How outsourcing accounting responsibilities help new accounting companies?

by Kristen White Blogger
Entrepreneurs who have recently set up new accounting firms often struggle to handle the administrative aspects of the business once they expand. Pragmatic business owners find it hard to delegate core business responsibilities, such as accounting. However, the financial benefits of engaging in outsourcing suggest that these business owners need to rethink their approach.

Cost-Value Analysis

An increased need to recruit accountants is a strong indicator of accountancy firm growth. However, in the UK, hiring an employee and placing them on the annual wage bill can be too expensive for some small-time accountancy firms.
The costs of setting up an in-house accountancy department include -

· Salaries – On average, a senior accountant in the UK earns £34,466 per annum (£15.72 per hour). 
· Recruitment Costs – The leading recruitment agencies in the UK charge at least 20% of the employee’s final salary. Roughly, that’s £5,000 added to the yearly wage of £34,466.
· Training – New recruitments may take time to settle into their new job specifications.
· Screening and Interviewing costs.

Overall, a firm may end up paying roughly £40,000 per recruit. That’s more than most small accountancy firms can manage!
On top of that, there’s always a risk of making the wrong recruitment. That’s why small-scale accountancy firms are searching for accounting outsourcing services as cost-effective alternatives.
But, how much do accounting outsourcing experts charge? The best accounts outsourcing companies offer flexible payment options -

Pay as You Go – The accounting outsourcing company charges the company at an hourly rate. Depending on the complexity of the services, hourly rates can range from £8/hour to £15/hour. That’s considerably less than what in-house bookkeepers charge on per hour.
Seniority demands better salaries, whether a company outsources the task or not. However, these experts guarantee quality work for pre-determined amounts of time. If the accountancy firm isn’t pleased with the services of the outsourcing experts, they can cancel anytime!

Full-Time Outsourcing Services -
Some of the best accounts outsourcing companies have managed to score long-time contracts with major accountancy firms in the UK.
On average, these experts charge anywhere between £1000 to £2000 per month for senior-level services. Under this model, the accountancy firms are charged fixed rates every month. The outsourcing experts are required to work for a specific number of hours.

This model is perfect for small-scale accountancy firms that handle high volumes of work. Managing the accountancy practice becomes easier as full-time equivalent (FTE) employment is cheaper than paying hourly rates. Accountancy firms can balance their budgets without worrying about increasing expenses.

However, working with an outsourcing accounting expert on an FTE-basis is not easy. Accountancy firms need to set up fluid task management and communication systems to ensure there are no undue disruptions.

Overall Advantages of Outsourcing

In London, daily wages for accountants is around £250/day. This figure keeps increasing every day. If we consider holidays, training days, sick leaves, etc., the average accountant works for 225 days per year, costing the accountancy firm roughly £56250 per month. So, the cost-value advantages are pretty clear. Small-scale accountancy firms looking for accounting outsource services can also expect these additional advantages -

· Expertise and unique perspective
· Improvements in management skills
· Zero risks of fraud
· No hidden add-on costs you’re not aware of:
· Complete reliance
· Long-term partnerships

Accountancy firms unsure about outsourcing must consider these advantages!

Sponsor Ads

About Kristen White Committed   Blogger

285 connections, 0 recommendations, 1,021 honor points.
Joined APSense since, August 19th, 2016, From Chicago, United States.

Created on Sep 28th 2020 00:00. Viewed 328 times.


No comment, be the first to comment.
Please sign in before you comment.