Is outsourcing the same as offshoring?

In short, no. 

But we won’t end the blog there, because this is one of the most common hesitations from firms who are new to the idea of outsourcing, or just starting to dip their toes in. There’s a big misunderstanding that outsourcing and offshoring are just two different words for the same thing. 

At AdvanceTrack, we offer both offshoring and outsourcing, and the model that works best for you depends on the stage you’re at as a firm, and how your processes work. 

The compact answer

Offshoring = giving work to a third party overseas, or moving functions of your own business function overseas

Outsourcing = giving work to a third party anywhere

It is becoming more common for businesses to offshore processes to companies overseas

The word ‘offshore’ has some negative connotations to it, especially in the world of finance. Don’t worry – when we talk about offshoring here, it has nothing to do with international banking. Offshoring refers to a business contracting work out to another country, or moving their own business abroad, in order to take advantage of favourable economic conditions.

Offshoring isn’t exclusive to product manufacturing. It is becoming more common for businesses to offshore processes to companies overseas where the cost of labour is lower. It’s all legit and there’s nothing to stop you doing so. 

The benefits of our offshoring model compared to others:

  • You can scale with confidence: Build a team knowing that you can scale it, without the day to day IT and Training challenges
  • It’s secure & quality is assured: It is managed and controlled by international Quality and Security Standards audited by BSI. 
  • You have holiday and sickness cover: You can save yourself time and HR hassles and never lose a day of production.

You can find out more about why we outsource to India here.

You can outsource to a service provider anywhere, in order to utilise greater expertise

Outsourcing refers simply to the practice of hiring a third party or individual to carry out work that has historically been carried out in-house. You can outsource to a service provider anywhere, in order to utilise greater expertise, or free up more time for you to focus on the work you love, that you’re best at. That service provider may be in the same country or even the same local area as you, or they may be overseas. 

The benefits of outsourcing:

  • Years of expertise – without having to take on a new employee and train them up to the level you require, you can give the work to a specialist with years of experience under their belt. 
  • You have more time to focus on more important areas – you won’t have to spend all your time and energy on the process you’re outsourcing, freeing you up to focus on the areas that need your attention. 
  • You can save on tech – you can rest assured your expert has the tech they need to do the job. If you’re not having to provide the infrastructure to support the work in-house, you can save on technology expenses. 
  • A difference in time zone may be advantageous – you may find outsourcing outside of your time zone works better. You can go to sleep and wake up to completed work!

You can read more about why we suggest outsourcing here

Saving money is desirable, but the decision to outsource should not be driven by the desire for cheap work

Where the confusion between offshoring and outsourcing is most detrimental is the perceived benefit of cheap labour – that the point of either is to simply deliver your existing services or products at a cheaper cost. Saving money is desirable, of course. Who doesn’t love to save money? But you may find that spending less money results in a higher cost to your relationships with clients. 

Our clients don’t outsource to us because they want us to do the more manual work at a cheaper rate. For starters, how would you go about deciding what your ‘cheaper’ work is?

Your compliance function is your core work – the work that needs to be done well and done consistently. It isn’t something you want just anyone to do. You certainly don’t want to compromise your high level reporting and life-changing advice for the sake of cheap rates either. 

Our clients work with us for our expertise in the industry of accounting, for our desire to make them more proactive in delivering value to their clients – but mostly because they have the right mindset. 

The most successful outsourcing is driven by a growth mindset

It’s not about saving money, but it’s also not exclusive to the big firms either. We’ve worked with Sole Practitioners, two office practices, multi-partner practices and major international groups. We’ve found it’s not about the size, it’s about the attitude. The firms that see the most success are those who are able to look at their current offering and say “I want to be able to do more”. Those who don’t want to be stuck doing compliance only. Those who don’t want to see staff leave to do higher level work elsewhere. Those who want to be an integral part of their client’s business strategy instead of waiting on a monthly conversation. 

We wrote more about those types of firms here.

Choose the engagement model that works best for you

Do you want to:

  • Do more of the work you love?
  • Improve the client experience by having the time to offer more value?
  • Free up space to train more of the team to deliver your high level work?
  • Have the processes in place to make more profit?

Great! All you need is a little help figuring out which model suits you best. 

Scalable Delivery Model (Outsourcing)

  • You have a standardised process
  • You have fluctuating demand across the year
  • You understand deadlines and will work with our teams to get the process right
  • You understand that a team supports you

Dedicated Offshore Delivery (Offshoring)

  • You don’t have a standardised approach
  • You have steady workloads across the year
  • Your service is quite bespoke to your clients
  • You want to speak to the same team members every day

Ask yourself where your business is right now, and what you want to achieve. Then let us help you figure out which option is best for you. Take this short questionnaire to tell us about your outsourcing needs. It only takes a few minutes. 

Premium service will come in useful for practices that use outsourcing strategically

“If you commit to AdvanceTrack, we’ll commit to you.” That’s the message from AdvanceTrack MD Vipul Sheth, having launched a premium “Amazon Prime-style” service for its top clients at its annual conference.

“The new service is aimed at clients that use outsourcing strategically, rather than just an overflow capability,” Sheth told the 120 attendees at AdvanceTrack’s annual June event in London.

“We’re saying to firms that if you see outsourcing as a strategic delivery resource, we will support that with a higher level of service.

“What we’ve seen is that the firms that use us regularly and strategically grow faster and deliver higher levels of service. The irregular, overflow users, haven’t fixed their workflow and process problems.”

The use of outsourcing frees up practices’ best people to spend time with clients, rather than entering data. “As a result, they deliver more and better value to the client base,” said Sheth.

AdvanceTrack has made a number of key investments in recent months. The outsourcing specialist has increased the number of
account managers working with its accounting firms, while upgrading its core systems.

