How Are Top Accounting Outsourcing Firms Helping the UK's Accountancy Industry During the Pandemic
 |
Despite the hazardous situation of the UK's economy, local accounting firms have continued
to hire employees for one reason – they have no other choice. Small-scale
accountancy firms in the UK are service providers, and the demand for
high-quality accountancy services has rocketed during the pandemic. Clients are
looking for financial advice and support during these uncertain times.
Unfortunately, many firms have to say,
'we'd love to help, but we don't have qualified accountants at the
moment.'
Small-scale
accountancy firms' open-door recruiting policies haven't worked at all.
Small-scale accountancy firms in the UK are finding it increasingly tough to
attract high-caliber accountancy experts. As it is, they were having trouble
attracting qualified accountancy experts given that the country's major
accountancy firms are hell-bent on consolidating power.
The sheer the number of client inquiries regarding the unprecedented market shock brought
about by the COVID-19 pandemic is taking a toll on these firms. As a result,
many accountancy firms have to hire
professionals with little or no background in finance or accounting. London,
one of the hotbeds of the virus outbreak, is experiencing a strange phenomenon.
The number of professional vacancies in the city has increased rapidly. Most of
these job offers pay over £40k. In October 2020, Deloitte and EY, two of
the country's largest accountancy firms, posted 122 and 144 jobs respectively.
There was a total of 752 vacancies in London's accounting sector in
October.
Understanding the UK's Accountancy Crisis
In 2019,
over five-hundred small-scale accounting firms closed shop. The inability to
attract and retain high-quality accountants was a major factor behind these
small-scale accounting firms’ failure. Despite
being in the middle of a technological revolution, small-scale accounting firms
in the UK have been unable to scale up using opportunities like Open Banking or
technologies like cloud accounting because they're understaffed.
The Office
for National Statistics looked into employee shortages in UK's accounting
industry. They discovered that employee retention rates in the UK's small-scale
accounting firms were very poor. The accountants who retained their role in
2019 were rewarded with 5.2% increases in their wages.
On average, a full-time salaried accountant earns £36,611! That's more than
what most small-scale accounting firms in the UK can afford.
In short,
the crisis experienced by small-scale accounting firms can be explained in
these five points -
·
With salary demands ramping up, it's
extremely challenging for small-scale accounting firms to retain their finance
teams. A bigger firm will likely offer 5-10% salary incentives to snatch these
high-calibre professionals.
·
To meet work demands, small-scale accounting
firms are having to adopt open-door recruitment policies. These lacklustre
recruitment policies attract underqualified or low-quality accounting
professionals.
·
Unskilled accounting professionals require a
lot of training. Small-scale accounting firms have to spend a
lot of their minuscule budgets on training their underqualified staff members.
·
Despite training, most underqualified accountants
aren't able to cope with large workloads. They're either given more time to
become better or laid off.
·
The overall output of small-scale accounting
firms drops drastically due to these factors. They become perfect victims for
larger firms who want to buy out their businesses.
Accounting Outsourcing Firms – The Last Hope
Have all
accounting firms in the UK suffered because of the pandemic? No. Quite
contrastingly, many large-scale accounting firms in the country are
experiencing higher demands, and they're delivering on their promises. The only
difference is that these firms have partnered with the world's top accounting outsourcing firms. They
essentially operate two teams – the in-house accountants in the UK and an
offshore team consisting of accountancy experts from across the world. These
offshore accountancy experts help these firms -
·
Generate more profits. Firms can take on more tasks as their offshore partners handle regular
accountancy tasks such as creating yearly reports, tax reporting, payroll
management, etc.
·
Reduce overhead costs as the cost of
training, pension, bonuses, sick leaves, paid leaves, etc., is zero. Offshore
accountants work on an hourly basis. Large-scale accounting firms have leverage
in this partnership. They pay limited amounts for high-quality work. If they
don't like the output, they can terminate the partnership on the spot (no
severance pays involved).
·
Maximize efficiency. Most large-scale
accounting firms have been in partnership with these offshore accounting
experts for many years. During this period, they've honed a system of managing
day to day responsibilities of the firm. As the offshore experts manage the
accounts of the firms' clients, in-house workers offer face to face financial
consultancy. The two teams work together to improve their firms' service
delivery capabilities.
These
offshore experts use the latest accounting software and cloud service tools to
offer efficient and timely accounting services from remote locations. They
charge less than half of what an in-house accountant from the UK charges.
Small-scale accounting firms must replicate this ingenious model to make the
most of the increased demand for accounting services in the post-pandemic UK.