s important to know that people will always be needed in the accounting industry. Artificial intelligence cannot wipe out the people component because the future of accounting will need actual accountants to audit the data processed by AI.
What Are Leading Accounting Firms Doing?
How much of your time is actually spent on the computer screen instead of sitting in front of the clients or on the phone, talking to clients?
Their partners are running the business like a business. They have someone to take care of the routinary tasks, like managing emails. If you actually track your activities, you might be surprised at how and where you spend your time.
Accountants who are too busy will not have time to ring their clients. This can be traced back to the lack of capacity. Because they are bogged down with work, accountants are sacrificing the chance to build a relationship with their clients. But by implementing time-saving measures, like getting an executive assistant, you free up time so you can spend more time in front of clients.
Epic Tips And Action Plan
If nothing changes within your firm, then nothing changes. You cannot expect different results when you are not doing anything new.
Here’s a challenge: get your team to write down the key things they spend their time on.
A lot of the philosophy around this is pushing the work down so you can push your team up.
How much of your accountant’s time is spent on doing administration?
Are they doing the right type of work?
Analyse the way you are spending your time and then figure out if it is the right way to spend your time.