When you’re trying to cut costs, outsourcing often comes up as a solution – but how exactly does it do that?
The short answer is that outsourcing allows you to keep your team lean and benefit from economies of scale at our end.
Let’s talk about the elephant in the room, though: some people will tell you outsourcing saves money because you’re getting lower quality service. And if you work with, to be blunt, faceless cowboys, that might be the case.
When we launched Diamond Outsourcing, this was one prejudice we wanted to challenge. You’ll notice that we go out of our way to be transparent about how our services are delivered and who is delivering them.
When it comes to our overseas team, there’s the first saving: you get access to talented, qualified people like Chirag and Hardi at lower cost than someone living and working in the South East of England.
Employee costs: more than just salary
The second saving is on your own wage bill – easily the biggest burden on UK accountancy firms, above even the cost of commercial property.
There’s a simplistic view you’ll often hear expressed by people who believe recruitment is the answer to every single resource issue: “But we could hire another member of staff for what we’re spending on outsourcing!”
What they haven’t considered, of course, is the long-term commitment represented by taking on permanent staff. You’ve not only got salary to think about but also the cost of auto-enrolment workplace pensions, National Insurance contributions and office space.
Not to mention the fact that if your business needs to downsize, it’s much more painful to say goodbye to permanent employees than to simply reduce your outsourcing commitment.
The accountancy factory
There’s a reason the production line approach became the dominant model in the 20th century: it’s efficient. Outsourcing brings some of that approach to accountancy.
Think about it: someone who processes, say, hundreds of VAT returns for multiple UK accountancy firms is bound to be faster and more efficient.
They’ll have systems and processes set up to do that one thing really well, over and over again. They know what needs doing and how to do it almost without thinking.
Because they’re faster and more efficient, that means we can ensure your outsourcing bill is always competitive.
Outsourcing generates income
Let’s finish on a real positive: as well as reducing your firm’s costs, outsourcing can actually generate more income.
It makes it easier for accountancy practices or finance teams to take on more work at short notice, removing a potential bottleneck that might stop your sales team closing deals.
It also offers accountants the opportunity to offer a wider range of services – and more lucrative ones – to clients. If you don’t currently offer a payroll service, for example, outsourcing it to us can be a great way to dip your toe in the water in the first instance.
To explore how outsourcing could cut your costs and make your accountancy practice or finance team more efficient, get in touch.