An accountant I know (‘Jeremy’) is heavily reliant on his two full qualified staff. For the reasons explained below I suggested that Jeremy do something unconventional as a form of risk management insurance he’d never previously considered.
In addition to his two full time staff Jeremy also has a couple of trainees and makes regular use of specialist contractors.
During a conversation about how he runs his practice, what he enjoys doing and his priories, Jeremy revealed just how much he relies on his 2 qualified staff.
We then talked about how long they had worked for him, their aspirations and personal circumstances.
Jeremy thinks it unlikely that either of them would choose to leave him to work elsewhere. But if anything happened to prevent either of them working for him for more than a week or two, he would be stuck.
There is always a risk that key people in your practice might stop being able to work for you.
They could decide to leave, be enticed to work elsewhere (locally or further afield), have an accident, become ill and so on.
Whilst you may feel that none of the above are very likely, the impact of losing support for more than a week or two could be significant. It certainly would be in Jeremy’s case.
If either or both of his full time workers became unavailable then none of Jeremy’s trainees or contractors could take up the slack or provide him with comparable support.
And, most importantly, Jeremy would not want to take on either of their workloads.
So the impact of this risk is high.
Whenever you are aware of a risk with high impact it makes good business sense to have appropriate ‘protection’ in place.
What you do to limit the impact of a risk normally depends on how likely you feel is the prospect of that risk becoming a reality.
In situations where you judge the likelihood of the risk to be low then you may simply decide to ensure you have adequate insurance in place.
Conventional insurance is a pretty standard approach to risk management where the risk is low and/or where the impact of something bad happening could be very significant.
What could Jeremy do to avoid having to suddenly cope without one or both of his key (qualified) staff?
Arrange a back up facility
Another insurance policy isn’t what Jeremy needs here.
Instead, my advice was to put in place a system and process that could be called upon in the event of an emergency.
My suggested solution, to ensure Jeremy would have suitable available capacity when he needs it, is outsourcing.
He may not need to outsource at the moment but it would be much easier to do so in an emergency if he has already sorted out the fundamentals and built a relationship with an outsourcing company where he can ‘turn on the tap’ in the future as and when he needs to do so.
Jeremy has the luxury of time to do this at the moment whilst he has no desperate need to outsource.
I recommended he test out a trusted, reliable, recommended outsourcing company with just one or two pieces of work. If all goes well he will then know what to do if he suddenly needs significant help.
He may also find other benefits flow after initiating such a relationship. So, if all goes well, he might decide to make more use of the outsourcing company regardless. I have heard of that happening too.
Where to start?
I suggested that Jeremy contact my friends at Global Infosys, the award winning outsourcing company based in Harrow, North West London. I’ve been working with them for a while but have held back from recommending them until now. What changed?
At Accountex 2019 I had the opportunity to chat with 4 accountants who have been outsourcing work to Global Infosys for some time. And I then interviewed those 4 accountants while hosting a panel discussion at the event. The consistent level of positivity was such that I am now happy to recommend Global Infosys.