“Investment in tech is helping us manage differing levels of service so we can do so consistently and grow headcount to help,” said Sheth.

 

Grow with our Academy

Also announced at AdvanceTrack’s ‘The Client Journey’ conference was its Growth Academy, in partnership with Paul Shrimpling.

It’s about deep, habitual, systemic change to set up your firm for a bright, profitable future, and is for 1-5 partner firms that want profits and the capital value of their firm to change.

The academy is focused on two main areas: accountability and motivation. You’ll be held accountable with regular calls and visits to review the actions you’ve committed to and to agree any next steps.

Not only that, but the academy will have a profound impact on how you and your team feel about the core work at your firm, which will in turn help your team enjoy the work they do.

Firms that have gone through the academy have experienced tremendous results: increased staff retention, improved profits, extra work and higher fees. If those are the results you’re looking for, and you want to make a change to remain competitive, then this is the next step for you.

Accountants hit conference season with a bang at the start of May, attending both AdvanceTrack’s annual event and Accountex. Kevin Reed covers the main messages coming out of a busy but fascinating three days

On 1-2 May, Europe’s biggest accounting and finance show Accountex saw a record-busting 9,063 attendees – an event in which AdvanceTrack was delighted to take part.

We spoke to some of the key participants to find out what their new products and services are, along with views on the current issues impacting accountants’ working lives. Key topics included: how some accountants and clients have moved down ‘the digital path’ while others still delay; and differing views on the direction of travel set by MTD bridging software.

 

QuickBooks

QuickBooks’ Making Tax Digital Product Suite was being demonstrated at the show, including bridging software. These new tools, and their importance to the marketplace, were a key focus of our discussion with its sales director Nick Williams.

Williams said there had been “lots of work” by accountants to bring themselves and clients towards MTD compliance, and bridging software was a step on that journey for many.

Its pre-Accountex research found that 89% of small businesses were now aware of MTD, with 84% believing they were now compliant.

And for those accountancy firms using MTD as a catalyst for transforming into a cloud-based adviser, there was more good sentiment. QucikBooks also found that 49% of respondents believe MTD will have a positive effect on their business – up from 37% since March.

“The transition to MTD was never going to be without its stumbling blocks for accounting professionals and small businesses, but it is pleasing to see increasing numbers realising the time, efficiency and cost-saving benefits that digitisation can bring,” said Williams.

He believes that the bridging technology, which some industry insiders believe should only sit in place for a year, will continue to be used beyond that period by some advisers and their clients.

“We’ll always see customers in need of support – that will remain with bridging,” he said.

Williams also referenced a number of other innovations, including SmartLook – which enables QuickBooks to work quickly and interactively to resolve any problems users may have via a one-way video feed and screen-sharing; and Online Advanced Payroll – enabling accountants and payroll bureaux to manage multiple businesses with complex payroll needs.

 

IRIS

Accountants are “bridging the digital divide”, believes IRIS chief marketing officer Nick Gregory.

IRIS also released new statistics for the Accountex launch: some 215,000 documents were e-approved between accountants and their clients via its OpenSpace document sharing platform in January 2019 – a 328% increase on January 2018.

“Accountants are recognising that they have to be online,” Gregory told InsideOutsourcing.

Gregory said that IRIS’s customers were “pushing” the technology house to enable them to use a more “open” software stack and access via mobile devices.

“We want to use data to deliver more from a productivity point, and to link with third-party applications,” he said.

A key part of this process will be an online “platform” from which services can be accessed – the first application it will make available is an anti-money laundering solution this summer. “You’ll be able to onboard clients and run all the necessary checks,” said Gregory.

 

MyFirmsApp

“Many accountants are thinking: ‘I’ve got my cloud clients and they’ll be fine with MTD… but what about the great unwashed?’,” said MyFirmsApp head of product management and customer experience Mike Page, when describing how to deal with swathes of clients that still haven’t moved to digital bookkeeping.

Page sees the app as providing a simple solution to get accountants’ clients moving on the digital path. Its new platform will launch in the summer, providing a new user interface for both accountants and their clients. A new version of receipt capture will also be introduced.

MyFirmsApp has also produced “The Definitive Guide to Bridging Software”, after viewing what it described as a “baffling array” of options.

 

CountingUp

Millions of pounds could be flowing into the coffers of CountingUp, with up to £12m sought in the near future to drive more product development and marketing.

The bookkeeping and banking app is “100% on board with accountants”, chief commercial officer Andrew Garvey said, viewing them as “the most important part of our business”.

“With 4.5 million microbusinesses out there we know how hard it is to get them to use accounting tech,” said Garvey.

Accountants still have many clients “not using anything” to manage their bookkeeping and tax data. “We’re trying to make accountants’ life easier,” he concluded.

In the next year Garvey expects to see greater convergence between accounting and banking from a technology perspective.

 

AdvanceTrack

A new way to help you transform your firm has been developed by AdvanceTrack. The AdvanceTrack Growth Academy has been launched to guide practice owners and seniors towards positive change for their practice.

In partnership with well-respected consultant Paul Shrimpling, the academy aims to have a profound impact on how you and your team feel about the core work at your firm, in turn helping your team enjoy the work it undertakes.

The academy is focused on two main areas: accountability and motivation. You’ll be held accountable with regular calls and visits to review the actions you’ve committed to and agree any steps.

AdvanceTrack MD and founder Vipul Sheth said the programme would not only inspire accountants to make change, but provide them with the support to deliver. “It can be very lonely at the top,” he said. “We believe that the academy will provide both a strong support network, accountability and ongoing practical advice to help you take positive action to improve how your firm operates.”