Is this the time for CPAs to use outsource accounting services?

Many CPAs adopted accounting outsourcing years ago, happily sending their high-volume, time-consuming, commoditized work to offshore CPAs, accountants, and bookkeepers across the globe.

But for others, that is a step too far.  “I will lose control,” cry some; “The data won’t be secure,” state others.  But the truth of the matter is that if it is good enough for the big five firms, it is undoubtedly good enough for the smaller ones.

So, is this now the time for those hanging back to reconsider?

Let’s try to answer this question.

US accounting firms face increasingly complex and rapidly changing tax regulations while focusing on client acquisition and managing a shortage of trained staff.  Wasn’t it always this way?

Travel back to 1997, and for the next ten years, staff recruitment and retention topped the list of issues for almost all firm sizes.  In 2009 as we reached the great recession, the focus moved to try to retain clients.  Move forward to 2012-13, and the scene changes again; the search for new clients emerged as a significant priority together with client retention.

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Acquiring and retaining clients is still one of the top five challenges for accounting firms. The more things change, the more they remain the same.

New Challenges Demand Radical Solutions

So what has changed over the years?

The economy. The market. The competition. The attitude.

Everyone is looking for growth, and therefore attracting and keeping quality staff is the priority.  The talent competition is heating up. And, these issues are exacerbated by the talent shortage in the accounting industry.

Cut to the small firms and sole practitioners.

Think tax season. Yes, the same season that’s essentially the bread and butter season for these firms. If you belong to the small firms’ category, you will know what we are talking about. The mad rush to get taxes prepared, that feeling of constantly getting overwhelmed, sleepless nights, and still not getting the work done.

Couple that with the added challenges of evolving tax legislation courtesy of the pandemic. There aren’t enough hours in the day to keep up with the changes in complex tax laws, mainly when they occur too close to the tax season!!

This is just one facet of the problem.

Another outcome of the pandemic is that overnight, firms irrespective of their size, scale, or scope had to adapt to the New Normal.

If you look at the image above, you will see that the overarching theme is a dramatic change in how accounting firms work. Take, for example, the need to strengthen cybersecurity. This step not only involves deploying a suitable security solution but also knowing about the challenges your accounting firm faces in a world rife with cyberattacks and then developing a strategy to counter such attacks.

This requires expertise and tangible resource investment. As can be imagined, not all firms have these resources.

At a time when firms are trying to save on overheads, certain activities take a back seat. And these are the kind of activities that go a long way in addressing their growth concerns.

But it doesn’t have to be this way.

Outsource Accounting Services are the Key

Considering all the pain points, the idea of outsourcing just a little (or a significant portion) of your work might not be such a bad idea.

If you look at your workload and identify the parts taking a lot out of your time, they are likely the high volume things that aren’t paying their way.  So imagine that you didn’t have to do those anymore – would you have the time to read up on the latest tax regulation?

Or how would your staff feel if they didn’t have to process those hundreds of tax returns but could work on developing that new client you have just taken on to make sure they want to stay with you? Or what about those time-consuming compliance tasks like accounting. Outsourced accounting services will free up a lot of time spent in managing extremely commoditized services like accounting, bookkeeping, tax preparation, payroll and more.

Choosing the Best Outsourced Accounting Services

Outsourcing is a big step, but if you check the outsourcer’s credentials, you can mitigate the risk.

How about giving them a sample job to do that you’ve done yourself?  Now you can get an objective view of their work.

Check their data security standards and how they would handle your precious data.

What about turnaround time?  Do they work your hours or their own?  Or would the hours they work mean you could get work processed even quicker?

Do they use the same accounting software?  Do they have people who have worked in US accounting and taxation and maintain a regular training program?

Please make sure they are happy with ad hoc work and that you don’t have to commit to purchasing hundreds of hours of their time each month (unless, of course, you want to).

And check what they can do – do they have the capacity to look after all of your bookkeeping for you, or are they just interested in your tax return processing?

Outsourcing accounting is straightforward once the company integration takes place, and you will very soon wonder why you didn’t do it years ago.

So if you are a small practice that is desperate to grow and creaking at the seams, why not take the first step and talk to a reputable outsourcer.

Outsourced Accounting Firms are the Way Forward

What is it that accounting firms need apart from a bit of breathing space? They want to free up resources to explore other avenues that can grow the firm’s profile amongst clients.

Here’s the rub. Clients need a bouquet of services from their firms rather than just specific services. More importantly, they want their firms to become an advisor rather than just pure play accounting firms. But firms don’t have the time to pursue these avenues and find it difficult to manage client expectations. There is another elephant in the room. The pandemic has impacted businesses, and there is a pricing pressure wherein clients expect accounting firms to bring down the pricing for their services or provide more value for money in the form of more assistance or strategic advice.

This means firms need to build capacity quickly but still control costs and work with the best accountants. They can’t get caught in a lengthy recruitment cycle and still look at their bottom line to check whether they can afford the accountant or not.

This will impact growth.

A far better option is to outsource accounting to work with offshore accountants who are well-versed in US accounting standards, experienced, and available at really affordable rates. They are not on your firm’s rolls, and you can add or scale up or scale down as per your needs.

More than the cost-benefit, you get your hands on a vast talent pool of experienced accountants who can work as your very own extended team, and they can work as individual contributors. So your hands aren’t tied with training or managing the offshored accountants.

That’s a significant relief with tangible returns.

So, outsource accounting services!