Currently there are many parts of the recruitment world that are being outsourced; Business Process Outsourcing (BPO), Recruitment Process Outsourcing (RPO), CV Sourcers, Outsourced Resourcers, etc.  However considering outsourcing the back office and accounts department of the agency is not something many agencies consider to be at the top of their priority list.

Many agencies will start by using a known accountant to look after the year end accounts and statutory work and try to look after the back office work themselves.  The next stage is the agency taking on an administrator/bookkeeper to handle the back office work and these departments will grow to handle the work load as the agency’s turnover and business increases.  The bigger the agency grows the more different people will be required such as credit controllers, management accountants and financial controllers.

Once this cycle starts the agency very rarely looks at the possibility of outsourcing their back office and accounts unless they do a proper analysis of the costs and savings that can be made or they are forced to by unforeseen circumstances.

Below are some times when an agency should consider outsourcing their back office and accounts department:-

1. Key Back Office Staff member has decided to move on

When your financial controller or accountant decides to leave your agency, finding a replacement that can take over their work and continue to do the same job is not easy.  Building the trust with someone else who has just started with you can put further strain on your business and there is no guarantee they will work out or decide to stay. Finding the replacement can also be tricky as there are not many experienced financial controllers within recruitment agencies who can instantly come into the agency and work effectively from day one.

2. Sudden increase in contract business

Winning a large PSL agreement or taking on a client with lots of contract roles can be exciting and profitable for any agency but not having the back office capabilities to cope with the increased workload can eliminate that profitability if not managed properly.  The same scenario may mean that your back office team will be under pressure for certain times of the month and quiet for other times meaning you are paying full time wages for staff that are not working full time.

3. You are still doing your own invoicing and bookkeeping

Many new start up or SME recruitment agencies are still taking their own selling time to handle their own invoicing, credit control and bookkeeping instead of deciding to outsource this.  This is mainly to do with the misconception that to outsource their back office is expensive.  However, when you add up the time taken doing some of this administration compared to concentrating on making that next placement you will notice this can be even more expensive.

4. The cost of your back office and accounts team is spiralling out of control

Having an established back office team in place can give much more stability to your agency processes, however, having to contend with annual pay rises, HR issues such as sickness and holidays, staff benefits and replacing staff members can mean that the costs of back office and accounts staff can start to spiral out of control.  As back office and accounts teams are often seen as “non-billers” and a cost to the business many agencies will not invest as they should, which can mean they can be overstaffed with poor systems in place.

5. You would prefer to have more space for your sales consultants

Many agencies when analysing the cost of their back office and accounts teams will often only look at the wage costs and not realise that there are other costs involved, such as office space, furniture, computers, stationary, printing, postage and software licences.  The office space being taken up by the accounts staff can also be looked at as space for sales consultants who will make you money rather than costing you money.

TBOS has worked with a number of existing agencies over the years who have decided to review their costs and consider the possibility of outsourcing their back office and accounts departments.  Many have seen the cost savings across the company and realised that by outsourcing these services they can concentrate on growing and expanding their business further.

If you want to review the current back office and accounting costs of your agency and see how easy it is to outsource then please contact the TBOS office on 0845 881 1112 or email us at enquiries@tbos.co.uk