2020 was quite the year for the UK?s accounting industry. The pandemic was excruciatingly challenging for this sector and managed to make several small-scale accounting firms temporarily lose their focus. As we venture into 2021, it?s time for accountants to reflect and find new ways to sustain their firms? future in this post-pandemic era.
What Changed?
2020 changed a lot of things for the UK?s accounting industry. The average accountant isn?t someone who just creates financial reports or crunches numbers for hours anymore. There?s an industrial shift, and customers expect their accountants to offer more guidance and informational support.
Shifting marketing demands, impending regulations (Brexit in particular), changes in average ages accounting firm clients, high demand for investment advice, etc. ? these are all factors that have contributed to the transformation of client demands in 2020.
Hence, accountants in the UK can?t afford to think in terms of day to day responsibilities anymore. The need to see the bigger picture and implement strategic practices that secure their firms? long-term future.
How Can Outsourcing Help?
Unlike professionals from other industry, financial experts view change positively. Industrial changes, in particular, give them the opportunity to adapt faster and enjoy ?first-mover advantages.? Unfortunately, most small-scale accountancy firm owners are simply not in the position to jump on this bandwagon of change.
Even if they can spot opportunities earlier than even the large-scale accounting firms, skill shortages and super-high recruitment costs prevent them from capitalising on new market opportunities.
However, that?s not the case for small-scale accounting firms who have partnered with the top outsourcing companies in UK. Their outsourcing partners have come to the rescue, taken on time-consuming accounting responsibilities (e.g., payroll management, bookkeeping, etc.), and allowed firm leaders to shift their attention.
In the past, if an accounting firm wanted to take on more adversarial work or implement some other form of change in the ways they operate, they had to hire a lot of workers, train them, hope they would succeed, and repeat the process multiple times. Those were the only ways they could move fast and make the most of new market opportunities.
Due to the rush of unexpected changes in 2020, it?s become impossible for accounting firms, especially the ones operating on tight budgets, to stick to traditional methods and practices. Outsourcing offers an alternative solution that?s cost-effective and future-oriented. Here?s how offshore accounting teams are helping the UK?s accounting firms shift their focus in 2021 –
Shifting the Focus to Client Retention
Most accounting firms are far too busy creating annual reports or cracking the latest tax regulations to prioritise client retention. That?s a huge mistake. A recent study of the global financial services sector by Frederick Reichheld from Bain & Company revealed that just a 5% increase in customer retention could lead to 25% increases in profit.
This applies to all types of financial service providers, including accounting firms. Of course, not every client will be long-lasting. That?s why it?s all the more important for accounting firms to focus on clients that hold the most long-term potential and invest in relationship-building practices with them.
Client retention is a challenge that accounting firms in the UK have been struggling with for decades as there?s an abundance of competitors in the market. So, to become the ?go-to? accountant for a large number of clients, accounting firms need to focus on building customised service plans. That?s only possible if you have a dedicated offshore accounting team handling your day to day accounting responsibilities!
Taking on Advisory Roles
If outsourcing partners can handle time-consuming and low-margin tasks like bookkeeping, payroll management, calculating tax returns for clients, etc., the in-house staff members of accounting firms can focus on more high-value jobs like advising clients.
AI-powered accounting tools are already helping accountants step away from their number-crunching responsibilities. However, only large-scale accounting firms in the UK have access to these advanced tools. Partnering with offshore accounting teams can help the UK?s small-scale accounting firms catch up and focus more on strategic roles.
Cloud Accounting
A recent McKinsey report suggests that almost 50% of accounting jobs can be automated if accounting firms leverage the latest technologies. Several accounting outsourcing experts are earlier to this party even than some of the UK?s leading firms.
Offshore accounting services have always depended on technological tools for survival. Without the internet, it wouldn?t be possible for accountants from other parts of the world to sell their services to Western nations. Since some of these accounting teams have always had to be technologically literate to survive, their abilities to leverage technology and gain competitive edges are far superior to what small-scale accounting firms in the UK possess. Hence, partnering with offshore accounting teams can finally help these firms embrace automated accounting processes and use tools like QuickBooks, Sage, Xero, etc., to optimise their accounting processes.
The best offshore accounting teams also create private cloud accounting systems and employ the best data security tools. They receive and share real-time analytical data and create comprehensive financial reports for their partners in the UK. Their technological expertise can help small-scale accounting firms in the UK shift their focus to tech-driven accounting in 2021!
