We have recently been analysing the business inquiries we have received over the last few years from accounting firms across the country. Without a doubt, one of the questions we get asked all the time is: ‘How much do your outsourcing services cost’?
In this blog, we will cover:
How outsourcing companies price their services
Today outsourcing companies offer a variety of pricing models, each of which has its pros and cons. To help you evaluate and determine the best pricing model for your accounting firm, consider these pricing models offered by outsourcing companies:
1. Ad hoc / Pay as you go model
Some accountants really like this model. As the name suggests, the ad-hoc model is when an outsourcing company provides resources for the time you require for a set price.
Typically, the outsourcing company determines an hourly rate, ranging from £10/hour to £18/hour for accounts, and £8/hour to £16/hour for bookkeeping. Sometimes hourly rates of specific employees differ based on seniority.
2. Full-time employee (FTE) or Dedicated resource model
Though QXAS offers all three engagement models, this one is the most popular. A full-time employee (FTE) is when an outsourcing company provides a dedicated employee at a fixed fee per month.
This typically ranges from £1000/month to £1800/month for a senior accountant with 2 years’ experience. The fixed amount is billed to the accounting practice at the end of each month. Under this model, the outsourcing company scopes the number of hours to be completed within the monthly fee.
3. Block-of Hours model
Similar to the Ad-hoc model, but here you can buy a pre-paid block of hours (300,500, 600, 900, 1200 hours, etc). As hours are used they are deducted from the total number purchased.
The true cost of hiring accountants in-house.
One of the biggest indicators of a growing accountancy practice is the hiring of employees. But when you hire an employee, you have wages to pay every month. As you keep hiring more employees, you could easily make the mistake of thinking that monthly salaries are the only expense you will bear. Hiring staff in-house is expensive. Aside from the salary, you could also be on the hook for:
Can it work for your accounting firm?
By outsourcing accounting services, you can minimise and even eliminate most of the employee-related costs mentioned above. When you reduce these costs it allows you to not only save money but also gives you the time and resources to grow your practice.
All businesses are looking for a way to maximise their returns. This can be accomplished by a number of methods and outsourcing is definitely one of them. If you are considering outsourcing and are not sure if it’s right for you why not get in touch with us for a free trial.
My name is Vishal Kurani, the author of the QXAS blog and I appreciate you stopping by! I help accountants gain Accounts Outsourcing knowledge through my easy to follow blogs and guides. Download my free guide "The Accountants Guide to Making Payroll Profitable" to learn how to make payroll profitable for your accountancy practice.