02 Mar 2022  |  2731

In this episode of the BKOT podcast, Chris has discussed with Malcolm Palmer who is a managing partner of A4G. They had discussed "Bookkeeping systems to help bridge the gap with using offshore staff".



Hosted by: Chris Rivera, Director Client relations, Entigrity Offshore Staffing

Guest: Malcolm Palmer, Managing Partner, A4G LLP



Chris: Alight! So let's get started. Hello everybody welcome to #BKOT.  We are on episode 46. Very exciting to bring on an offshore colleague of mine, we've met through, I think it was just him being out in the UK and doing this similar objective that we are came about together through literally an email and here we are today to talk about “bookkeeping systems and how to kind of integrate and use them with the offshore staff” and so Malcolm Palmer Managing Partner A4G LLP joins us today Malcolm please tell us a little bit about yourself.

Malcolm: Yeah, so running the campus practice in the UK. We've got about 70 people in a mix of different locations in UK and offshore, practice has grown from over 25 years, never had a year where we didn't grow and we've sort of built it really on the premise that we do about 70% what we do is repeat work all the stuff that people have to have done and 30% the staff they get a value from but the model really is that if you look at where our clients come from the nine ninety percent of our clients come to us for that thirty percent for that value-added stuff the stuff they get benefit from but of course once we've got them we keep them year after year and different needs and once arises it's all about getting that balance between delivering the routine staff well and efficiently so that you can then and earn the real profits by doing all the all the clever staff.

Chris: Yes, absolutely. Now let's go a few steps to see how you got started, so how long have you been offshoring in general and then specifically wanted to start with bookkeeping or did it start with bookkeeping?

Malcolm: No, funnily enough bookkeeping was fairly late to the game really. We took on our first offshore member of staff in late 2003 and we sort of looked at a few outsourcing services that were around then. It was pretty early days there weren't many people doing it. And it just didn't quite fit our model, we didn't like the thought of just giving all our work to another company who then did it in their way. We really wanted to have people offshore that became part of our organization and that we could get doing the work in a way that fitted with everything else. 

So we put a little ads in the Delhi chamber of commerce, newsletter or maybe an Indian chamber of commerce or something like that and we had a few people that contacted us and they filled in the questionnaire that we completed and some of them it was utterly disastrous and what he sent us was rubbish and but a couple of a little firm out there did quite a good spec and we started taking one or two people on and at that point really and the whole premise has been and different firms they could you don't have to buy completely into my philosophy but our whole premise has been that we want to push the work that's done in the background offshore and we want our staff in the UK to be freed up to spend more time talking to the clients. 

Nobody ever left their accountant because the end-of-year accounts weren't formatted in the right style or they left their accountant because their accountant didn't return their calls or they didn't get any advice on all these things. So the staff in the UK were just drowning in accounts and paperwork and all the routine stuff so over the time we've been doing it it's been all about shifting work that sort of work away from them. The bookkeeping was interesting because I sort of spent the first half of our business really avoiding bookkeeping and we had relationships with all ladies as it happened bookkeepers and we'd recommend clients to them and they recommend clients to us and sometimes the quality wasn't what we wanted it to be and my partners really felt that we should have a book our own internal bookkeeping arrangements, so that we could offer the whole solution really rather than it being a an important profit making section of our business again. 

It's just a way of keeping those clients tied to us and providing with all those services so the bookkeeping was way behind accounts tax returns our internal work that we do even HR stuff we were doing before bookkeeping and but once we sort of launched that bookkeeping business we thought it was very important that a big percentage of the repeat work was going to be done offshore so and that sort of progressed over the last five-six years really.

Chris: Now when talking about the value-added task in which the your folks in the UK should be doing but they are not returning a phone call I mean that is critical and so you're absolutely right how offshore staff these processes in place and identifying the roles and tasks which could be done by a remote worker anybody and so it's very important and then I always find that folks are just always 60-70% of time they are just working in that administrative side or compliance side and it doesn't have to be like that and so what would you say that some of the biggest challenges are to getting this off the ground and that you have seen working with clients? 

Malcolm: Yeah, I mean the biggest challenge is winning the hearts and minds of some of your senior team in the UK and we had a lady working for us who was very loud and opinionated and was always telling everybody internally how important she was to the firm but in fact was a it was funny, how many things that went wrong in the firm seem to have involved her and she make it sound like one person she was the worst of a few people and she left about two years after we started offshoring. 

I think I did a little dance when she went out the door. Because she really didn't want it to happen she wasn't she was a qualified accountant she wasn't capable of delivering those value-added services so therefore the compliance stuff was like a comfort blanket it was like hang on I need to hang on to this work because I don't want to do this other stuff and it's too hard and I think you have got to set you have got to you have got to talk to your team about why it's important if it's just about cost then you can't lie to your team they are going to they are going to smell that so they need to see what's in it for them and what's been in it for our team is that it has allowed people to progress much quicker. 

