Finance: New Approach Needed to Deal With Accounting Skills Shortage
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Innovative outsourcing solutions and a mindset change are required to deal with the dire shortage of qualified accountants and the impact this is having on businesses in South Africa.
That’s the view of Jacques Velleman of Gauteng, head of the Accounting Services team at The IQ Business Group who says businesses need to move away from the traditional approach of “a full time” accounts team and rather opt for a outsourcing partnership with a trusted advisor.
This, he explains, can be achieved by outsourcing the accounting function in very much the same way as companies outsource other non-core functions – IT, security, facilities management and maintenance and marketing activities, to name a few.
“Every business needs reliable, competent and experienced accounting staff to deal with their month end management reports, invoicing, collections, and statutory returns. The shortage of CAs – which shows no signs of abating – means they are having to pay a premium for the skilled staff members required to do these critical but non-core tasks,” he says.
“However, while a financial manager or equivalent may be very busy performing the month end accounting functions, many highly qualified and highly paid individuals may find themselves un-stimulated during the rest of the month. This inefficiency is not only a waste from the employers’ side; it may lead to high attrition rate among the financial staff as mid-month boredom sets in.”
Velleman points out that by outsourcing the accounting function, tasks that are critical to the financial wellbeing of the organisation from the maintenance of general ledgers, debtors invoicing and payment allocations, creditors payments, statutory returns and the preparation of monthly management accounts and board reports, all the way up to preparing audit files, can be completed far faster by a team of accountants with specialist skills in different fields rather than by one individual.
Another benefit of outsourcing routine accounting functions – apart from saving on the costs of employing and retaining individual employees – is that there is always a qualified person available to undertake the routine tasks that the law requires must be done at least monthly.
“If the financial manager resigns, goes on leave or is taken ill, the accounting function cannot be put on hold until a replacement is found or the manager returns. With outsourcing, the focus shifts from getting /someone/ in to do the job to the actual /deliverable/ that this person or team would be achieving,” he says.
In addition, it frees the business from managing these individuals as it only has to hold its trusted accounting outsourcing partner accountable in terms of a performance agreement.
“And sometimes individuals don’t fit with a company’s culture and it is a lot easer and more cost effective to replace such individuals through an outsourcing arrangement,” he adds.
IQ’s Accounting Services provides team-based month end accounting, implementation and advisory solutions. The teams consist of qualified CAs and TOPP (Training Outside Private Practice) candidates – trainee CAs who are specialising in financial accounting and management accounting rather than auditing.
“Outsourcing makes sense as it is a cost effective way of ensuring the company focuses on its strengths and core business while we, the outsourcing partner, deliver on our strength – accounting”, Velleman concludes.
Business News Sector Tags: Finance|