5 Innovations in Business Process Outsourcing (and What They Mean for Accountants)
You take part in business process outsourcing (BPO) if you contract out any of your non-primary business functions to third parties. Traditional BPO services have, for many years, included finance and accounting. Rapid changes in technology are expanding BPO functions. Here’s what accountants need to know about them and why.
End of Offshoring
Offshore call centers used to be the bane of U.S. consumers, but a boon for U.S. companies wanting to take advantage of inexpensive labor. The current administration is expected to have an effect on trade agreements and regulation of offshoring. This new political climate, coupled with the rise of self-service tools and intelligent virtual assistants, may mean more BPO functions are returning to U.S. soil and onshore delivery centers.
A decade ago, many solution providers in the accounting profession provided offshore tax preparation and other labor-intensive processing services. For the most part, this outsourcing has already come back in-house. Expect to see even more growth in outsourcing via technology, rather than labor arbitrage, in the accounting space.
Maturation of Cloud Computing
Cloud computing is no longer a novelty and is expected to accelerate even faster in 2017. Many companies that previously elected to build private clouds have been switching to public clouds, once they realize how much time and expense is involved in developing and maintaining private solutions.
For accountants, this means two things. First, your clients expect you to be on the cloud. Client portals that let them securely and efficiently transmit sensitive documents are now standard. Second, to attract the best employees – and keep the ones you have – they need to be able to work when and where they want, as easily as they can if they were in the office.
Mobile devices and apps have empowered a do-it-yourself mentality in industries that were mostly hands-off for consumers, such as banking and investing. Why take time out of the day to visit a bank branch, or sit on hold when the web is available 24/7, with the data and service you need?
For accountants who embrace self-service technology solutions in their firms, this creates an opportunity to strengthen client relationships while simplifying busy season. Solutions exist to let clients take a snapshot of important tax documents throughout the year and store them securely for their accountant to access at tax time.
Clients can also sign documents from anywhere, organize tax information on their mobile device, and access copies of returns from prior years whenever they need them. These technologies aren’t meant to reduce accountant-client interaction, but instead appeal to your clients’ desire for self-service and convenient 24/7 access to their tax professional.
Security is top of mind for accountants and their clients, and having everything online these days has intensified security risks. Clients are more concerned about how companies are storing and using their data, and tracking their activities online. The threats are expanding, but there is a growing shortage of cybersecurity tools and resources.
More accounting firms realize the impossibility of handling all of the prevention, detection and resolution in-house. Security-as-a-Service (SECaaS) provides email encryption, security event management, identity and access management, data loss prevention, and disaster recovery that are budget-friendly and current.
Automation often centers on the customer side (self-service), but BPO providers are also automating processes at the other end of the transaction. Excel spreadsheets, manual calculations and redundant processes are on their way out. Automation of reconciliations, cost allocations, amortization, journal entries, variance analysis and controls verification are a new reality.
While there is a concern that many accountants will lose their jobs to machines, many accounting firms are looking at process automation as an opportunity to offer higher value advisory services to clients. The core services of tax and audits have become increasingly commoditized by technology, leading many accounting firms to work toward a shift to business advisory services. But, that change is rarely possible – or profitable – unless the firm invests in automation.
All of these innovations present challenges and opportunities for accounting firms to expand into a more advisory-focused role with their clients. Outsourcing of accounting processes has shifted from focusing solely on cost reduction, to clients looking for greater benefits and advantages from their outsourcing deals. Embracing technology, especially cloud solutions, will free up accountants to be the true advisors their clients are looking for.