The finance and accounting outsourcing (FAO) sector is a prominent global industry, with many UK accountants turning to India for professional audit support services due to the benefits of outsourcing. Small and medium-sized accountancy firms, which often face capacity and financial challenges, can particularly benefit from outsourcing.
The primary advantage of outsourcing is cost savings, as evidenced by studies and reports on UK accounting outsourcing trends. By outsourcing audit support and preparation services, accountants can reduce costs and boost profits in the long run. However, UK accountants often wonder about the cost of outsourcing such services.
To understand outsourcing pricing, it is necessary to identify the factors that significantly affect it. The UK auditing market’s opening doors to smaller players have led to increased outsourcing, and India has become a preferred outsourcing destination.
WHAT DETERMINES THE COST OF AUDIT SUPPORT SERVICES?
When pricing their services, outsourcing companies take into account several factors. Some of them are listed below.
Nature and duration of an audit
When considering outsourcing your financial audit, the complexity and duration of the audit are essential factors that influence the pricing. If your audit involves multiple transactions, requires extensive analysis, and is expected to take longer, the outsourcing company will charge you accordingly. On the other hand, standard rates apply to external audits that are relatively simpler and require less time and effort to complete.
The nature of your clients’ financial audit can also determine the number of resources you need to outsource. If your audit requires a full-fledged outsourced auditing team, your outsourcing partner may offer a discount on per-resource costs. For instance, if you need to outsource a significant portion of your audit work, such as data entry, bookkeeping, or reconciliation, your outsourcing partner may offer a more cost-effective solution than if you only need a few resources to assist with a small portion of the audit.
Engagement model
Choosing the right engagement model is critical when outsourcing professional audit support services. The nature and duration of the audit are factors that help accountants select a suitable model. Top accounting audit support companies provide multiple engagement models to clients based on their needs, such as offshore and onshore models.
The engagement model significantly affects the pricing of professional audit support services in the UK. Offshore models typically offer cost savings due to lower labor costs in outsourcing destinations like India. Onshore models, which employ local resources, provide advantages such as proximity, better communication, and cultural familiarity. The choice between these models depends on the audit’s complexity, the level of involvement required, and the accountant’s preference.
Top outsourcing companies offer various engagement models that cater to different client needs. Some models include dedicated team models, time and material models, and project-based models. The dedicated team model provides a dedicated team of outsourced resources to work exclusively on the client’s audit. Time and material models involve paying for the actual time and materials used for the audit. The project-based model is ideal for one-time or short-term audits that require specific resources.
Candidate experience
Candidate experience is a factor that affects the pricing of audit support services in the UK. The outsourcing firm adjusts pricing based on the overall experience of the candidates shortlisted by the accountant. If the accountant prefers to hire highly experienced auditors with technical proficiency, the outsourcing firm may charge more. Conversely, if the accountant prefers less experienced resources, the outsourcing firm may offer a lower price. It’s important to select the right resources as the candidate’s experience impacts the quality and accuracy of the audit. The outsourcing firm offers a range of candidates with varying experience, and the cost of each candidate varies accordingly.
Outsourcing company
The ultimate cost of outsourcing your accounting audit process is largely dependent on the outsourcing firm you select. The more experience and credibility the firm has in the industry, the higher the cost of their services. While a newer and smaller firm may offer lower pricing for the same services, it is important for accountants to consider factors such as the firm’s reputation when making outsourcing decisions. A company that has served numerous clients over the years possesses a better understanding of the market and can provide high-quality services.
In addition to these considerations, there are other factors that impact the final pricing of audit support services. As each client’s requirements and expectations for outsourcing differ, audit support providers adjust their prices accordingly.
OUTSOURCING AUDIT SUPPORT SERVICES TO Pakistan
Owing to its cost benefit, a large number of accountancy practices in the UK prefer to outsource professional accounting and audit support services to Pakistan. While outsourcing to Pakistan offers firms a range of benefits, competitive accountant salaries and readily available talent are the most significant advantages.
Let’s take a quick look at the cost of hiring a full-time auditor in the UK versus outsourcing professional accounting audit support to Pakistan.
In the UK, the average salary of a full-time auditor is estimated at £42,365/year (Source: Glassdoor). In addition to the salary, accounting firms bear onboarding and training costs, operational expenses, administrative expenses, payroll processing and performance appraisal, leave and absence costs, etc., per employee. The cost of hiring an in-house financial auditor in the UK thus elevates beyond £50,000/year.
On the other hand, outsourcing audit support to Pakistan offers accountants a distinct pricing advantage. The average cost of hiring a full-time outsourced auditor in Pakistan ranges between £20,000/year to £35,000/year. If you plan to hire an outsourced accounting audit support professional on an ad-hoc basis, it will cost you between £20 to £40 per hour.
This is the final cost of outsourcing as accountants need not spend extra on onboarding and training, leaves and employee benefits, administration and payroll, etc.
The above figures show the significant cost difference between hiring a full-time in-house and outsourced audit professional. Besides, outsourcing audit support services in Pakistan gives accountants access to a vast talent pool with updated knowledge, technical expertise, and language skills.
ONSHORE SUPPORT IN OUTSOURCING
Some accountants are keen on outsourced staff working from their office instead of virtually for better communication and productivity. To satiate this requirement, top outsourcing firms like Fin-eX Outsourcing provide the onshore support model.
Within the onshore support model, an outsourcing firm deploys at least one resource to work from the client’s onshore workplace. This resource acts as a team leader, coordinating and managing the activities of the offshore team and serving as a single point of contact between them and the client.
The onshore support model offers several advantages to accountants, making the process of outsourcing audit support services simpler and hassle-free. With Fin-eX Outsourcing onshore support model, accountants can benefit from improved communication, greater control over the outsourcing process, and increased productivity.
CONCLUDING THOUGHTS
If you’re struggling with capacity issues and seeking cost-effective solutions for your accounting firm, outsourcing is the ideal choice. By outsourcing audit support and preparation services to offshore destinations like Pakistan, accountants can reduce overhead costs and save on auditor salaries.
Leading audit outsourcing firms in the UK offer various engagement models for accountants to select from. To determine the most suitable model for your firm, it’s crucial to analyse your business goals and requirements thoroughly.
Moreover, when selecting an audit support services company, accountants must consider multiple factors beyond costs. Opting for a reputable accounting and auditing outsourcing firm like Fin-eX Outsourcing can help address talent shortages effectively and enhance profits for your business.
To know more about outsourcing professional audit support with Fin-eX Outsourcing, you can contact us at +44 208-146-0808 or email us at info@finexoutsourcing.com.
