A lot of accountants in practice look to outsourcing tax work come January, because of the challenges of overwork and staffing. Others, however fear that they could lose control over their tax and compliance work if they outsource.
Like most things in life, there is no general response to the question of outsourcing. You will need to analyse your practice and the way your accounting is done to make a smart decision.
If it is something you are just beginning to consider, ask yourself these five questions.
1. How manageable is my accounting team’s workload?
If your in-house staff spent a considerable time doing tax work last year, look to see if they will be overworked come January. To know for sure, just come right out and ask them. If you find that they are indeed burning out during peak seasons, consider outsourcing the overflow work.
This way, your accountants will stay in control of your tax and compliance functions, while getting relief from the burdensome workload.
2. Does my practice lack the software I need?
If the answer to this question is ‘yes’ you are not alone. Many accountants, especially start-up accountants, don’t own tax return software.
If your accountancy practice wants to process a large number of returns, but doesn’t have the financial wherewithal to invest in software, consider outsourcing to a company that does.
3. Can outsourcing improve my practice’s fee stagnation?
Are you less than thrilled with your current fee revenue? Research has found that the lack of capacity to provide more for existing clients (or take on additional clients) is a main challenge in growing fee revenue.
If you are facing the same problem in your firm, consider outsourcing; this way your team can focus on identifying and delivering some of the more lucrative services your clients want from you.
4. Am I able to find the staff easily?
There is nothing wrong with an accountancy practice using outsourcing if it has lost a key member of staff and has trouble finding new ones. In fact, outsourcing at such a juncture is a smart business move.
So if you want to get as much done as possible during peak season, seeking external help will be a smart business move.
5. What’s best for my bottom line?
If you keep all your tax and accounting remains in-house, are you compromising the focus on your practice’s core competency? Will your practice’s bottom-line go up if some of your accountants focused on higher-value work? If the answer is yes, consider outsourcing.
There you have it. Five questions to help you determine if you should outsource your tax work, and take back control of the upcoming January rush. Your next task would be to choose an outsourcing company that's right for you. Here are the top 7 questions to ask yourself for the task. The key is to understand your practice’s needs and deficiencies. By carefully evaluating your needs, you are sure to set up yourself for outsourcing success.
FREE DOWNLOAD: Self-assessment tax return checklist to share with your clients