Dec 2017

An Australian Accounting perspective on Outsourcing

An Australian Accounting perspective on Outsourcing

By: Odyssey Outsourcing
Tags: graduates, Management Accounting, Outsourcing

As outsourcing gains momentum in Australian accounting firms, there still continues to be a dearth of independent research on the use and success of outsourcing. Of particular concern is the scarcity of research into human resource issues through outsourcing.

This is compounded by the complexity of the different models of outsourcing domestically and offshore, along with different ownership models adopted by accounting firms.

One of the direct issues is the impact offshoring/outsourcing has on the recruitment and development of domestic graduates in Australian accounting firms, and the impact this will have on middle managers in the future.

There are many factors impacting the future of Australian accounting including globalization, automation, cloud and the move to outsourcing offshore.

As noted in this paper, the Big 4 now have a presence in key offshoring locations in India. Deloitte’s staff in India now total 27,000 with 800 servicing Deloitte Australia and another 12,000 staff being hired in the coming year to service Deloitte internationally

Work now being pushed overseas includes:

  • Preparation of financial statements and tax returns
  • Specialist tax advice
  • SMSF audits and financial statement preparation
  • Bookkeeping services and management accounting
  • Audit testing
  • Payroll and fixed asset accounting
  • Business activity statements
  • Debtor collection

Many of the above activities are considered to be core activities of some accounting firms.

Indeed as outsourcing providers mature, we are seeing a move from compliance into more “pro-active” areas such as ongoing management accounting, with the offshore provider being continually exposed to more activities outside traditional compliance work.

The Critical success factors for outsourcing can be easily broken down into:

  1. People related factors
  2. Skills related factors
  3. Process related factors

As outsourcing continues to gain momentum in Australia, graduates will be challenged to value add at a much earlier level. They will have client facing roles at an earlier time in their career, and will need a different set of skills to work in a firm of the future.

However, whilst the challenges will be keenly felt by the graduates, the real pressure is going to be on the Australian educational institutions to provide the necessary skills for the work requirements, but ultimately Australian accounting business owners are going to have to adopt quickly to new business models.

Share this article