Outsourcing as a Tool to Maximize Accounting Firm Profitability
Outsourcing as a Tool to Maximize Accounting Firm Profitability
Just what is "outsourcing"? Outsourcing is the use of an outside professional or professional organization to perform a project or a series of related tasks for a specific period of time.
Accounting
Contract assistance is available for specific projects or regular tasks such as general ledger maintenance, invoicing, accounts payable and/or receivable maintenance and other related functions. By outsourcing any or all of these functions, the need for accounting employees can be reduced or eliminated.
Accounting firms are accustomed to Bookkeeping, Accounting and other support functions like payroll processing, accounts payable processing and Financial Statements. Outsourcing builds on that concept but does not require day-to-day management and direction from an on-site supervisor or manager. When a function is outsourced, the individual has total responsibility for the project or work and has the ability to take it from beginning to end with minimal, if any, direction.
Most of us are familiar with the typical functions which have been outsourced in the past, such as: Quarterly payroll reporting, year-end tax returns; annual financial statements and audits. Today, outsourcing functions have expanded into many other areas.
This trend will continue for several reasons:
1. Client service demands that we exceed, not just meet, client expectations. How can we be an expert and 100% focused on everything?
2. The annual cost of an employee today is enormous when you consider the total compensation package; the risk and the downside can be equally as great.
3. Employers fear the ramifications of hiring the wrong person. How do I fire the individual if they don't work out? What happens if I get sued?
4. Advertising, interviewing, hiring and training are extremely time consuming. How do I find time to do those tasks and meet my clients' needs at the same time?
5. Often times we don't know all of the facets of a particular job - so how can we teach someone how to do it?
6. Law practice continues to become more and more specialized - is our time better spent focused on our specialty?
Even for those Accounting firms that are large enough to have a human resources professional, the "people game" has become a tricky one. We all know employee loyalty is at an all time low. In times gone by, it was customary for a departing employee to provide an employer with two weeks notice when the employee was resigning from a position. Sometimes this happens today and sometimes it doesn't. And, even if an employee gives two weeks notice, it is not enough time to replace that individual and have them provide some training to the new employee to ensure a smooth transition. Did you know the average time to hire a new employee is one month and depending on the complexity of the position, it is generally six months before the new employee is fully functional? When you outsource, you relieve yourself of these problems because the person is not your employee.
Human Resources and Legal Staff
Similarly, accounting firms often have trouble supporting or adequately staffing their human resources function. This often results in less than perfect employee relations, quality problems, and possible exposure to liability.
It is no secret that the opportunities for partnerships are shrinking and that the demands of making partner are increasing exponentially. Similarly, lawyer dissatisfaction continues to rise; many accountants long for fewer billable and marketing hours and more family time.
How do you know when it makes sense to outsource or hire a temporary rather than hire your own employee? Here are some questions to ponder. . .
1. Do you have a task or assignment of a specific duration?
2. Do you have a specific group of tasks (such as some accounting functions) which, if they would be done by an outside party, rather than your employee, would relieve you of administrative tasks and thus free-up your time for client matters?
3. Based on a specific group of tasks, do you feel you need to hire a new employee, but are uncertain of the actual job description at this time? Would it be helpful to develop the job description with a person who has inside knowledge of what the task or series of tasks will entail?
4. Are you tired of dealing with management issues which interfere with your client work?
If you answered "yes" to any of the above questions, your firm could be a candidate for outsourcing or, at a minimum, temporary staffing. While outsourcing is not the answer for every job in an accounting firm, it is increasingly becoming an alternative.
Outsourcing as a Tool to Maximize Accounting Firm Profitability - To learn more about this author, visit Sunil Khullar's Website.
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Outsourcing is a term which has been catching on during the last five or so years. Although its definition is difficult to find in a standard dictionary, for those of us who consult with law firms, it's a familiar term and offers an extremely effective way to cut the costs of delivering services while maintaining, if not improving, the quality of those services.
Just what is "outsourcing"? Outsourcing is the use of an outside professional or professional organization to perform a project or a series of related tasks for a specific period of time.
Accounting
Contract assistance is available for specific projects or regular tasks such as general ledger maintenance, invoicing, accounts payable and/or receivable maintenance and other related functions. By outsourcing any or all of these functions, the need for accounting employees can be reduced or eliminated.
Accounting firms are accustomed to Bookkeeping, Accounting and other support functions like payroll processing, accounts payable processing and Financial Statements. Outsourcing builds on that concept but does not require day-to-day management and direction from an on-site supervisor or manager. When a function is outsourced, the individual has total responsibility for the project or work and has the ability to take it from beginning to end with minimal, if any, direction.
Most of us are familiar with the typical functions which have been outsourced in the past, such as: Quarterly payroll reporting, year-end tax returns; annual financial statements and audits. Today, outsourcing functions have expanded into many other areas.
This trend will continue for several reasons:
1. Client service demands that we exceed, not just meet, client expectations. How can we be an expert and 100% focused on everything?
2. The annual cost of an employee today is enormous when you consider the total compensation package; the risk and the downside can be equally as great.
3. Employers fear the ramifications of hiring the wrong person. How do I fire the individual if they don't work out? What happens if I get sued?
4. Advertising, interviewing, hiring and training are extremely time consuming. How do I find time to do those tasks and meet my clients' needs at the same time?
5. Often times we don't know all of the facets of a particular job - so how can we teach someone how to do it?
6. Law practice continues to become more and more specialized - is our time better spent focused on our specialty?
Even for those Accounting firms that are large enough to have a human resources professional, the "people game" has become a tricky one. We all know employee loyalty is at an all time low. In times gone by, it was customary for a departing employee to provide an employer with two weeks notice when the employee was resigning from a position. Sometimes this happens today and sometimes it doesn't. And, even if an employee gives two weeks notice, it is not enough time to replace that individual and have them provide some training to the new employee to ensure a smooth transition. Did you know the average time to hire a new employee is one month and depending on the complexity of the position, it is generally six months before the new employee is fully functional? When you outsource, you relieve yourself of these problems because the person is not your employee.
Human Resources and Legal Staff
Similarly, accounting firms often have trouble supporting or adequately staffing their human resources function. This often results in less than perfect employee relations, quality problems, and possible exposure to liability.
It is no secret that the opportunities for partnerships are shrinking and that the demands of making partner are increasing exponentially. Similarly, lawyer dissatisfaction continues to rise; many accountants long for fewer billable and marketing hours and more family time.
How do you know when it makes sense to outsource or hire a temporary rather than hire your own employee? Here are some questions to ponder. . .
1. Do you have a task or assignment of a specific duration?
2. Do you have a specific group of tasks (such as some accounting functions) which, if they would be done by an outside party, rather than your employee, would relieve you of administrative tasks and thus free-up your time for client matters?
3. Based on a specific group of tasks, do you feel you need to hire a new employee, but are uncertain of the actual job description at this time? Would it be helpful to develop the job description with a person who has inside knowledge of what the task or series of tasks will entail?
4. Are you tired of dealing with management issues which interfere with your client work?
If you answered "yes" to any of the above questions, your firm could be a candidate for outsourcing or, at a minimum, temporary staffing. While outsourcing is not the answer for every job in an accounting firm, it is increasingly becoming an alternative.
Outsourcing as a Tool to Maximize Accounting Firm Profitability - To learn more about this author, visit Sunil Khullar's Website.
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David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
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