19 Sep 2022

Aiming to enhance your accounting practice's quality and profitability, you have decided to hire an accounting outsourcing company to handle your accounting and book keeping responsibilities. Are you aware of which engagement model gives your business the best results? Would you appoint an accountant or bookkeeper on an hourly basis for a specific project or a full-time dedicated model?

Which engagement approach is ideal for you to assist you to draw a conclusion; XL KPO explains the most popular hiring practices used by accounting businesses in the UK & Ireland.

Two models are mostly preferred for hiring dedicated accounting members, and both are considered the best outsourcing model. Let's look into it.

1. FTE - Full-time employee Model

Assigning an accountant or bookkeeper to a full-time position on a monthly basis is known as a full-time engagement. After the hourly model it is one of the most common engagement models.

If your volume of work is higher than typical, this engagement model is ideal for you. When you employ a professional full-time, they entirely complement your core team of employees by doing the more basic duties like accounting, bookkeeping, payroll, and tax.

Using the full-time engagement model, you will be able to access support with highly desirable compliance capabilities. A full-time engagement model also spares you from the hassle of employing and terminating employees.

Additionally, the response time is typically quicker than what you can provide in your own practice. As a bonus, it can be up to 40-50% less expensive than employing an accountant in UK & Ireland if you outsource accounting service to XL KPO in India.

Benefits for Hiring dedicated accountant members using FTE

  • It has a fixed rate payment model and pays at monthly intervals.
  • Professional accountants and bookkeepers who only work for your accounting firm. Approval of the work by senior executives.
  • Data Security- Secured with 256-bit SSL encryption
  • Your accounting practice can benefit from the assistance in screening, choosing, hiring, and training accountants according to your needs. There are no hiring or training headaches.
  • If you've got a large amount of work, more affordable than hourly prices.
  • Scalable - expand up the resources instead of using expensive staffing.

2. Pay-as-you-go/ Hourly basis model

Accounting firms in the UK often use pay-as-you-go outsourcing as one of their engagement models. As part of this engagement model, you just pay for the hours utilized, and the service is used on a pay-per-use basis.

A solitary accountant or bookkeeper in the UK experiencing temporary workflow challenges can benefit from this engagement model. Additionally, you can use it during seasonal periods, like the busy season, when you need to complete the work immediately.

Most accounting companies in the UK use this methodology when they hire a dedicated accountant or use accounting outsourcing services for the first time. This approach is unsuitable for you; if you want a dedicated employee on your team, you should go for FTE.

Benefits for Hiring dedicated accountant members using FTE

  • Payment schedule- Pay an hourly cost for the specific services you utilize or, if indicated, as per-service fee.
  • In this model, one could pay on a monthly basis for hiring dedicated accounting members.
  • Data Security- Secured with 256-bit SSL encryption.
  • No long-term responsibilities.
  • Trained and accredited tax accountants and accounting professionals that work just for your accounting firm. Senior manager approval of the work.
  • Suitability- This model is suitable for account production, tax preparation, and accounting activities that can be easily quantified. While some of the clients initially like this strategy, as their practices expand, they typically switch to the best outsourcing model for hiring dedicated accounting members (Full-Time-Employee).

Cost of using the best Outsourcing Model for Accounting Services

FTE

A hiring dedicated accountant can cost between £1,100 and £1,400 per month under the FTE model, depending on their expertise. Pricing for an executive or other more seasoned resource varies from £1,600 to £2,000 per month. After every month, the fixed amount is billed to the accountancy firm. Based on this concept, an outsourcing firm sets schedules and budgets for the number of hours to work each month.

Pay-as-you-Go

As a general rule, depending on an accountant's total experience, an accountant's rate for the Ad-hoc/ pay-as-you-go/ hourly basis model approximately ranges from £11/hour to £18/hour. Invoices are sent to accounting firms based on the dedicated accountant's hours worked.

Conclusion

This blog should assist you in selecting the best outsourcing mode for hiring a dedicated accounting member and which strategy works best for you. It's worth considering whether to engage in a pay-as-you-go/ hourly or full-time-employee model if you're an ambitious accountant. In accordance with your needs, an outsourcing model is selected for the company.

However, you choose to outsource accounting, XL KPO Outsourcing services is ready to assist you in optimizing profitability and cutting costs. Learn more about our various engagement models by arranging a free chat with one of our specialists.