Client Accounting – Why Outsource?

In this guest feature, Chris Mason, Operations Director at The Letting Partnership, outlines why agents might want to consider outsourcing client accounting.

The two main reasons that an agency decides to outsource are:

1. To reduce costs

2. To free up time to focus on core business goals and planning

The challenge can often be finding the right solution. When it comes to choosing an outsourcing company, what can you do to make sure they are the right partner for you?

Team up with the right company and they will deliver on the outsourcing industry’s promises. Partner with the wrong one and it could cost you a lot more than just money. Relationships with your landlords will most certainly be damaged, employees will feel undermined and consequently your agency’s reputation will inevitably be tarnished.

Finding an outsourcing partner which ‘best fits’ with your business is key to a long, happy and successful relationship. So where do you start? First thing to do is work out how much or how little you want to outsource.

Using client accounting as an example, would you want your outsourcing partner to provide a complete start to finish service? This could include everything from processing client money, posting contractor invoices, making all payments, registering tenant deposits, collecting, and paying over to HMRC on your behalf to any non-resident landlord tax. Or would you be happy to continue to do things like posting contractor invoices and registering tenant deposits ‘in house’?

Outsourcing your client accounting should give you continuity of service, with rents processed every working day and no requirement for the agent to find cover for holiday or sickness.

Furthermore, you should trust the capability of staff at any company you chose to outsource work to. At The Letting Partnership, offering services exclusively to the letting industry allows for specificity of training, ensuring all teams within the business understand lettings from the ground up.

Often agents realise a potentially significant cost saving, as they are able to reduce overheads or redeploy existing staff to other roles. As your agency grows, outsourcing will often provide a cost-effective alternative to hiring staff. If the owner currently undertakes the role, there is clear benefit in freeing up time to focus on growing the business.

The factors outlined above should give owners comfort and confidence that outsourcing is beneficial to business, so what due diligence should you be doing when choosing the right partner?

Do your homework. Ask questions and don’t sign up until you’re satisfied with the answers!

· How long has the company been doing client accounting for letting agents?

· What’s the background and experience of the directors, partners, and management team?

· Will there be a dedicated account manager assigned to your account?

· Is the company a member of any recognised regulatory organisation?

· Does the company have Professional Indemnity insurance that covers theft and/or misappropriation of client funds?

· Does the company have Client Money Protection insurance in their own right?

· Can they provide a reference from an agent already outsourcing?

· How long will the transition take and how will it be implemented and managed?

· Do you have complete visibility over the client money?

If you put in the time and effort to find out about your potential outsourcing partner you will reap the awards in the long term. For owner-managed businesses the benefits of outsourcing to an experienced and agent-friendly company far outweigh the expense and burden of conducting the process in house.

Since starting out in 2006, The Letting Partnership has become an industry leader in the field. Dedicated exclusively to lettings, they offer tailored service packages using your existing software and client money account – or supplying these for you. If you would like to know more about The Letting Partnership call 01903 447900 or visit the website at www.thelettingpartnership.co.uk.