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Topics: Accounting, Accounting outsourcing, outsourced accounting services, Outsourcing

5 Straight-up Reasons for CPA Firms to Outsource Accounting Services

6 MIN READ | Posted on May 23, 2022
Written By Pooja Kshirsagar

five-reasons-for-cpa-firms-to-outsource-accounting-services

The year 2022 has been a mixed bag for accountants and CPAs. While a respite in the global Covid-19 pandemic revived accountants’ resolve to scale their firms, the ever-increasing staffing shortages in the industry are brutally restricting their growth. To counter the rising challenges in their way and beat the talent woes, many CPAs are turning to outsourced accounting services.

Outsourcing is an easy and cost-efficient way for CPAs to hire talented resources offshore and add them to their team. Outsourcing, in fact, is estimated to be the future of staffing for accounting firms.

There are several reasons why CPA firms should outsource their accounting needs. Apart from staffing issues, CPAs are faced with multiple other challenges such as the growing competition in the market, inflation, shift in the working models, and the plausible return of the coronavirus pandemic.

Let’s look at the top 5 reasons for accountants and CPAs to consider outsourcing accounting and bookkeeping services.

1. Hassle-free staffing

Small CPA firms are prominently the most affected by the growing talent shortage in the US accounting industry. While finding qualified accountants is a task, retaining the existing staff is equally challenging.

Lesser resources mean that accountants are often loaded with work beyond their capacity. A recent survey by Accounting Today revealed that CPA firms aim to focus more on advisory services in 2022, yet an alarming 47% of them are stuck doing compliance tasks. A lack of adequate resources is thus evidently putting a strain on CPAs and restricting their growth in the right direction.

hassle-free-staffing-with-outsourced-accounting-services
Via: www.accountingtoday.com

 

Accounting outsourcing companies understand the staffing woes of the US accounting industry and craft customized solutions to make staffing an easy and hassle-free process. Outsourced accountants work as an extension of the CPA firms’ in-house teams and seamlessly manage their critical compliance tasks.

With outsourced accounting, accountants can add talented and extensively trained resources to their team in as low as 48 hours. Moreover, outsourcing compliance tasks helps CPAs free up their internal resources for more critical tasks such as providing advisory services to clients.

2. Cost savings

The Covid-19 pandemic significantly affected the cost of services and put pressure on accounting firms to constrain their prices. This means that clients now expect accountants to do more in existing prices or offer discounts on their rates. The downward price pressure on services has been listed among the top 10 challenges by accounting firms in the 2022 Accounting Today survey.

In such a scenario, making profits on their services sounds like a taxing job for CPA firms. The only way for accountants to sustain this situation is to bring down their firms’ operational costs. An easy and surefire way to do this is to switch to outsourced accounting services.

Due to the talent shortage, accountants are in massive demand in the industry and thus dictate higher salaries. To add to it, the cost of recruitment, employee benefits, office infrastructure, and training and development make hiring exceedingly expensive.

With outsourcing, however, CPAs can put a check on these costs. Outsourced accounting firms help CPAs hire talented offshore accountants at far lesser prices than onshore hiring. Moreover, their salaries, infrastructure, and end-to-end management are taken care of by the outsourcing provider.

This can ensure significant cost savings for CPA firms and bring down their operational costs, thus helping them deal with the downward price pressure.

3. The technological advantage

Technology has always been a challenge for the accounting industry. Accounting is a traditional profession. Although several of its processes have undergone technological transformations over the years, the industry still struggles to match its pace.

technological-advantage-of-outsourced-accounting-services
Via: www.accountingtoday.com

 

The 2022 Accounting Today survey has revealed CPA firms’ typical struggle with integrating the latest technology into their processes. It is, in fact, listed among the top 5 challenges facing accounting firms in 2022. When asked about their technology spending in 2022, as many as 62% of small-sized firms answered that their budgets wouldn’t accommodate new technological changes.

The above figures suggest that although most CPAs have identified the technological gaps in their firms, they are not financially prepared to bring about a change in this area. This is where outsourced accounting services come into the picture.

