All You Need to Know about Offshore Staffing for Accounting Firms
Financial and accounting services are critical components of any firm. Thus, accounting companies and staff are responsible for carrying out their duties with the highest care and attention. After realizing the importance of accounting work, some CPA firms (accounting firms) in the US are implementing an alternative solution in hiring: offshore staffing for accounting firms.
But what exactly is offshore staffing in accounting, and how is it different from outsourcing? Let’s dive in!
What is offshore staffing in Accounting?
First and foremost, you must distinguish between offshore staffing and outsourcing as two distinct hiring models.
- Offshoring means relocating business operations from one country to another for better growth and productivity.
- On the contrary, outsourcing means contracting a particular job to an external global company.
Most US CPA firms are looking forward to offshore staffing solutions because, despite being vital work, accounting is still not a core operation for various businesses. For example, accounting will not be a key task for a company that manufactures socks, but it will still be crucial. As a result, these organizations hire a CPA firm to handle their job.
The CPA firms spend most of their time filtering the books and less on the higher profit-yielding activities. However, CPA firms are not supposed to focus on particular services because of the tight schedules and engagement in bookkeeping and accounting services. The special services that must be focused on are tax consultancy, advisory, etc.
After realizing this, some CPA firms in the US are implementing an alternative hiring model with numerous benefits – offshore staffing – to outsource specific tasks to BPO companies in cost-saving countries.
Maybe you want to read: How to Mitigate the Risks of Accounting Outsourcing?
The shortage of accountants in the US
The United States Bureau of Labor Statistics (BLS) estimates that 136,400 accountant and auditor vacancies will be created annually over the next decade.
This might lead to a competitive job market for top talent, and the longer the scarcity persists, the more significant the impact.
A lack of accountants may result in a decrease in business responsibility and honesty. This could lead to more fraud and compliance issues. Minor accounting errors can cause a company’s stock price to decline, resulting in additional financial difficulties.
Here are some specific examples of how a shortage of accountants can harm businesses:
- Delayed financial reporting: Businesses may have difficulty finding qualified accountants to prepare their financial statements, which could lead to delays in reporting. This could make it difficult for businesses to obtain loans or make strategic decisions.
- Increased compliance risks: Businesses may only be able to comply with all applicable regulations if they have enough qualified accountants. This could lead to fines or other penalties.
- Fraud: The shortage of accountants could make it easier for businesses to commit fraud. This is because there may be fewer people to detect and investigate fraudulent activity.
- Stock price volatility: Even minor accounting errors can cause a company’s stock price to drop. This is because investors are concerned about the accuracy of a company’s financial statements. If there are too many accounting errors, investors may lose confidence in the company and sell their shares, which could further cause the stock price to drop.
The accountant shortage is a significant issue that could substantially impact firms. Businesses must address the problem by giving competitive pay and perks to attract qualified accountants. They should also invest in training and development initiatives to assist current staff in developing the skills required for accounting success.
6 Benefits of Offshore Staffing for Accounting Firms in the US
CPA businesses must maximize their revenues as soon as possible because the accounting market is competitive. Profit is one of the most essential variables in the growth and expansion of accounting organizations.
Working with an outsourcing partner in a nation with lower labor costs, such as India, the Philippines, or Vietnam, is one of the most successful techniques for accounting businesses to attain profitability.
However, cost-effectiveness is a relatively restricted benefit of remote hiring for accounting companies since various other unknown benefits lurk beneath the recruiting approach for US-based offshore staffing organizations.
Avoid losing potential clients
The best part about offshore staffing is having a committed, qualified, and competent offshore team at your disposal. As a result, your ability to handle bookkeeping and accounting duties multiplies threefold.
Furthermore, if you engage offshore accounting services from various time zones, such as Vietnam and the United States, where there is a 12-hour time difference, you can give services around the clock.
So, if you receive an urgent contact from a client, you can immediately begin working on their project because you have a backup crew to assist you. This will eventually boost a new accounting firm’s profit and reputation among clients.
No need to fear losing employees
If you’ve been in the accounting profession for a while, you’re probably aware of how tough it is to find and maintain qualified personnel in this competitive field. Companies must sometimes face a significant loss if their accountant resigns. This damage will be exacerbated for small and medium-sized businesses, which will be forced to engage new accountants quickly and pay a premium.
However, if you have an offshore accounting team, you won’t lose your work even if your in-house personnel quits without warning. This is because many accounting professionals and tax experts support offshore accounting firms.
High-end quality assurance
Accounting is delicate; a single incorrect entry or computation can cause many problems. Business organizations rely on professional accounting firms only because they are frustrated with the number of errors and reviews required in the work of their in-house accountants. However, when professional accounting businesses overload their in-house workers, they cannot pay the required attention to work, gradually increasing the number of errors.
However, because you may be more demanding with your service provider and require quality and efficient work that was mutually agreed upon, offshore staffing for accounting firms can alleviate this problem. Accounting firms might even improve their operational efficiency with this solution.
