Accounting services are now one of the most in-demand outsourcing services in the United Kingdom, and their demand will continue to rise in 2024. This trend has grown way beyond the conventional paradigm of cost savings and has assumed a new role of being at the hub of the sophisticated strategy of financial management, leveraging worldwide talent, advanced technologies, and strategic expertise.
Businesses of all sizes are beginning to recognise that finance services outsourcing is not a pure operational decision. Rather this is a strategic tool for accessing specialised skills, state-of-the-art technologies, and flexible financial solutions.
The Growing Trend of Outsourcing in the UK
The outsourcing trend has really taken off, especially since the pandemic hit. All types and sizes of businesses are realising that they don’t have to do everything themselves anymore. A whopping 48% of UK companies are now outsourcing some of their work, a 41% jump since COVID-19 turned our world upside down. And it certainly is not just a few businesses doing this – according to the experts, a massive 70% of B2B decision-makers have embraced outsourcing for at least one part of their operations.
Accounting: A Key Player in the Outsourcing Arena
IT support is the clear leader in outsourcing. 34% of UK businesses outsourcing their IT support function. However, the finance services outsourcing is not far behind. In fact:
- 24% of UK businesses outsource their accounting functions
- This puts accounting on par with printing services in terms of outsourcing popularity
Financial Implications and Market Size
The financial commitment to outsourcing in the UK is substantial:
- UK businesses allocated a staggering £500 billion to outsourcing in 2022
- Global outsourcing spending is projected to reach £571 billion by the end of 2023
Small Businesses Leading the Charge
Interestingly, small businesses are at the forefront of this trend:
- 37% of small businesses outsource financial functions
- This is significantly higher than the 12% of large businesses doing the same
The Accountant’s Perspective
There is, however, still a great deal of reluctance within the accounting community regarding this growing trend: 34% of accountants in the UK remain skeptical about outsourcing.
The most important issues are the professional standards and quality. However, an increasing number of accountants consider that there are potential benefits including:
- Better balance between work and life
- Increased capacity for business advisory services and more time for valuable client work
Looking Ahead
The trend for accounting outsourcing companies will not be going away anytime soon. Both startups and established companies need affordable, flexible services to manage their complex administrative burdens. This also brings challenges and opportunities for accounting firms and professionals.
It allows UK accounting firms to do what they do best — deliver great service and expertise — while getting rid of what wastes their valuable time, in turn helping them to improve service to their clients — a strategic move. Nonetheless, outsourcing is a slippery slope that needs to be approached with caution — in order to maintain quality and to keep the clients’ needs as a priority.
Rapid technological breakthroughs, new regulations, and growing corporate needs are all influencing the accounting landscape. Making wise business judgements in the accounting industry requires keeping up with these trends. Accountants must adjust to new tools and procedures, such automation and artificial intelligence, as technology continues to transform businesses in order to improve efficiency and streamline operations.
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