Top-tier accounting outsourcing companies offer CPAs the advantage of becoming technologically adept without significantly elevating costs. These providers train their accountants on the latest accounting and bookkeeping software such as Sage, Moneysoft, Xero, Iris, Clear Books, BrightPay, AutoEntry, and more.

When their outsourced offshore team is adept with the latest technology, it is easier for accountants and CPAs to incorporate new software into their processes. With this, accounting firms can maximize automation of critical processes and minimize human work, thus negating the scope for error and improving efficiency.

By outsourcing accounting and bookkeeping services, CPA firms can pave the way for a technological revolution within their firm.

4. Economies of scale

Every year, with the entry of new accountants and CPA firms into the market, the competition in the industry grows exponentially. It is a challenge, particularly for small-sized accounting firms, to scale amidst this competition.

A lot of accountants’ time goes into managing their firms’ compliance and administrative tasks. The core focus of these firms is mostly to sustain and survive in this competition. In this process, scalability often takes a backseat.

This is yet another challenge that CPAs can tackle with outsourcing. When accountants team up with accounting outsourcing companies, they save a lot of time that is otherwise lost in long recruitment and training cycles. This helps firms scale quickly, affordably, and flexibly.

Scaling your business means getting the ‘economies of scale’ advantage. It helps CPAs get more work done and facilitates more revenue, fueling greater profits.

Scalability also implies that small CPA firms can grow into mid-sized businesses and beyond. With outsourcing, accountants can speed up the process of fulfilling their growth and expansion goals.

5. Growth mindset

growth-mindset-with-outsourced-accounting-services
Via: www.entrepreneur.com

 

A firm can succeed quickly and effectively when its internal teams are aligned with a growth mindset. However, it is challenging for CPAs to cultivate this approach in the current scenario.

A growth mindset thrives in an atmosphere where employees enjoy adequate self-development opportunities and a healthy work-life balance. Accountants, however, are often overworked and have limited skill development prospects.

Outsourced accounting services help CPAs add capable professionals to their team to handle compliance tasks and free up their in-house accountants. These accountants can shift focus to providing value-based services to clients or indulge in skill development for faster career growth.

When accountants enjoy a healthy work atmosphere, they are automatically aligned to contribute better to the firm’s growth and success. This fuels the creation of a growth mindset that is critical for firms to scale effectively amidst the growing competition.

Additionally, many top outsourced accounting firms guide CPAs on cultivating a growth-based approach within their firms. These firms also provide expertly crafted resources such as checklists and guides to CPAs to maintain a healthy relationship with their offshore team and strike a balance between offshore and in-house workforce.

Conclusion

Thus, outsourcing accounting and bookkeeping services is an indispensable solution for small and mid-sized CPA firms aiming to grow their firm effectively. Additionally, accounting outsourcing offers other benefits such as increasing a firm’s productivity, boosting efficiency, enhanced data security and protection, and much more.

Dedicated Outsourced Accounting Services with QXAS

QXAS is a pioneer accounting outsourcing provider in the USA with a rich 12+ years of experience in the industry. We offer dedicated staffing solutions to accountants and CPA firms and help scale your firm faster.

QXAS boasts a robust team of 1000+ accountants who are skilled and trained extensively on the latest software and the USA accounting norms. These experts work as an extension of our clients’ teams and can seamlessly adapt to different work cultures and complex processes.

The QXAS Advantage

  • AICPA SOC 2 and GDPR compliant accounts outsourcing company in India
  • Affiliated with prestigious accountancy organizations like ICAEW and ACCA
  • Fully compliant with ISO 27001 for information security and ISO 9001 for quality
  • Highly efficient, resolute, and experienced accountants
  • Dedicated engagement models for client success and prosperity

To learn more about our services, call +44 208 146 0808, drop us an email at [email protected], or log on to Outsourced Accounting, Bookkeeping, and Payroll Services | QXAS UK (qxaccounting.com).

Pooja Kshirsagar

With a rich experience of curating content for various industries, Pooja believes in the power of words in marketing and building brands. She enjoys experimenting with different forms of content and is currently on a mission to add value to the accounting industry through her detailed and researched write-ups.

Originally published May 23, 2022 04:05:05, updated May 23 2022

Topics: Accounting, Accounting outsourcing, outsourced accounting services, Outsourcing


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