From XU Magazine, 
Issue 18

Question time

To start the new year we’ve put together a comprehensive guide to how you should approach outsourcing. From ‘what can I outsource?’, through to the key questions you should ask of your own practice’s strategy and operations. AdvanceTrack founder and MD Vipul Sheth fields the questions from Kevin Reed.

Q: What is the ‘starting point’?

A: While outsourcing as a concept is well understood, practices can struggle to align that concept with the running of the business. Unless you see outsourcing as strategic part of delivery for your firm, it won’t work.

For example, do you understand how you’re utilising your current staff and that outsourcing could create great (and positive) change to them?

Ultimately, do you want your people and practice processing data? I think that, instead, you will make more money spending time sat in front of clients. Using an outsourced service can help you spend more quality time with clients. You will bill much more per hour and make you a proactive adviser in the eyes of your clients. Your staff will be involved in those client-facing conversations and earn more money for you. As a result, their own value increases and you will have more satisfied and better-paid staff. All equalling happier clients.

Q: What can a practice outsource? What are the most popular or standard types of outsourcing that take place, and how is that evolving?

A: In principle, any task where someone is sat at a computer and undertaking it manually has the potential to be outsourced. From tax work to bookkeeping and accounts production, however what is unlikely to be outsourced is the conversation piece with the client, unless there are some basic forms of administrative-focused communication. Broadly I think of work done by staff sat at a computer with a consistent, repetitive process can normally be replicated by an outsourcer.

What tends to be outsourced early on, with relatively low risk, include year-end accounts – a popular choice. You have nine months to file a set of accounts so there’s ample time to check without the client requiring visibility during that process. The information is not being changed live as it would be with bookkeeping. It sits in its own silo.

As for evolution, well, the biggest change happening is the need for real-time data. As a result of which, areas like bookkeeping in the Cloud are increasingly being demanded by the end-client. So, if they want real-time bookkeeping, how do you deliver that at scale?

And that’s where we come in, helping to systemise in order to scale that service upward.

In AdvanceTrack’s recent webinar with ReceiptBank, the focus is on scalability of accounting and bookkeeping services- but it’s really about systemising clients’ recording. The next step is collecting sales information and invoicing, bank information and then sales data coming in from the client. Clients could, of course, for example, link their online store to your accounting technology. Once their information is processed in a consistent and quick way you are moving to real-time information. So, what you achieve as a result for government filings is you just need to press a button built into compliant software, such as Xero.

Q: What types of practice outsource, and why? Do certain types of practice outsource certain types of process?

A: It is not really about size, it is about attitude. Big firms would do it more because of their scale, but because of their size it means a lot of buy-in is required from a range of people. It can be done by them but requires a much more involved process.

When I meet the whole partnership they’ll have gone through the whole ‘why?’ journey; any change project requires leadership and sponsorship. And it can also fail with small firms, if someone in the chain does not go along with the plan.

Q: How long can it take to get a process or function outsourced? Why does it take that long – or short – a time?

A: I could say ‘how long is a piece of string?’, but it can be fairly quick, relatively speaking. Again, it depends on both attitude and the will to harness technology. If a group of people understand tech and are prepared to standardise (which will require change in an organisation), then it will happen.

One of our most successful clients used outsourcing to standardise their working files. Instead of a different approach by client, office or partner – they said ‘this is how we produce a file to support accounts’. So, when that data comes to us it means that we know exactly how it has to be prepared.

Q: How does the arrangement work between outsourcer and practice? What is the process and how secure is it?

A: For bookkeeping, we can work with Cloud tools that are collecting client data and we sort it, then push it into accounting software, such as Xero and make sure it is fully reconciled. An accounting firm might have someone continue doing this, but instead of looking after ten clients that person can now manage say 50 clients. Their work will also change – it will not be about processing but their time will be reviewing the outputs (while understanding how it is put together) and work at greater scale with their end-clients. This also frees them up to speak to clients.

Once the initial work’s done, some firms get us involved in undertaking management accounts and reporting on behalf of their clients. It requires skill to understand what you’re doing and how you’re doing it, but it can be saystemised as well as enable you to speak to your clients in a consistent manner.

As a firm you can move to a subscription-type service and start having great conversations with clients. You are not reporting history.

On security, some of our industry believe that just because the outsourcing staff log into a firm’s network, they think there are no other GDPR or data protection requirements; we have lots of protocols required to keep client data secure. You cannot just say ‘we are working on your servers in London, Sydney, New York or elsewhere’, there is a separate requirement to undertake impact assessments around how that data’s being accessed.

Then, beyond that, the protocols must be secure. We can work on a firm’s network, where firms have their own IT staff, to do work to ensure data accessed by our team members is locked down and things cannot be abused.

A smaller practice might not have access to their own IT teams or complex infrastructure, and might want to use email to transfer data – but that is not overly secure. Or, take a secure space through which to funnel information – which is, of course, what we do when required. We do not use email.

Q: What are the key and process perspective that outsourcing can bring?

A: This may sound odd, but even in ‘year one’ of the project (once you are factoring in internal time) you are probably looking at break-even from a pure cost perspective.

But I would say that, longer-term, what you can achieve is more client-facing time, and as a result client firms bill significantly more, driving higher profitability.

They have changed the type of person they recruit, not someone to man an engine room but comfortable sitting in front of clients, and talking sensibly and confidently about that business. They are not having to talk to clients’ FD about deadlines and accessing information. And it is a totally scalable process.

Q: What else should my practice consider?

A: When I sit down with practitioners I say: you need to have a standard workflow, so whatever is sent to us by whomever it looks pretty much the same every time, while appreciating or understanding where there will be exceptions. Get standardised yourself and then expect that level of process rigour from the outsourcer.


  1. What experience do you have in the outsourcing space? What credentials does the outsourcer have in place, and are they interested in how your practice operates? Try and speak to existing clients. This is all crucial as it will impact directly on your working relationship.
  2. Do you also run an accounting firm? It is not unknown for some outsourcers to also provide their services directly to what would be considered end-clients. Therefore, are they actually competing with you and, if so, are you comfortable with that?
  3. What credentials do you have that give me satisfaction that you are trustworthy and reliable? Accreditations should be asked of the outsourcer. What are their processes and general approach to security and reliability? Where are their operations based, and can they be visited?


  1. Do you want to grow your business? Simply hiring more staff is a way to help you grow, but getting staff competent at processing complex accounting and tax data means they’re sought after. It is also difficult to improve margins. Lastly, will this approach work when attempting to provide more data to tax authorities more regularly, and will clients start asking for better and more timely services?
  2. Do you want yourself and staff to be more client-facing? If you are looking to evolve your offering, then your staff will be vital in achieving your goal. Freeing them from processing provides an opportunity for them to help your practice evolve.
  3. Do you want to make more money? Improving margins and profitability requires you to improve your processes.

Why leave it there?

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