When Is the Right Time for CPAs To Outsource Accounting Services?

Outsourcing is a huge decision for small and mid-sized accounting firms. The accounting industry in the USA has been battling numerous challenges over the years, including massive staff shortages, rising inflation, and the ever-growing competition. To tackle these challenges and ensure a steady stream of revenue and profits, CPA firms often turn to outsourced accounting services.

Accounting outsourcing is a proven way for CPA firms to reduce their operational costs and drive higher profits. For most firms, the journey to outsourcing their accounting needs starts with the need to improve their firm’s capacity to scale during the busy season.

Accounting outsourcing companies understand the industry’s growing challenges and specialize in providing customized staffing solutions. Not just that, accounting outsourcing firms help CPAs achieve their growth goals by taking complex compliance tasks off their plates.

There are several reasons why accounting firms should outsource accounting services. For each firm, the reason to outsource may vary according to the volume of work, existing services, capacity, and growth goals. But it may be challenging for accountants and CPAs to determine the right time to outsource their accounting needs.

If you are wondering whether it is the right time for your firm to consider accounting business process outsourcing, here are a few points to consider.

Accounting Outsourcing in the Post-Pandemic World – A Big YES!

The Covid-19 pandemic put a massive strain on the US accounting industry and constrained the growth of several CPA firms. To reverse these adverse effects and achieve their growth goals will be a huge challenge for small-sized firms.

In the post-pandemic world, accountants and CPAs must focus on bringing down their firm’s operational costs to sustain the downward price pressure and make profits. However, given the current scenario wherein onshore hiring and staff retention is highly challenging and expensive, outsourcing seems the most viable solution.

Outsourced accounting services help CPAs beat their staffing woes permanently with easy, efficient, and cost-effective offshore hiring. Outsourcing providers hire talented resources from top outsourcing destinations like India and train them extensively to take over your firm’s cumbersome compliance processes, thus freeing up your internal team.

To counter all the above challenges and ensure a profitable future for their firms, CPAs must sincerely consider outsourcing their accounting requirements. Some of the top outsourced accounting firms provide additional support to small-sized CPAs to grow and prosper quickly.

Also read: Accounting Outsourcing: The Strategy CPA Firms Need in 2022

Critical Indicators of the Right Time to Outsource for Accounting Firms

1. Quick Team Scalability is a Must-Do

Accounting outsourcing with a reliable provider can make you forget your team scalability concerns forever. Accounting outsourcing companies give CPAs exclusive access to offshore experts, who are specialists at running compliance functions. Based on their requirements, accountants and CPAs can hire one or multiple resources to manage their workload.

In addition, outsourcing also offers the benefit of uninterrupted resource availability. This means that CPAs no longer have to worry about staff vacations and unexpected absences or resignations during the peak season.

2. Expansion of Service Portfolio

Post the pandemic, it has become more necessary than ever for accounting firms to expand their portfolio beyond the basic bread and butter services. Clients appreciate finding a varied set of services under one roof instead of partnering with multiple providers.

Apart from basic accounting, bookkeeping, audit, and taxes, services such as advisory and practice transformation are in huge demand among clients. While these services sound lucrative, adding them to one’s portfolio is not easy. New services take more time and additional resources to find ground among the target audience.

Outsourced accounting services play a crucial role in helping firms expand their service portfolio. When you have a dedicated offshore team taking care of your core tasks, your in-house team can spare time on value-based services, thus enabling CPAs to add new services to their existing offerings.

Also read: Virtual Accounting Versus Outsourced Accounting Services

3. Client Acquisition and Retention

Small and mid-sized firms actively look to grow their clientele to increase their revenue and earn higher profits. However, attracting new clients is a challenge if your firm doesn’t offer a complete gamut of services.

As discussed above, adding more services requires firms to build more capacity. This is where accounting business process outsourcing can be crucial.

CPAs can quickly expand their team with accounting outsourcing without incurring huge costs. When you have a vast team to take care of your basic and value-based services, acquiring more clients and retaining the existing ones becomes easy.

4. Work Volume Surpasses Resource Capacity

The staffing shortages in the US accounting industry need no introduction. Fewer resources mean that accountants are often overworked beyond their capacity. This is the primary reason CPA firms struggle to meet deadlines and provide value-based services.

With outsourced accounting services, accounting firms do not have to spend time searching for skilled resources. Top outsourcing providers enable easy and hassle-free hiring of offshore resources, thus saving critical time and facilitating a faster turnaround.

Moreover, with outsourced accountants, CPAs can segregate their tasks among their in-house team and the offshore staff, thus paving the way for better work management.

Also read: 5 Tips for Using a Virtual Accounting Staff for Your CPA Firm

5. Integrating Latest Infrastructure and Tools

Small and mid-sized accounting firms do not have the financial capacity to regularly purchase the latest software or improve infrastructure. This is another area that accounting outsourcing companies can help with.

Top accounting outsourcing providers work with the latest technology and train their offshore experts on the latest accounting and bookkeeping software. Thus, CPA firms can integrate the latest technology and infrastructure into their processes without incurring massive costs.

With outsourced accounting services, your processes can become faster and error-free and help boost your firm’s efficiency.

Conclusion

Accounting outsourcing is the need of the hour for small and mid-sized accounting firms to achieve their growth goals in the post-pandemic world. In fact, outsourcing could be the future of staffing for the US accounting industry.

There is no established thumb rule to determine the right time to outsource. However, accountants and CPAs should consider outsourcing their accounting needs in the post-pandemic world to build capacity and scale quickly.

Besides the post-pandemic challenges, accountants and CPAs must assess their goals and evaluate their firm’s capacity to make the right outsourcing decision. If your firm has been struggling to sustain itself in the current scenario, let alone make profits, it may be the right time for you to consider outsourcing.

However, to get the most out of outsourcing, it is essential that CPAs team up with a top outsourced accounting firm. Accounting outsourcing can be a turning point for CPA firms if done the right way.