Why outsourcing

It's also slowly becoming a necessity for accounting firms who want to keep growing, because worldwide, the profession is facing a massive talent shortage!

America is experiencing a shortage of CPAs and they have fewer accounting graduates every year.

In Australia, they are faced with an estimated 9,000 accounting vacancies annually and in the UK, almost 50% of accounting firms had to turn down work last year due to a lack of staff.

Professional bodies across the world are working hard to address this shortage, trying to improve the image of the profession and make it more attractive and exciting to young graduates, while businesses attempt to recruit top talent by offering higher salaries and better benefits.

But while these measures might work, they will take time to work and while we wait, accounting firms across the globe are losing money simply because there is no one to hire to get the work done. Except, that there are accountants available for hiring. They just might not be in your country.

There are three ways that an accounting firm can solve a skills-shortage problem:

• Onshoring
• Outsourcing
• Offshoring

Onshoring (offering a job to a foreigner and enticing them to immigrate) is an option, but it is expensive and you would need to be offering an extremely attractive package to convince good talent to move entire countries. You also still run the risk of running out of talent, because moving countries does not appeal to everyone. So, we're going to pay more attention to Outsourcing and Offshoring. Starting with the main difference between the two:

Outsourcing involves leveraging another entity's resources in order to get a job done.
Offshoring involves recruiting your own resources, but they sit in an overseas location.

Outsourcing is a good option when you need a part-time solution and don't have much time to spend on training. Outsourcing works best when you use it to get rid of non-core tasks - administrative or operational tasks that take you away from your core money-making duties. You can outsource money-making tasks as well, but it is best to do this in small bursts - either for adhoc projects or overflow work in busy times.

We have an entire booklet devoted to the subject of Outsourcing - why you should, what you can outsource and how to do it without making a mess of it - if you would like to outsource, you can grab that book here.

However, if you find yourself using an outsourced solution more and more and more, to the point that they are essentially helping you full time - or - you are finding yourself consistently unable to take on new customers due to overload, then it is probably time to hire a full-time employee.

In that case, offshoring is your answer.

Offshoring comes with multiple benefits for your accounting firm:

• Increased resource availability and access to a much wider talent pool
• Growth becomes possible again, and easier to manage
• Reduced risk and regulation when compared to hiring locally
• It costs less than hiring (you don't pay for office space, furniture, coffee or any other physical employee benefits!)

There are, of course, some disadvantages as well. You could battle with time zone differences and cultural differences and you may have to make allowances for foreign laws and administration policies. But, these disadvantages can be dealt with, and a good offshoring solution provider (nudge-nudge, wink-wink) will make these issues their problem, not yours.