As you will have seen from another post I now have over 80 clients split roughly 50/50 between sole traders/partnerships and ltd companies. This results in 40 CT returns and 84 self assessment returns.
I always thought somewhere about 100-120 clients would be my maximum but I think it may be less than that.
I therefore have a decision to make. Do i sit at the level where I am the now and trade away or do I look to push on to the next level. The next level will involve assistance from someone else or more than one person. I dont want to go down the employer route but i would like to explore the possibility of subcontracting.
I already subcontract all my payroll work and I have started giving a few bookkeeping jobs to someone local who was recommended to me.
Would like the thoughts of anyone who has subcontracted out accounts and tax work as to what are the logistics of it are and what things should you consider.
Questions are
1. Do you provide a computer for the person to do the work in your office or do you give the job away to the person so they can work on it on their own computer with perhaps a dial in facility to your machine.
2. What rate do you pay? I have seen a chartered practice locally who outsources and they pay 1/3 of the total fee for the accounts and tax return prepared to draft stage. They pay once the fee has been paid in full.
3. Do you just get one person or do you get a bank of maybe a few individuals you can call on at any point in time.
4. Does the person use their own software? I would be looking for someone with experience of VTaccounts, taxcalc, xero and SAGE as this is what I use or do you let them use your software. Assume this will result in additional costs as i know VTaccounts is priced based on number of people using it.
Sure there are other questions I should ask but have just thought of the above off the top of my head.
I have outsourced a bit of work in the past before I took on my first employee. I'll try to answer your questions the best I can.
The people I outsourced to did not work from my office and so I didn't need to provide them a computer or a desk etc. i have got a VPN setup so I just provided them access to the information they needed on that.
Perhaps wrongly, I negotiated a fee for each job. I tried to pay half my fee or thereabouts. This was done on their invoice terms (normally 30 days) and not always when i received my money for the job.
I had, and to some extent still have, a few people I could/can call on when required. I didn't want to put all my eggs in one basket so spread the work around a bit.
All of my subcontractors used their own software. In my experience if you can assure them of enough work people wont mind making an investment in extra software if and when required.
The most important things for me was getting the agreement right to protect myself and my clients, and to ensure my own high quality. Rightly or wrongly I assumed when someone is one level removed from the client they wont care as much about the quality of work. This was the case with one or two people early on, but I weeded them out.
As I said, it was very much suck it and see when I started outsourcing. Hope this helps a bit.
Havent a clue what VPN set up is. Assume it some sort of dial in to your system.
I probably wouldnt pay more than 1/3 of the fee on the basis of 1/3 costs, 1/3 overheads and 1/3 profit and wouldnt pay the subcontractor until the job has been invoiced and paid in full.
I will speak to HR contact I have about getting a contract drafted up should i subcontract as given i would be paying the subbie 1/3 of the fee there is an incentive for them to poach the client and quote of fee of say half of what i charge. Would need to have some restriction clause preventing them doing this.
Given i work in the central belt I am pretty sure could find 2 or 3 high quality people who would be interested in subcontracting work eg stay at home mums or retired.
Would be looking for someone who has at least couple of years experience as wouldnt be interested in taking on someone who needs training. If looking for a trainee would be better off just employing them on a p/t basis.
Cheers for comments.
As said, might look to go down the subbie route in the 3-6 months if things carry on the way they are as cant carry on servicing a growing client base myself.
VPN, is a virtual private network. It's a bit similar to the old dial in systems, but as very few folk have traditional modems they don't work very well now. There are a few 'out of the box setups' like logmein, or you can use something like dropbox to share the client files.
I got a pretty bog standard contract from an accountant friend.
Kris
-- Edited by kjmcculloch83 on Tuesday 4th of June 2013 08:19:44 AM
I do subcontract work, and its all done at my office, with PDFs being sent to the client, together with full working papers. I submit everything from within my software, and can use client IDs if they prefer.
I find the most important thing is re-assuring another accountant that their work is safe with me, and that I don't poach. I have my own payment terms, as its not my fault if their client doesnt pay. Some work is by the hour, others are fixed. Depends, really.
As an after thought.. I even have emails addresses within the clients domain, so that I can pass myself off as their employee.. another thing you might want to consider. :)
As you will have seen from another post I now have over 80 clients split roughly 50/50 between sole traders/partnerships and ltd companies. This results in 40 CT returns and 84 self assessment returns.
I always thought somewhere about 100-120 clients would be my maximum but I think it may be less than that.
I therefore have a decision to make. Do i sit at the level where I am the now and trade away or do I look to push on to the next level. The next level will involve assistance from someone else or more than one person. I dont want to go down the employer route but i would like to explore the possibility of subcontracting.
Mark, if you are looking for someone to take on some of your work, I have been looking for contract work in practice. Let me know if I can help.
