Outsourcing delivers double-digit growth

ADDED VALUE: Matthew Grant, partner and head of accounts and business advisory for Azets in Yorkshire, says that technology and a skills shortage has driven the demand for outsourcing.

Demand for outsourced services has increased by 20% at UK top 10 accountancy and business advisory firm Azets in Yorkshire.

It has recorded the year-on-year revenue growth with a series of significant five-figure instructions from medium to large owner-managed businesses across the region.

The firm’s Accountancy and Business Advisory (ABAS) team says the traditional image of bookkeepers and accountants no longer holds true as more firms turn to highly qualified professionals for advice.

They have also traced the rising demand to the acceleration of accounting technology along with a skills shortages and talent crunch in the industry.

Azets has three offices in Yorkshire – in Leeds, Bradford and York – where it employs 334 people.

Matthew Grant, partner and head of accounts and business advisory for Yorkshire, said: “The landscape has changed massively in outsourcing for accountancy and business advice.

“Traditionally, the image of a bookkeeper may have been someone who worked for a micro business processing invoices because the owner did not have the time to do it themselves but the role and value of outsourcing has changed dramatically.

“There has been a considerable rise, 20% year on year in Yorkshire for Azets, in outsourcing, due to the availability of technology and a shortage of qualified and experienced accountants.”

Ant Hamilton, a director in the digital accounting team based in Leeds, said: “Many clients are now at the point where they want some financial independence.

“They may be leaning on a great deal of short to medium term debt and looking at options of how to be less reliant on this, become cashflow positive, run profitably and grow.”

ABAS outsourcing – or finance function substitution – covers a range of services from managing a company’s finance emails and communications, payroll, payment runs and annual compliance to management accounts, VAT, credit control, cash flow forecasting and business advice, including succession planning.

It offers stability and scalability, can cut business costs, reduce recruitment needs and allow directors and owners to spend their time more effectively on running and growing their businesses.

Money saved from reduced costs in National Insurance, pension contributions, office space, IT equipment and licensing can then be used to improve working capital or fund investment in the business.

Ant, pictured left, said: “Outsourcing reduces the risk of relying on key internal individuals when these people are absent on leave or busy with other projects.

“Being reliant on a small internal finance team can also mean resources and knowledge are limited while having access to a wide range of outsourced and specialist expertise can make it easier to scale a business without the burden of having to recruit the talent needed to drive the business.

“Outsourced accountants will keep up to date with the latest rules and regulations, which avoids the need for expensive training to update inhouse accounts teams with all of the technical updates and CPD required.”

Matthew added: “Traditionally some accountants would contact their clients perhaps once a quarter or annually but with new technology and live data feeds we can have far more frequent touch points.

“Our technology provides  us with a link to client data within seconds on our desks in the office rather than needing to schedule an appointment to visit someone’s premises.

“It also allows bank reconciliations daily. So, a director may be on the train and can use their phone to see real time data for their profit and loss account and other financials.

“Directors and business owners are empowered to make decisions much more quickly, but the value also lies in our ability to help them understand the figures.

“For example, the data and graphical tools can be used to show that if they put their sales prices up by one per cent, it will have ’X’ effect on profits or cash flow. It’s there in black and white for them to see what impact their decisions will have on their business.”

Azets – which uses Xero as its core platform – advises businesses on the best finance systems and software that will streamline and automate processes to save time and money.

Ant said: “Accountancy is becoming more tech enabled, which brings many advantages for those who harness its potential, but every business is different with varying requirements.

“Flexibility of service level and an expert eye is key, along with the value provided in advice and specialisms which an outsourcing specialist can offer.

“There are a number of smaller boutique firms that utilise the technology but lack experience or wider depth of services, such as tax and corporate finance, which is where Azets excels.”

One business to benefit from outsourcing is Leeds-based Vantage Spaces Global, a family-owned business which provides living or replica planting for the interior and exterior of workplaces.

Robin Edwards, managing director, said that Azets had resolved issues created by previous outsourced accountants and “consistently delivered quality solutions and data”.

He added: “We feel assured that Azets will continue to genuinely care for our requirements and most importantly will be there when we need them. The relationship can only get stronger as we plan ahead for the future together.”

The Institute of Chartered Accountants in England and Wales (ICAEW) and the Association of Chartered Certified Accountants (ACCA) have warned of shortages in the profession.

ACCA’s Global Talent Trends Report 2024 stated that half of professional accountants expected to leave their employer for their next career move.

A Financial Professionals Index (FPI) report of 2023 highlighted by the ICAEW found a lack of candidates searching for job vacancies in the UK’s top 20 cities with Manchester and Nottingham the worst followed by Liverpool, Leeds, Brighton and Sheffield.

Matthew said: “It is a profession-wide problem. An interesting article on the ICAEW website recently reported that there is a shortage globally as people retire or leave and fewer new accountants come into the profession.”

Ant added: “Over Covid a lot of people had time to reflect on their careers and many may have decided to set up on their own or do something else completely.

“That has left a shortage of people at businesses internally and a lack of people to jump into those roles which is why businesses are leaning more on outsourcing.”

Azets’ latest business barometer showed that nearly a third (30%) of UK companies recognised the importance of succession planning’s importance.