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Published 09 May 2012 17:34, Updated 10 May 2012 04:15
The principal of accounting firm Adams Johnston, Michael Adams, has picked up 15 new clients and increased fees by about 30 per cent in the past 12 months.
This may seem like a miracle story in the current economic climate, where accountants are suffering from consumer and corporate caution but Adams attributes his success to outsourcing.
Ever since he began sending low-level work offshore, he has been free to focus on important business. “Instead of being bogged down in mundane work, [I can] get out and meet my clients,” he says.
He uses a company called Back Office Shared Services (BOSS) to help source talent offshore. “I have a designated accountant – a fully qualified chartered accountant in India – who works solely for me,” he says. “I set her up to have access to my server and software and when I have a job for her, I email her.”
Adams is not alone in tapping the power of outsourcing. The director of start-up business Frontline AccountingMark Cottle hired a recruitment firm to help him source a candidate in Manila. “Once we had a short list of candidates, we interviewed them from Melbourne on Skype,” he says. “It cost about $200. You’d struggle to find a recruitment agency in Australia for less than $5000.”
The lower cost of labour is another obvious benefit. “To give you an idea, we can employ seven to eight qualified CPAs in Manila for [the cost of] one qualified CA-CPA in Australia,” he says. “It makes quite a compelling argument for setting up an office overseas, if it can be managed properly.”
Once controversial, offshoring is now just part of business life.
BDO’s Service 2020 report, based on the responses of more than 500 business leaders around the globe, found that more than 46 per cent in the Asia-Pacific region plan to outsource in the next decade, up from just 14 per cent today. And of those that say they will outsource, about 40 per cent plan to go offshore. Other figures confirm the popularity of outsourcing, especially in professional services firms.
A report published by CPA Australia in 2010 cites global figures showing finance and accounting services make up about 10 per cent of the $US975 billion worldwide BPO (business-process outsourcing) market and that the figure is expected to increase.
When CPA surveyed 227 of its members in June 2009, 11.7 per cent said their employer sent some finance and accounting tasks offshore. The most common activities outsourced included those requiring minimal skills such as accounts payable and receivable
Some believe that in future, business will outsource more high-level roles. “It’s becoming more common for business to outsource business services that form part of service delivery, such as software development, website design, data entry and accounting service,” says BDO partner Marc Loftus.
BOSS sales and marketing manager Lee Court believes outsourcing is here to stay. He says firms get most value from outsourcing “when there’s a collaborative approach – having a direct relationship with the accountant you outsource to”.
The head of Proactive Accountants Network, Rob Nixon, promotes the benefits of outsourcing through his coaching network. He says about 20 per cent of the 302 accountants in the network send some services offshore; some even outsource their marketing. “Firms focused on running a business rather than just doing accounting work are always looking for new ways to get work done,” he says.