In January 2024 CPA Australia released a report that showed the number of students completing bachelor-level and above programs in accounting had almost halved in the decade to 2020 to just 2,278 a year. Given the number of Accounting Services businesses in Australia has been reported at 37,428 (as of 2024), and there has been an increase in firms of 2% from 2023, we can expect ongoing increases in firms. The 37,000 firms have been supported by the 128,870 people working within the Australian accounting services industry. With 2,278 graduates being available annually, there is going to be a continued shortage of accountants.
Through to 2024, the Australian accounting compliance area has faced significant challenges, notably a marked shortage of qualified professionals. Articles from Accountants Daily highlight the growing demand for accountants and the exacerbation of this shortage over time. This situation has prompted businesses to explore different offshore accounting outsourcing models.
Offshore accounting outsourcing refers to the practice of delegating accounting tasks to external firms or individuals located in countries other than where the primary business operations are situated. This approach offers several benefits, particularly in the context of the current accountant shortage.
Outsourcing provides access to a global talent pool. With the shortage of accountants becoming more acute, as reported by Accountants Daily, finding qualified professionals domestically has become increasingly challenging. Offshore outsourcing allows businesses to tap into countries with a surplus of skilled and frequently trained accountants, thus easing the pressure of local shortages.
Secondly, cost efficiency is a significant advantage. Generally, the cost of having work completed offshore is lower compared to the expense of employing full-time domestic accountants. This difference in cost does not necessarily equate to a compromise in quality. Many offshore providers possess high qualifications, skilled workers and in-house developed systems especially as outsourcing compliance work overseas is now in its third decade.
Moreover, outsourcing accounting functions can lead to enhanced efficiency and focus on new initiatives, technology and core business activities. By delegating routine accounting tasks to offshore partners, companies can free up internal resources and focus on strategic areas that drive growth and innovation such as AI and Robotic Process Automation. This can be particularly beneficial in a landscape where competition for local resources is fierce and efficiency is paramount.
However, it’s important to approach offshore outsourcing with caution. Selection of an offshore partner should involve full due diligence and include a “what if” worst-case scenario. Concerns such as data security, compliance with local and international accounting standards, and the quality of communication need to be meticulously managed. Selecting the right outsourcing partner-one that aligns with the company’s values, quality expectations, and security requirements-is crucial for a successful outsourcing relationship.
As the accountant shortage continues to pose challenges for Australian accounting businesses, different offshore accounting outsourcing models are emerging as a viable solution to the local resource shortage. The success of this approach hinges on careful partner selection and robust management of the outsourcing relationship. For businesses willing to embrace and engage in different models, offshore outsourcing presents an opportunity to transform challenges into strategic advantages.
For more detailed insights into the accountant shortage and its implications, please refer to the original articles on [Accountants Daily](https://www.accountantsdaily.com.au).
Learn more: Accountants top list of most in-demand jobs
Learn more: The year the accountant shortage got worse
If you are seeking accounting outsourcing advice, then drop Odyssey a line to chat. And don’t hesitate to consult us for any of your concerns.
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