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Topics: Accounting, Industry, Outsourcing

How CPAs Can Outsource Accounting – Accounting Outsourcing Process for Greenhorns

5 MIN READ | Posted on February 02, 2022
Written By Shweta Pandey

Outsource Accounting - QXAS

This article is for CPA firms who want to outsource accounting but aren’t really clear on the methodology or process. There is no doubt that if your firm wants to be more competitive in the accounting industry, especially at a time when it’s ravaged by the pandemic and suffering from growth issues, working with outsourced accountants is the way forward.

The Benefits of Outsourcing Accounting

There are plenty of advantages of outsourced accounting. The first is obviously the cost advantage, and it is massive. If you approach it right, outsourcing can help you bring down your operational cost by more than 50%. The idea here is to outsource your low-margin, labor-intensive compliance work and boost your margins by saving on internal-employee and infrastructure costs. 

The accountants on your firm’s payroll can be leveraged in high-margin, more complex tasks that can further boost revenue. 

This is like a win-win. 

Another significant advantage is that your firm can scale its resources quickly. Take for example the tax season. This is when you know more work is coming your way and you might not have the capacity to do enough and make the season count for your firm. Tax preparation services are the bread and butter for most CPAs and you cannot miss out. 

You have three options here. Look to sign up seasonal talent for preparing taxes, hire tax experts for the long term or outsource tax preparation. The first and second are capital-intensive options, while the last will actually bring down your costs and time to hire. With the first two options, you will be caught in a long recruitment cycle that might or might not end with your firm being able to hire the experts you want. 

On the other hand, accountant outsourcing will ensure you can access a team of professionals at a far cheaper rate than in-house employees, and that too very quickly. 

This accelerates your ability to take on more work and not miss the bus. 

Whether outsourcing the length and breadth of accounting activities or just pure compliance work such as individual tax preparation, payroll etc, outsourcing will deliver sustainable and tangible ROI.

The Outsourcing Process – For Beginners

If your firm hasn’t outsourced before, it is natural to feel a little anxious about getting the process right. It begins with hunting for the right accounting outsourcing partner and ends with this partner delivering on your tangible expectations.

There is a reason why we have said ‘partner’. This is because your accounting outsourcing provider is your growth enabler, not just an outsourcing provider. So, it makes sense to spend some time searching for the ideal partner. 

What are the qualities of an ideal outsourcing partner that provides outsourced accounting services for CPAs?

  • Experience in US accounting standards
  • Technical know-how – proficiency in commonly used accounting software and its latest versions is critical for identifying the best from the rest. 
  • Accreditations – The focus here should be on the data security aspects and SOC 2 Type II and GDPR compliance, which tells you that the firm is as concerned about data security as you are. 
  • The qualifications of the outsourced accountants are also a key parameter, and you need to add offshore team members who can work independently, without any major supervision.
  • Ideally, a Full-time Equivalent (FTE) model is the right pick, wherein the outsourced accounting firm like yours gets the benefit of accountants who only work on your projects. 

The search for the right provider starts within your circle of peers. If you know an accounting firm owner, who has worked with a firm specializing in accounting, get their contact details. Talk to them, evaluate them on the parameters/qualities mentioned above and make your choice. That’s it. Job done.

But if you don’t have anyone who provides a reference, your job becomes a tad more complicated. It would be best if you searched for these providers on the internet by entering search terms such as ‘best accounting outsourcing provider’, ‘outsourcing providers for CPAs’, and so on and so forth. 

You will have to go through the search engine results pages, prepare a list of accounting outsourcing firms and then start going through their website and setting up calls with their executives. Keep pruning your list as you get more information about their company profile. 

At the end of this exercise, you will be left with just one or two providers who you believe are worthy of your work. 

Outsourcing Pitfalls

Sometimes, CPA firms falter and don’t end up with the right partner or make the most of outsourced accounting services because they get into it without any plan. Outsourcing shouldn’t be an act of desperation but should be well thought out and aligned with your business’s growth efforts. If you approach it without thinking things through, it might not deliver the necessary returns.

Secondly, outsourcing delivers tremendous cost benefits, but you need to think about the other advantages of outsourcing and what it is that will make your firm grow. Think beyond the cost advantage. Think whether you can outsource a complete service to the accounts outsourcing provider? Think how that can benefit your firm by freeing up the time of your in-house resources, which can then be invested elsewhere. 

The possibilities are limitless; the question is, do you have a long-term approach to outsourcing? This will ensure you can maximize benefits and avoid all pitfalls.

Conclusion

As a beginner, accounting outsourcing and the prospect of working with an offshore provider of accounting services will seem like an iffy exercise. Therefore, it is advised that you conduct a thorough recce of the outsourcing landscape and talk to CPAs who are already outsourcing accounting services. A great option will be to ask an outsourcing provider for client references and speak to them about the services quality of the provider and the benefits they experience. 

This small step will help you understand whether the outsourcing provider is positioned to meet your needs. 

Book a Consultation

We hope you enjoyed reading this blog. If you want our team to help you resolve talent gaps, reduce costs and transform your business operations, just book a call.

Shweta Pandey

Creative and enthusiastic, Shweta turned into a marketer for her independent ventures long before she formally joined the realms of QXAS marketing team. Alumni of the University of Delhi and MICA - school of ideas, and with experience in creating content for multiple niches, Shweta now creates content and strategies to chart the changing landscape of the accounting industry.

Originally published Feb 02, 2022 11:02:30, updated Feb 02 2022

Topics: Accounting, Industry, Outsourcing


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