Outsourcing 101: The Definitive Guide to Outsourced Accounting and Auditing

Introduction

0 %
increase in Google searches for 'accounting outsourcing' in the last five years
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of UK businesses outsource accounting services - Exploding Topics
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increase in global spend on accountancy outsourcing in the last five years
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of companies predicted to outsource accounting within a decade - Vipul Sheth
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There’s no doubt about it: outsourcing is an exploding trend being embraced by businesses everywhere, and it’s easy to see why. A major help for firms of all shapes and sizes, outsourcing allows you to fully focus on core functions, attain growth and achieve long-term success.

That’s certainly the case when it comes to outsourcing accounting services. 

In this guide, we take you through the ins and outs of accountancy outsourcing, what business leaders are asking about accounting outsourcing, how to go about choosing the right partner – and more.

A growing trend...

With staff retention an ever-growing problem and business owners looking to provide a best-in-class client experience from start to finish, having the right team in place is vital. Like with hiring freelancers or contractors, outsourcing can provide you with access to the right team at the right level for everything you’re striving to achieve, from finding efficiencies to boosting productivity and streamlining tasks.

Our research certainly proves that outsourcing is growing in popularity and looking to hold a strong place in the future of accounting – with searches for ‘accounting outsourcing’ up 19% on Google this year alone.

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With that in mind, the team at AdvanceTrack Outsourcing used Generative AI to identify the top 5 asked questions in accounting outsourcing.

The results showed a desire among business leaders and accountancy firm owners to learn more about the many benefits of outsourcing, how to go about choosing the right partner, and which accounting functions can be outsourced. In this guide, we will address each of these questions.

Top 5 asked questions on accounting outsourcing

  1.  “What are the benefits of outsourcing accounting services?”
  2. “How do I choose the right accounting outsourcing company?”
  3. “What accounting functions can be outsourced?”
  4. “What is the cost of outsourcing accounting services?”
  5. “Are there any risks associated with outsourcing accounting?”

Why outsource?

Stuck in the status quo, and keen to boost your firm’s efficiency and success? Outsourced accounting could be the right solution for you!

This is when a business hires a third party, someone not part of the company internally, to manage and complete the business’ accounting affairs.

It’s a fully integrated solution for companies that want to change the way they approach their accountancy work, with outsourced suppliers off the payroll but one of their client’s closest advisors. More often than not, outsourced partners can provide much more than just delivering accounts – being an adviser, consultant and support partner.

Outsourcing allows you to take your business a step further, giving you the facility to deliver a powerful and effective service to your clients. 

A key benefit of outsourcing is undoubtedly its cost efficiency. This is especially vital for small business owners or start-ups looking to get their accounting in order without having to hire full-time staff.  

Training and maintaining in-house accounting teams can also be costly and time consuming. Outsourcing can provide you with a team of fully trained accountants – with all the experience you might need – to handle the work for you, for however many hours you wish. 

Finally, another huge benefit of outsourcing is allowing your business access to a higher level of expertise. Rest assured that dedicated outsourced accounting firms such as AdvanceTrack keep right up-to-date with the latest tax laws and regulations, enabling us to implement best practice, ensuring compliance and effective financial management. 

Why outsource ()

Benefits of outsourcing

15%
Allows employees to perform other tasks
16%
Flexibility
18%
Increases available expertise
24%
Increases efficiency

Polled by Clutch

Four steps to choosing the right partner

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Choosing the right partner is a crucial step for any business considering outsourcing their accounting, as your final decision might impact financial operations and the overall efficiency of your business – both for better and worse.

Expertise

Firstly, evaluate the potential partner’s expertise and experience in accountancy.

To make sure your chosen partner meets your business needs and goals, look for a service provider with a proven track record in handling financial processes, compliance, and tax regulations.

Software and tools

Utilising technology is paramount in modern accounting practices, and the choice of an outsourcing partner should align with your business’ digital infrastructure and requirements.

A proficient partner should not only own expertise in industry-standard accounting tools, but also demonstrate a proactive approach to staying updated with emerging technologies. 

Data security measures

One of the top priorities when outsourcing is to keep your business safe. Make sure your partner adheres to international standards such as ISO 27001 and complies with global data protection regulations.

By evaluating the level of your partner’s security measures, you can prevent potential risks and build a strong, transparent relationship.

 Reputation

And finally, before making the choice, make sure to review the client’s testimonials and references to gain insights into the partner’s reputation and the quality of the service they provide.

An outsourced partner who has strong, close and lasting relationships is often doing the right things.  

