5 common mistakes Australian firms make when outsourcing and how to avoid them

The talent shortage in the Australian accounting industry is no secret. The costs of finding, hiring, and training an in-house staff member can reach $100K+ in major cities, with some regional cities simply not having the recruits to fill positions at all. Instead of commiserating in what seems to be an endless loop of searching for the right candidate, many accounting firms have begun outsourcing their work to offshore companies who are well-versed in the accounting industry.

Jump to:

• Common mistake 1: outsourcing before completing a documented inventory of tasks that need help
• Common mistake 2: reaching out to an outsourcing partner out of panic
• Common mistake 3: outsourcing the wrong tasks for your firm
• Common mistake 4: measuring success on pricing rather than opportunities gained
• Common mistake 5: not treating your outsourcing partner as one of your team

Avoiding common mistakes can take a lot of the guesswork out of teaming up with an outsourcing company when you’re properly prepared. Asking questions and communicating effectively to your offshore team is the first step, but once you get into the weeds, common mistakes can occur that set you off your path. We’re here to help you avoid those mistakes and make your journey integrating outsourcing a seamless one.

Common mistake 1: outsourcing before completing a documented inventory of tasks that need help

Jumping into outsourcing, especially from a point of overwhelm or stress, can lead to missed opportunities or expectations that are impossible to realise. Having a documented paper trail of your systems and services can make the transition much easier. Knowing what needs to be completed by an outsourcing partner, and which services are better completed in house is integral to a long-lasting partnership. Some questions to ask yourself to make the documenting process easier are:

• Which areas need the most urgent attention to help my accounting firm stay on track?
• What software do we use and what is most integral to our workflow?
• Which tasks are costing me more time than they’re worth?
• What steps do we follow in our regular workflow timeline for our services?
• What does quality control look like and how is it executed?

Common mistake 2: reaching out to an outsourcing partner out of panic

Each accountant can attest to how stressful peak tax season can become. It’s common that accountants might look to an outsourcing partner during a panicked time when all tasks are piling up and creating a huge backlog. The key is to approach an outsourcing partner when you have the time and headspace to properly onboard without the added pressure of client expectations. 

During quieter periods, use this time to choose the right outsourcing team for you. Make sure they have a strong security system to manage sensitive information and data, and that they prioritise credibility, trustworthiness, and have a solid understanding of the industry. That way, you can face busier seasons with the confidence that you would have for any long-standing member of your in-office team.

Common mistake 3: outsourcing the wrong tasks for your firm

Not everything needs to be outsourced and a common mistake some accountants make is to throw everything at the wall to see what sticks. Handing over work that needs a higher level of quality control, is too complex, is a new service, or higher on the client management scale can cause unnecessary issues down the line. Having discernment about which tasks are most readily outsourced can benefit longevity with your outsourcing partner and give you more time back to focus on services that bring in higher revenue for your firm. Some of the more beneficial tasks to outsource first could be:

• Individual tax returns
• Bookkeeping tasks
• Payroll management 
• End of year accounting
• Invoice processing
• Accounts receivable and payable.

Starting off simple with high-volume, lower-complexity work will often be the sweet spot for outsourcing in the early stages as you work up trust with your partner.

Common mistake 4: Measuring success on lower prices rather than opportunities gained

The cost of outsourcing is an understandable element of concern when deciding what would work best for the success of your firm. Instead of focusing solely on the price, it’s important to measure the success of your firm through the lens of new opportunities that have been gained. The goal is to build a better firm. This could look like:

• Having more time for senior staff to work on creating lucrative business advisory opportunities for the firm
• Training junior team members on more complex tasks like client management or strategic planning
• Providing more time for all staff to have a better work/life balance and reducing burn out
• Improving client relationships and being able to source new clients to build upon your existing base
• Gaining the opportunity to check in with existing clients and collaborate on the longevity of your partnerships through feedback and proactive communication.

Common mistake 5: Not treating your outsourcing partner as one of your team

It can be easy to set and forget the team you’ve chosen to partner with especially as the arrangement gets comfortable. Firms who treat their outsourced company as one of their team members get the most out of their arrangement. Communicate regularly, provide constructive feedback, and work towards refining the relationship so both parties are operating at peak efficiency. 

Schedule regular check-ins with your outsourced team, especially during the early stages. Share valuable context about you, your firm and your team so your outsourced partner is able to tailor their approach to your specific culture and clients. Review the arrangement bi-annually to collaborate on what is working, what could be improved upon, and what tasks might be worth outsourcing in the future.