Why has outsourcing leapt in popularity? Vipul Sheth looks at the factors.
Attendees at last year’s Accountex London would have seen a big shift in the makeup of exhibitors. And certainly, if you were looking at outsourcing or offshoring as an option, then that mix of vendors would have been to your liking.
There were literally dozens of exhibitors purporting to offer outsourcing and offshoring. To see such a staggering (and relatively quick) shift from single figures means that the market has changed rapidly – and everyone wants a piece of the pie.
So, what has happened to drive this change?
Well, if we were to look at the underlying tensions that accountancy practices face in delivering their services, then they have existed for a long time. These include:
You will be waiting to read the word Covid. And here it is. Exacerbating these issues, the pandemic created or accelerated a number of other factors that have driven outsourcing’s take-up.
Sadly, Covid (alongside ongoing concerns about MTD) saw many older practitioners leave the profession.
‘Working from home’, enforced during Covid saw an increased interest in hybrid and flexible working strategies. This opened the eyes of employers: if someone can work for us 100 miles away, what about 5,000?
While outsourcing accountancy services is not new (we’ve been around for more than 20 years), it’s fair to say that it’s never been ‘fashionable’ until Covid struck. And we at Advancetrack can’t speak for others, but we’ve been delivering (and scaling) on behalf of both existing and new practice clients for years.
Technological advancements, difficulties in recruiting accounting talent, and increasingly complex end-client needs, means that being both efficient and scalable fits particularly well with outsourcing and our new offering, Podsourcing®.
In other words, the likes of Advancetrack can offer both a reliable and robust service from a tech point of view, but also one that is with great knowledge of experience of how accounting practices work.
There are some threats to the popularity of outsourcing. The proliferation of ‘outsourcers’ looking to make a quick buck means that there are, frankly, cowboys in the market. They damage the reputation of the other players.
The accounting talent crisis, and increase in the popularity of outsourcing, means that jurisdictions where these staff are based are pushing for salary increases. Therefore, the cost of outsourcing is likely to rise.
Finally, AI. If it can wipe out the work of accountants then that would make us redundant, as outsourcers, too. We are more positive – and is a threat we see turning into an opportunity. AI may make the workings and calculations processes even more smooth, but we need people to review and add the extra touch.
Ultimately, there isn’t one factor that has driven the outsourcing boom. But, despite the threats, we are looking to support accounting practices achieve their ambitions for many years to come.
Vipul Sheth is founder and MD of Advancetrack
If you’d like to talk to us about supporting your practice, please get in touch.
