Are you looking for a cost-effective source of extra support to get through a particularly busy accounting period? Or perhaps you want to launch a new service but your staff isn’t trained in it yet?
Outsourcing some of your business might be a great way for your accounting firm to cope, grow and thrive.
But what exactly is outsourcing? How is it different from practices like subcontracting and temping?
And how did we get to the point where seven out of ten UK companies outsource at least some of their services?
A short history of outsourcing
While outsourcing has been around since the 1950s, it only really emerged in the 1980s and became formally identified as a business strategy in 1989.
At the time, a drive to protect profits had prompted companies to diversify assets, investments and services, which resulted in bloated management structures.
So, they started focusing on their core business and outsourced the other aspects of their services.
In the 1990s, organisations started to outsource for cost-saving purposes, handing ‘housekeeping’ tasks to others, such as accounting, data processing, security and human resources.
Today, relationships between outsourcers and clients have evolved so that an outsourcer will sometimes complete tasks relating to a business’s core function in a close strategic relationship.
This is how Diamond Outsourcing operates, offering to take on some of the day-to-day work of accounting firms.
Nowadays, it’s common for businesses to outsource some of their services. Throughout the UK, only 25% of businesses have never outsourced a service. In London, that figure is lower again at 17%.
Outsourcing, subcontracting, temps: what’s the difference?
It’s easy to mix up outsourcing with other practices like subcontracting and hiring temporary staff. They’re similar in the sense that they each involve getting an external individual to do a job for your business.
Let’s go beyond that.
First, outsourcing is all about giving tasks that would otherwise be done in-house, in their entirety, to an external individual business.
It’s often done as a way to reduce labour costs or as an interim practice while a new service is set up.
Similar to outsourcing, subcontracting involves a firm hiring a service provider to complete a desired task that cannot be done by in-house teams.
The key difference is that the subcontractor is hired by the original contractor and is brought on to complete a very specialised task or complicated part of a project. The expertise of a subcontractor is therefore a major difference with outsourced workers.
As such, subcontractors are most common in complex projects, such as construction and information technology.
The contractor, who has overall responsibility for a project’s completion, will be responsible for subcontractors and will work directly with them.
With their time agreed upon through a contractual basis, subcontractors tend to have short term relationships with clients, unlike outsourcers who sometimes support their clients for months, if not years.
Temporary staff, or ‘temps’, are similar outsourced workers, but unlike them, they are more likely to come into your office and work alongside you and your team.
They aren’t typically used for specialised work like subcontractors or to help get a brand new service off the ground like outsourcers.
Instead, they usually complete simple, menial tasks during those busy periods when an extra pair of hands is needed in the short term.
The responsibility for supervising their work rests with you – and you’ll generally have to provide them with office equipment and so on.
Our outsourcing services
If you have an accounting process that you don’t have the capacity to take on right now, but which needs the input of skilled individuals, Diamond Outsourcing is there to help.
As an outsourcing company, our success is measured by the success of our partners, so we’re entirely committed to making you look as good as possible.
Reach out to us on 0203 9500316 or fill out a contact form here to talk about which part of your accounting firm you can outsource to us.