Outsourcing accountancy services: how to make it work for you

Is outsourcing accountancy the answer for your SME?

As with HR (covered in another article), not all SMEs can afford an in-house accountant/financial specialist, especially in their start-up days. What are the pros and cons of outsourcing this service?

What are the pros?
Perhaps the biggest factor in favour of outsourcing accountancy is that it’s common practice. Finance and accounting was one of the first processes that companies outsourced, and it continues to be one of the main ones.
Large companies tend to use outsourcing to improve far-flung global operations, ensure consistency and so on. But smaller companies increasingly embrace it as well. Outsourcers often now target the SME segment with appropriate services and fees, and have even developed solutions for specific sectors.
If nothing else, this means there’s a substantial and experienced industry out there, ready to help you. It also means it’s a relatively competitive industry, where you can seek value-for-money and find a provider who will not only give you a better service than you could deliver in-house, but also save you money at the same time: the ‘perfect recipe’ for outsourcing.

What are the cons?
A recent Association of Chartered Certified Accountants study found that while companies believe they’ll cut costs through outsourcing, many fear they will lose control.
While this is an understandable concern, the way to overcome it is to realize that you’ll probably have even more control. You will have improved information at your fingertips, and more time and money to plan for growth instead of simply react to events.

What services could I outsource?
The most commonly outsourced services are payroll accounting, accounts payable and accounts receivable. If you’re a fairly new, small or straightforward SME, these services may well suffice. But if you’re growing, or have more complex financial operations, then you might want to consider more strategic functions like budgets, forecasts and internal audits.

The main benefits:

The fundamentals are true of outsourcing any function: it can save you valuable time, reduce operating costs (hiring, training etc), bring you peace of mind and enable you to focus on the core, money-making parts of your business.
In addition, simplified and standardized accountancy processes are a key characteristic of well-run companies. By simplifying their accountancy processes, companies have found they can both reduce the cycle it takes to close books, and also better meet regulatory requirements.
Outsourcers are also likely to have greater expertise and technology resources than you may have in-house. In effect, they’re experts, who use the latest software packages every day.

What do I need to be wary of?
As with outsourcing any service here in the UAE, look for a regional specialist – ideally one who comes with recommendations that you trust. Global firms may not be familiar enough with our specific financial parameters – in particular, the absence of a tax system here may not sit comfortably with their standard approaches and software.


“The opinions expressed within this article are generic. Mashreq is not responsible for the accuracy, completeness, suitability or validity of any information on this article. The information, facts or opinions appearing in this article do not reflect the views of Mashreq. Mashreq does not assume any responsibility or liability for the same.”