Small accountancy firms in the UK face a unique dilemma. Their efficient services place them on the path to expansion. But, to expand, these small accountancy firms have to start hiring more employees. Small firms that keep hiring more employees eventually face budget problems.
Hiring in-house accountancy experts keep getting more expensive with each hire. That’s one of the main reasons why accounting outsourcing firms provide better value than in-house accountants.
Recruitment is a flourishing trade in the UK. According to Business Advice, hiring firms have to pay recruitment agencies an additional charge of 20-30% the candidate’s salary. Let’s assume that an accountant’s yearly wages are £30,000. Then, the accountancy firm would have to spend well above £5,000 on the entire recruitment process.
Here are the variables accountancy firms must consider while assessing the ‘true cost’ recruiting an accountant –
Recruitment Costs – If small accountancy firms choose to partner with a recruitment agency, it will cost them a lot. Or, they can select the unreliable option of posting ads on job sites. Doing so costs a lot, and there’s no guarantee that the firm will receive high-quality applicants.
Salary – The main recruitment cost is salary. Small accountancy firms in the UK usually have to pay over £30,000 in wages to hire a qualified senior accountant. The salary amount may increase depending on experience, contract specifics, etc.
Bonuses – Accountancy firms in the UK are expected to pay bonuses to their in-house members in a bid to boost employee retention. On average, small accountancy firms have to shell out 6% of total pay to staff-members as bonuses.
National Insurance – Every employer in the UK has to contribute to their full-time employees’ National Insurance (NI). That’s 13.8% of the total salary.
Training – Most small accountancy firms in the UK engage in client-specific activities. Recruits have to go through at least a week of in-house training (paid) to become accustomed to their new responsibilities.
Office Space – Unless small accountancy firms hire new members to replace old ones, they’ll have to spend on providing new bookkeepers with desk space, a computer, etc.
Other costs include HR costs, pensions, holiday cover, sick leaves, etc. Small accountancy firms in the UK don’t experience these hassles when teaming up with top accounting outsourcing firms.
Hiring these offshore experts doesn’t involve these additional expenses. Plus, employers get guaranteed quality. They don’t have to train offshore experts. Top offshore accountancy experts handle thousands of client accounts. Their services come with a guarantee of accuracy – something that a new recruit cannot provide.
Another main reason why small accountancy firms in the UK prefer outsourcing is that they get access to a larger talent pool. There’s a serious shortage of accounting talent in the UK. According to a recent forecast, the UK will need to recruit 80,000 more accountants by 2050 to meet long-term demands. Simply put – there are not enough high-quality accountants for small accountancy firms to choose from.
The report states that in 2008, the UK had 94,000 qualified accountancy professionals. In 2014, there were only 76,000 qualified accountancy professionals in the UK.
The sector’s pool of skilled talent is not big enough to address commercial needs. That’s why small accountancy firms get better results when they outsource.
Efficiency and Innovation
Accounting firms operating on a small scale, do not have access to computerized systems. Offshore accountancy firms use of latest accounting tools and software. The two firms can merge to reduce costs and increase operational efficiency.
Investing in high-quality offshore experts eliminates the need for small accountancy firms to spend heavily on digitization. Small accountancy firms in the UK don’t have the workforce required to administer these computerized systems. They can depend on their offshore peers to offer a cost-saving solution.
Easier to Upscale
Offshore accounting experts fulfil all accounting requirements in return for fixed payments. Small accountancy firms in the UK can hire them on an hourly basis or a full-time basis depending on their needs.
Since outsourcing costs much less than hiring in-house accountants, the firm can focus its resources on improving other aspects of the business. For instance, a small accountancy firm’s employee can entirely focus on providing face to face consultancy sessions since there’s no need to crunch numbers on a day to day basis.
The leading accounting outsourcing firms provide services that are compliant as per the international standards of accounting and taxation. There are rarely any compliance issues with these offshore experts.
How Top Accounting Outsourcing Firms Outperform In-House Accountants
Accountancy firms must consider these crucial factors when making business decisions. The leading providers of offshore accounting can work with all major accounting software systems. They can even provide legal assistance when deciphering complex issues such as VAT or tax.
Overall, in-house accountants cannot offer the premium quality that these experts guarantee. Outsourcing is the best way for a small or medium-sized accounting firm in the UK to gain access to a vast pool of talented accountants at a cheap rate.