There are a few risks that could arise when outsourcing, like miscommunication and trusting a partner with your sensitive information, so make sure you are taking these key points above into consideration, as choosing the right partner is crucial.

"Firms that deliver the best client services are the most successful and profitable"
Vipul Sheth, Founder of AdvanceTrack

What can be outsourced?

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There are various accounting services that can be outsourced, from payroll to bookkeeping activities. So it’s about figuring out what services your business would benefit from being outsourced to help streamline internal work.

Services you can outsource include:

Bookkeeping is a service that needs to be done on a daily basis, and for many businesses, this can be a time-consuming task. Therefore, using outsources services to look after the day-to-day financial transactions can play a key role in increasing efficiency and time planning.

Keeping an accurate tracking and record of all payments made in your books is also a task that can be quite admin heavy. This can be outsourced to ensure accuracy and organisation.

Outsourcing tax accounting can be beneficial for businesses looking for experts in the field that understand comprehensive matters like tax laws, tax returns and tax payments.

Outsourcing credit control services can ensure you have a good cash flow, from raising invoices to reliable payment collections. This will allow your internal team to focus on other tasks, whilst admin heavy tasks are consistently dealt with by your outsourced team. 

Preparing for peaks

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Google searches in ‘accountancy outsourcing’ always spike in January and April, a trend that aligns with the periods of the year generally considered the peak of accountancy and auditing season. That’s due to tax return deadlines and the beginning of the fiscal year. Therefore, it’s particularly important during these months to coordinate with your outsourcing partner to ensure a seamless workflow.  

While different businesses might prefer various approaches to managing peaks, accurate forecasting, thorough planning and efficient communication are some of the key elements of successful collaboration.   

Regardless of the strategy your business employs, make sure you have dedicated a time to discuss your expectations with your outsourcing partner, establishing clear timelines and targets.  

This will also help your partner understand the specific needs of your business and allocate the necessary resources to maintain high-quality operations during the busy period. 

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The future of accounting

With the accountancy landscape always shifting and evolving due to changes in laws, regulations and digital transformations, the big question on everyone’s mind is: What does the future of accounting look like?

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AI, for instance, has already had proven to be a huge disruptor in the sector. Our MD Vipul Sheth takes a big picture view on how things might develop in the future: 

“With Google searches for ‘AI accounting’ up 363% last year alone, it is no surprise AI is drastically changing the landscape of accounting. The question is, will AI be clever, intuitive, and powerful enough that you won’t need outsourcers to support your firm? And, by that definition, does that mean you’ll be able to reduce your own headcount? 

“These are the kind of questions that we’re hearing (or being asked) at the moment. Let’s not beat around the bush: There are a number of people in the outsourcing space that see AI as a huge competitor to their entire business models. 

“Certainly, we can envisage the likes of Xero and QuickBooks looking to add intelligence into their offerings. After all, with masses of data at hand they will be able to turn that into knowledge to be actioned upon. This evolution will drive hundreds and thousands of micro-decisions made on your behalf, which will save practitioners seconds, that turn into minutes and then hours. 

“AI may well free up your people’s time even further than current levels of automation can do. That’s true – but that will be the case for AdvanceTrack’s people, too. We’ve no doubt that our offering will evolve, in tandem with the way practices operate too. 

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“Along with changes due to AI, there’s a substantial reduction in cash transactions in our post-COVID world. Even local establishments that would previously have relied on cash, such as the chippy on the corner, have transitioned to accepting card payments. 

“However, some businesses, especially those in-personal services like barbers and hairdressers, have chosen to remain cash-only. But with an increasing number of branch closures, some of these businesses are finding cash-only increasingly impractical when managing cashflow.” 

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Our system sets us apart!

Our custom built, easy to use project management system sets us apart from the competition. Get ready to streamline your business and finally have time to focus on helping your clients reach their financial goals.

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Automate, systemise and streamline your practice.

We work with practices of all sizes to put the necessary frameworks in place to ensure your success.

With AdvanceTrack working alongside your team, you will find high-level, speacialised workers ready to step in and free up your local staff so they can focus on higher value tasks.

Give your clients more of what they want.. your expertise

 

Accounting is all about building relationships, you are one of the most trusted members of your clients team, so how can you better serve them?

It is easy to get caught up in the general accounting tasks, compliance work is not going anywhere anytime soon. But let’s be honest, its not the reason you became an accountant!

Free up your time, expand your client offerings and really make a difference to peoples lives.. discover the power of outsourcing today!

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Is your practice ready for outsourcing?
 
Chat with our team to find out if a global team could be the right solution for your business!