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People and HR: Outsourcing

Outsourcing is the contracting out of certain business functions over an extended period of time.

There are now many firms whose primary business is the handling of outsourced accountancy work from other accountancy practices and business clients. Some are wholly UK operations whilst others send the processing offshore and remain based in the UK to handle client relationships.

What type of work can be outsourced? 

The most common types of work to be outsourced are:

  • sole trader, partnership & limited company accounts
  • personal tax returns
  • Corporation Tax returns
  • book-keeping, sales and purchase ledger

Tips for successful outsourcing

  • Identify the reason for wanting to outsource.  It should be a strategic decision not a rushed or panicked reaction to a workflow or cost crisis.
  • Be proactive and display leadership in handling the transition to outsourcing, as staff may fear job losses and be obstructive in the new outsourcer/outsourcee relationship.
  • When the strategic decision is made you can select your supplier.  This should be among the last things you do.
  • Satisfy yourself on data security.
  • Enquire about the qualifications and training of outsource company’s staff.
  • Talk to clients of the outsourcing company and get their first hand views on quality of work, timeliness of delivery, approachability of staff.
  • Inform your PI insurer.
  • Tell your clients that services provided by your firm will be outsourced to a third party.

Planning for problems

When you plan to outsource tasks, you also need to plan what you will do if any problems arise. Consider having other service providers that you can turn to relatively quickly and how you might take the outsourced processes back in-house, if necessary.

The contract between you and the outsourcing company should set out the circumstances in which you can make changes to the agreement.

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