5 Key Reasons CPAs Should Consider Outsourcing Accounting

Recent years have been mixed for accountants and CPAs. While easing pandemic restrictions gave firms a chance to scale, the industry’s ongoing staffing shortages are stalling growth. To overcome these challenges, many CPAs are turning to outsourcing accounting as a reliable solution.

Outsourcing accounting offers firms a cost-effective way to access skilled professionals offshore and expand their teams without the hassle of local hiring. As competition grows, inflation rises, and work models shift, outsourcing is proving to be the future of staffing for accounting firms.

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

1. Hassle-free staffing

Small CPA firms are most affected by the growing talent shortage in the US accounting industry. While finding qualified accountants is challenging, 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 straining CPAs and restricting their growth in the right direction.

 

Accounting outsourcing companies understand the US accounting industry’s staffing woes and craft customized solutions to make staffing easy and hassle-free. Outsourced accountants work as an extension of 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 little 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 rising cost of services and increasing client expectations are putting pressure on accounting firms to deliver more for less. According to the 2022 Accounting Today survey, downward price pressure on services remains one of the top challenges for firms.

In this scenario, maintaining profitability is a growing concern for CPA firms. The most effective way to sustain margins is by reducing operational costs—and outsourcing accounting services offers a proven solution.

With a talent shortage driving up accountant salaries, hiring in-house is becoming increasingly expensive. Recruitment costs, employee benefits, office infrastructure, and training further add to the financial burden.

Outsourced accounting firms help CPAs access skilled offshore accountants at a fraction of onshore hiring costs. Additionally, the outsourcing provider handles salaries, infrastructure, and day-to-day management, allowing firms to operate more efficiently.

By outsourcing, CPA firms can significantly lower operational expenses while maintaining high-quality service, making it easier to navigate pricing pressures and remain competitive.

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.

 

The 2022 Accounting Today survey has revealed that CPA firms typically struggle with integrating the latest technology into their processes. In fact, this is 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. This allows accounting firms to maximize the 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 facilitate a technological revolution within their firms.

4. Economies of scale

Every year, new accountants and CPA firms enter the market, growing the competition exponentially. Scaling amidst this competition is a challenge, particularly for small accounting firms.

A lot of accountants’ time goes into managing their firms’ compliance and administrative tasks. These firms’ core focus is mostly on sustaining and surviving in this competition, and 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

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 teams 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 in 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, enhancing data security and protection, and much more.

Outsourcing Accounting 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 client’s teams and can seamlessly adapt to different work cultures and complex processes.

The QXAS Advantage

• AICPA SOC 2 compliant accounts outsourcing company in India
• ACCA-approved employer
• 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