Top Benefits Of Offshore Bookkeeping Services For Growing U.S. CPA Firms

The increasing number of clients of U.S. Certified Public Accounting (CPA) firms also increases operational issues in those firms. The pressure to meet ever-tighter deadlines due to increased client volume and the increasing cost of hiring staff makes it difficult for these firms to grow efficiently. This is why many firms are exploring offshore bookkeeping for U.S. CPA firms.

This article will define offshore bookkeeping services, explain why these services have become popular among U.S. CPA firms, and explain how offshore bookkeeping services allow U.S. CPA firms to grow while maintaining quality and regulatory compliance.

What Are Offshore Bookkeeping Services? 

Offshore bookkeeping services involve CPAs that provide routine accounting and bookkeeping services from an overseas location. Most commonly, the services provided by offshore bookkeepers include:

• Transaction Recording: Bank Reconciliations
• Accounts Payable/Receivable Processing
• Payroll Processing
• Financial Reporting

U.S. CPA firms can utilize cloud-based accounting software such as QuickBooks, Xero, or NetSuite for all offshore bookkeeping accounting firms; therefore, they retain complete access to all accounting data and records. Additionally, the use of cloud-based technology ensures the security of all accounting data.

Why Many Growing CPA Firms are Moving Their Bookkeeping Offshore?

There are several challenges that many accounting firms face today, such as a growing need for skilled employees, increasing costs of doing business, and the ever-increasing requirements of regulatory compliance. In addition to the cost, it is also very difficult to find the right people and retain them to work within your firm’s in-house bookkeeping team.

Because of these challenges, offshore bookkeeping services have emerged as a practical solution for CPA firms looking to grow their businesses. With offshore teams you are able to add capacity rapidly, handle peaks and valleys in your workload, and decrease your overall operating burden without sacrificing quality of service to your customers.

Benefits of Using Offshore Bookkeeping Services for CPA Firms

Below are some of the most significant benefits of using offshore bookkeeping services for many of today’s CPA firms:

Major Reduction in Labor Costs

One of the most important benefits of offshore bookkeeping for CPA firms is lower labor costs. You may be able to realize a reduction in labor costs of 40-70% when you compare this to having an in-house bookkeeper, without other costs associated with employing someone, such as benefits, office space and training.

Quick access to experienced accountants

Offshore bookkeeping companies hire qualified professionals who are experienced with U.S. GAAP, IRS rules and regulations, and all popular accounting software systems. These factors make offshore bookkeeping for U.S. accounting firms very efficient and reliable.

Increased scalability during peak seasons

Peak tax seasons, month-end closings and other periodic peaks in activity can cause a lot of stress for the internal resources of many accounting firms. By utilizing offshore bookkeeping services for your accounting firm, you will be able to scale your workforce up or down depending upon the needs of your company at any given time without being forced to make permanent staffing decisions.

Quicker turnaround times

The difference in time zones between the United States and many countries where offshore bookkeeping services are located will enable your offshore team to work while your U.S. team is offline. This will result in faster completion of tasks and quicker responses to customer inquiries.

Greater accuracy and consistency in the financial records.

Your dedicated offshore team will follow established processes and checklists, resulting in fewer errors and greater consistency in the preparation of your clients’ financial books and records.

Offshore Bookkeeping vs. In-House Hiring: A Comparison

When comparing offshore bookkeeping vs. in-house bookkeepers, offshore solutions clearly offer flexibility and cost efficiency.

Firms that are expanding typically find that using an offshore accounting service provides a higher Return On Investment (ROI) compared to other bookkeeping methods, with fewer issues related to firm-wide management.

Concerns About Offshore Accounting Services for CPA Firms 

Is offshore accounting safe for CPA firms? 

Yes. Reputable offshore bookkeeping services have robust encryption and security for their clients’ data stored in the cloud, VPN access for secure communications, and role-based permissions to prevent unauthorized access to client information; Non-Disclosure Agreements (NDAs) are also provided for protection of all client data.

Can quality be compromised? 

No. The majority of offshore bookkeeping services for CPA firms utilize experienced professionals who are trained in U.S. GAAP and U.S. tax code.

Can communication become a challenge when utilizing offshore bookkeeping services? 

No. Modern offshore bookkeeping teams provide dedicated contacts, overlapping working hours, and regular reporting to ensure that there are no issues or delays associated with communication between the team members and the CPA firm.

How Offshore Bookkeeping Helps CPA Firms Focus on Advisory services?

Time spent on routine accounting functions is taken away from staff members at CPA firms. When routine accounting functions are outsourced to an offshore bookkeeping service, CPA firms can then focus on providing advisory-type services to clients, including tax planning, financial projections, regulatory compliance advice, and business advice.

The primary means through which offshore bookkeeping benefits CPA firms is by allowing the partners and senior accountants to develop deeper relationships with existing clients and therefore increase revenue and profit to the CPA firm.

When Should a CPA Firm Consider Offshore Bookkeeping?

CPA firms may find it necessary to hire offshore accounting staff when:

• Their workload is growing faster than their ability to hire staff.
• Staffing in-house for bookkeeping is affecting profitability.
• Too much of the partners’ time is being spent doing bookkeeping.
• Firms are looking to grow their advisory services.
• They have seasonal surges in work that cause bottlenecks.

Offshore accounting will become a necessity for most firms at the growth stage, not an option.

Choosing the Best Offshore Accounting Firm

When choosing an offshore firm to do accounting for your CPA firm, you should look for:

• The offshore firm’s experience working with U.S. CPA firms
• Knowledge of U.S. accounting and tax rules
• Data security and compliance policies
• Cloud accounting capabilities
• Pricing and Service Level Agreements (SLAs) that are clear
• Account Managers who are dedicated to your firm

A good offshore accounting firm will act like an extension of your firm and not just another vendor.

Offshore Accounting Services—Frequently Asked Questions for CPAs

Is offshore accounting legal in the U.S.?

Yes—if you hire an offshore provider that has experience with U.S. GAAP and IRS rules and regulations.

Can I use my current software for offshore accounting?

Yes—most offshore accounting services have support for QuickBooks, Xero, Sage, and many other large software companies.

Do I need to tell my clients about offshore accounting?

No—unless you want to. Offshore accountants typically work as part of your firm’s team and do not contact your clients unless instructed to do so.

Final Thoughts: Is Offshore Accounting Right for Your CPA Firm? 

Offshore accounting is no longer a “cost-cutting” strategy but a way for CPA firms to grow their business. With improved scalability, lower costs, and better talent, offshore accounting can help keep your CPA firm ahead of competitors while focusing on client needs and providing the best possible service to them.

If your CPA firm is looking for an efficient way to grow, offshore accounting may be the next step in the right direction for your firm.