If somebody's doing a repeat job and they are capable of doing a bit more you can't promote them into that next job up unless you have got somebody to take the work away that they are doing at the moment otherwise it's all going to fall down right so the I made it very clear to people that you get your systems right, we bring in somebody offshore to do that work you train them up get it running really smoothly and then this is what I want you to do after that and it's so important you tell them that this is what I want you to do after that because otherwise they are just thinking well what am I going to be doing perhaps I am going to train this person up and then I am out.

So you have got to get, you have got to get the people behind it and you have to perhaps teach them how to work with somebody offshore. The lady I mentioned I think I said this before when we were on a we did a little presentation before I caught her saying one day India got this wrong and I went home a minute I don't know this is a country with a billion people in it you can't pin this one account Sarah on an entire country and but it just felt dramatic wow absolutely. 

India got this wrong if one of our I said if one of our juniors got it wrong you wouldn't say juniors got this wrong you wouldn't blame all of our juniors for one person's mistake and it was difficult to get some of those people talking I mean actually talking to colleagues offshore and the pandemic's been has been fantastic for I think we were pretty good at it already but once the pandemic happened, I did a little office email to my team one weekend and I said we're all offshore now because here we were I was sitting here ended up with a big dent in this chair.

I spent so many bloody hours sitting in it and it kind of brought home to everybody that it doesn't matter where you are and we're all working in this way and even though we're sort of back to normal now we're still a lot of us work from home a bit more often than we did and it's just it's just a much more fluid way of working but you have got to get your team to buy into that and if you think that you can just take this big lump of work and throw it out there and hope that it's going to stick it it's not, you've plan this you have got to have thought how you're going to deliver the work what the reporting structures are going to be between the different people involved no different to any other big challenge.

Chris: Really, that's a great story I could easily relate and it's about like you said the attitude and the mindset of folks. She didn't say this particular person, she said the whole country. And so that type of thought process though is a little bit difficult to work with because there's no open-minded they are not open-minded whatsoever and you can't have some folks with the whole offshoring concept, you can't have some all in, you can't have some not for it and you can't have some kind of debating both sides and going back and it just won't work you got to have everybody on the same page in the right mindset.

And if it's not right for the firm it's not right but you have to at least try explore and see what the options are but yeah and you're not always going to get 100 percent buy-in but you'll get majority where everyone sees the benefit and sees and understands right this is all about complementing our local team, remote team, onshore team whatever you want to call it or it's about the reducing the workload being able to help them serve their clients better and when you start seeing the value yeah I mean this thing takes off and so I could easily relate to. 

What you were saying now when so we talked about kind of how to get this how to get this initiated but yeah that's the biggest question I get is the workflow process right. So can you talk a little bit about some of the systems in place and is it more about documenting it is it more about using technology is it a combination or let's hear your thoughts on that.

Malcolm: Yeah so I talk to our sort of I am a bit of a systems anarchy and there's a book called you may have read called the “E Myth Revisited” by a guy called Michael Gerber and the E Myth the entrepreneurial myth is that people run businesses whereas in fact most of them work in a business that they also own and if you take them out of that business the business ceases to exist. 

So there's a lot in the e-myth about how Ray Kroc bought into the McDonald brothers business and friendship and replicated it over and over again. And I was years before we had started offshoring we we'd be we were growing quite well but there was just lots of silly little details that were going wrong and the that I had a we were part of a bigger firm back then I would I sort of broke away a few years later but so I had this senior partner. 

It was a really good guy he's a good sounding board for a few things and I said to him about all these silly little things going wrong I get a phone call from a client you'd say oh we've got this letter from Malcolm and it says that form XB3 is in the envelope and there's no form in the envelope and you just go how can you send this out when the form's not in the envelope.

And then I read the E-Myth and the E-Myth is all about systems so I started to write these systems and any time anything went wrong I wrote a system and that started to help improve things but actually it didn't solve the problem because people need had to know that there was a written system and if they didn't know there was a written system or they didn't know they were responsible for it and they still weren't going to follow it. 

So I sort of revisited it a couple of years down the line and I realized that the mistake that I’d made was to focus on the systems whereas what I should have done is we're not to focus on the systems but to start with the systems what I should have done is I should have started with the roles and roles are so important within an organization and are so badly misunderstood by most organizations. 

Most people think that each person in their business has a role whereas in fact they most people have several roles within the business and there are certain roles which we call the multi-roles where there's a pool of work which is shared out amongst a group of people so to make your business and to sort of breakthrough that 10-11 member staff type size a lot of people struggle to get past that one that's almost their cap they can manage a business of that size and don't get beyond it and part of the reason they don't get beyond it is because they haven't properly documented the different roles that exist within the business. 