Extra value for your clients
Suppose you want to expand your accounting firm and provide more services to your clients, such as auditing, tax preparation, payroll, etc. In that case, you may encounter obstacles such as a lack of time, a limited budget, a shortage of expertise, and various other problems.
However, you can learn to deliver additional services to your consumers through progeny. For example, suppose you wish to offer tax preparation services to your clients during tax season. In that case, you can offshore the service for a limited period and offer entire financial solutions under one roof.
Increased profitability without extra efforts
The primary goal of offshore staffing for accounting businesses is to make more money by cutting expenses while maintaining workflow and putting in more effort. In this hiring technique, you first save costs by eliminating overheads such as part-time pay and other departmental overheads.
This allows accounting firm owners to use their spare time to develop marketing ideas to advertise their company. Accounting firms can boost their business profits in a variety of ways by offshore work.
Hire additional staff suiting your business cycle
Accounting and bookkeeping tasks are typically assigned to firms for a set period based on their business cycles, ultimately determined by their corporate structure. Banking and finance businesses, for example, have a tremendous accounting workload towards the end of the fiscal year because they must conclude all accounts.
As a result, offshore accounting services for such organizations enable accounting firms to quickly handle extra activity during a specific period without raising workers. This will give accounting firms flexibility, but it won’t be easy to achieve.
9 Things to consider when choosing an Offshore Staffing for Accounting Firms
When choosing offshore staffing for accounting firms, consider these key factors to ensure they select the right offshore partner.
Cost
The amount of savings that can be achieved with offshore staffing will vary depending on several factors, such as the size and type of business, the specific roles being outsourced, the location of the offshore staff, and the level of experience and skill required for the job. However, it is estimated that businesses can save up to 70% on labor costs by outsourcing jobs to countries with lower labor costs.
In general, offshore staffing can save costs in several areas, including labor costs, taxes, benefits, and overhead expenses. For example, businesses can hire skilled workers in countries with lower labor costs and pay them lower salaries than they would for equivalent positions in their home country. Additionally, offshore staff may not require the same benefits or insurance coverage as domestic staff, reducing costs.
Quality of service
The quality of the service provided by an offshore staffing provider is essential. You should ensure the provider has a good track record of delivering high-quality work. You should also check the provider’s references and ask for samples of their work.
Flexibility
You must ensure the offshore staffing provider is flexible enough to meet your needs. You should be able to scale up or down your workforce as needed. You should also be able to change the type of work that you outsource as your needs change.
Reliability
The offshore staffing provider should be reliable and responsive. You should be able to reach them when needed, and they should be able to deliver on their promises.
Security
The offshore staffing provider should have robust security measures to protect your data. You should ensure that the provider has a secure infrastructure and follows best practices for data security.
Time zone difference
If you are in a different time zone than the offshore staffing provider, you need to ensure that the time difference will not be a problem. You should be able to communicate with the provider during your working hours, and they should be able to deliver on their promises on time.
Language barrier
If you are not fluent in the language of the offshore staffing provider, you need to make sure there is a way to communicate effectively. You should be able to communicate with the provider in your language or have access to a translator.
Cultural differences
There may be cultural differences between you and the offshore staffing provider. You need to make sure that these differences do not create any problems. You should be aware of the cultural norms of the provider’s country, and you should be respectful of these norms.
Legal implications
You need to ensure there are no legal implications to outsourcing your work to an offshore staffing provider. You should check with your lawyer to ensure that you comply with all applicable laws.
By considering these points, businesses can select an offshore staffing provider that meets their needs and helps them achieve their goals.
Offshore Staffing for Accounting Firms: Conclusion
Outsourcing accounting tasks to a trusted partner can open up a box of benefits for accounting firms by which they can increase their profit, flexibility, and productivity without putting in the extra effort.
Now, whether you want to hire offshore accountants to handle the work of your accounting department or some specific accounting tasks, you can contact Bestarion and get a deep briefing from our managers. Feel free to contact us via email at info@bestarion.com or call this number (+84) 349 600 819
Why Bestarion?
Bestarion will be a back-office support provider without direct contact with your clients. Your CPA firm works directly with the client; all communication and reports are in your name. As a result, the client is unaware of Bestarion’s function as a strategic partner. We have two models, including Fixed-price and Hourly rate.
Highest Security Levels: We are an ISO 9001:2015, 27001:2013, and GDPR-certified company that can cater to all the requirements for Accounting services such as Bookkeeping, Payroll, and Tax Preparation. We invest in robust security systems and applications, provide adequate security training to employees and ensure that our client’s data is always protected.
Cost & Time Saving: We can help you to reduce operating costs by eliminating costs of taxes, office space, and equipment. It frees up your time to focus on core business activities.
Timely Financial Reporting: We ensure accurate, prompt, and reliable financial reporting within prescribed deadlines. Allowing your organization can enhance transparency, facilitate effective decision-making, and maintain compliance with regulatory standards.
Technology-driven Approach: We leverage the latest cloud-based finance and accounting software to automate tasks, record transactions, generate orders and reports. This technology-driven approach allows us to enhance efficiency and streamline financial processes effectively.