I mean I could bang on about this for hours and you'd probably be nodding off over there Chris so I won't do any more detail other than to say look if you can identify those key roles in your business and all the responsibilities that go with it then when you allocate those roles to individuals they know what they are responsible for the detail behind it may have to follow they may have to work out some of that detail themselves but at least they know they are responsible for it so you may have a role called offshore coordinator and that's not a role in our organization but because but that might be a good place to start. 

If you're new to offshoring and you set out responsibilities for the offshore coordinator that we need to make sure that the offshore staff have got enough work to do they need to teach the onshore staff the ways of managing they need to make sure that the it is working set out all of these responsibilities and give it to one person you give it to two people never works you have got three situations then either both of them will do it which is inefficient one of them will do it one won't great but possibly neither of them would do it which is the most likely scenario so you just need one person to do those things and then and then from there you have got an infrastructure to build from and that's and our whole systems methodology comes from that that's where our bookkeeping approach is all based on these key roles I mean we've got this account manager role and bookkeeping specialist role and for us the account manager is always in the UK now that may change in years to come as this just we feel at the moment because the account manager is all about the relationship of the client so they meet the client when we're going to do the bookkeeping they allocate the work to the bookkeeping specialist the bookkeeping specialist can be anywhere in the world they could be one of our juniors that we've taken on straight our school and we want to train them up with those skills they could be in India they could be just working from home 15 miles down the road but have a disability that makes it unable for them to get into the office it really doesn't matter where that bookkeeping specialist role is but they sit in the background and they do the work and then they push it back to the account manager who then communicates it across to the client and then all the systems we've written all support that jobs.

Chris: Yeah and what you're saying is a perfect way to get started because sometimes I feel that folks get overwhelmed or they just can't identify or trying to complicate something that's just very easy right you need to identify right the roles the tasks the activities how many hours is that who's going to be kind of the anchor what you're saying your coordinator onshore and just getting all that set up and then you can are interested in working with associates anywhere you're ready but I do find that a lot of folks do both at the same time they are just like I don't know what to do how to go about it but I am going to do everything at once and it becomes definitely overwhelming so if you have that kind of pre-work in the beginning then yeah it starts to things will build out a lot smoother for sure as we as we are winding down can you share some us an expert tip or some any final thoughts with us before we go today.

Malcolm: An expert well I could always just have a little look at our website but I mean we're in a counseling practice we have a little a little sideline here where we help other accountants and practices get there get their bookkeeping offering or payroll offering up and running so if you just if you google a4g offshoring you'll find a page there I think what would I what do I give as the number one tip I think I think the first thing is just to think about what identify the work that you want to offshore that's your first thing and then then create roll around it so it could be payroll, it could be bookkeeping, it could be accounts preparation but start with start with one thing don't expect you can just bring somebody in and just to do a bit of everything you're trying to create a you're trying to create your factory workshop in the in the background so you start with something that you can that there's a lot of it and the it's a lot of it is repeat stuff and just and get that right just working when you have got that right you can move on to something else in a few months time and so on that that would be my advice.

Chris: Yeah what you're saying is a gradual approach yeah and then and so you may have eight positions open two positions whatever it may be you just gotta start slow identify where what's the priority 1a per se and get and get this rolling and I agree the what you guys do in helping the practice out is very important and then folks out there in the accounting industry need resources to get them through these new times of virtual digital age I mean for us just sat here the whole time and not much has changed right I have worked probably for several years it's not easy but when you when you once you practice it and you live it it's made and now folks are realizing that anybody can do it so thank you for your time today Malcolm really appreciate you sharing your ideas and thoughts and for bookkeeping especially that's what I was going to say bookkeeper a lot of clients that I work with don't want to take it on and this is a great opportunity to take it on and not having to do right so much where you just onboard the clients in the in a certain way and then you have the assistance processes in place it's a whole new revenue stream so absolutely yeah all right folks check out the a4g offshoring on google search or and check them out Malcolm again thanks so much for the rest of your evening we'll talk soon.

Malcolm: Thank You!

Entigrity™ is a trusted offshore staffing partner to over 600+ accountants, CPAs, and tax firms across the US and Canada. Our flexible and transparent hiring model helps firms of all sizes hire staff for accounting, bookkeeping, tax preparation, or any other task for 75% less cost. As a firm 'run by accountants, for the accountants', Entigrity captures the hiring needs of accounting firms most precisely, providing staff that works directly under your control and management, still, you are left with least to worry about compliance, payroll taxes, overheads or any other benefits.

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