Is outsourcing accounting a good idea for big CPA and accounting firms?

Outsourcing accounting services has become a popular choice for accounting firms of all sizes, including large firms. There are various advantages to outsourcing accounting services to small to medium-sized businesses. Let’s see how it benefits big accounting and CPA firms.

According to Precedence Research, the worldwide business process outsourcing market was valued at $268.21 billion in 2021 and is expected to reach $576.98 billion by 2030, rising at an 8.9% CAGR between 2022 and 2030.

Here’s why outsourcing accounting services could be a wise decision for large CPA businesses.

• Competitive advantage

Outsourcing accounting services to nations such as India can provide a considerable competitive advantage to large CPA and accounting companies. India offers unrivalled levels of competitiveness and expansion potential.

Wage levels in India are much lower than in the United States and the United Kingdom, allowing large corporations to pursue a cost leadership strategy that significantly decreases costs while maintaining quality levels. This results in a considerable increase in market share.

Furthermore, the 12-hour time difference between the United States and India enables overnight delivery of services, allowing large corporations to operate 24 hours a day. During the day, the primary focus can be on sales and client connection building, while work might be done from delivery facilities in India at night.

This can improve efficiency, productivity, and profitability for large CPA and accounting firms that choose to outsource their accounting services to India.

• Eliminate the lengthy recruitment process

Outsourcing accounting services can give considerable benefits by avoiding the time-consuming recruitment process for large CPA and accounting companies. These organizations usually have a high demand for accounting professionals, making the hiring process time-consuming and costly.

Outsourcing accounting services allows these organizations to have access to a large pool of competent and experienced individuals, minimizing the need for protracted recruitment efforts. This enables these businesses to rapidly and efficiently expand their personnel, particularly during peak periods of demand.

Outsourcing can also help businesses cut recruiting expenses, including advertising, training, and onboarding. Outsourcing allows large CPA and accounting companies to focus on providing high-quality services to their clients while delegating accounting and financial responsibilities to trustworthy and experienced specialists.

• Cost-effective

While accounting services may not be inexpensive, the costs of employing a full-time accounting staff can be far greater when factoring in floor space, salaries, benefits, and equipment. Big CPAs and accounting companies can save money and minimize overhead expenses by outsourcing accounting services.

According to the Deloitte Global Outsourcing Survey, the primary purpose of organizations that employ outsourcing is to reduce costs.

Firms can also save money on training expenses by outsourcing accounting services. The external service provider is in charge of educating staff, freeing up the company’s resources, and cutting costs.

• Concentrate on core business activities.

The ability of big CPA and accounting firms to focus their time and resources on core business operations like financial analysis, auditing, and consulting is one of the main benefits of outsourcing accounting.

Accounting is a difficult and time-consuming process that can take enormous resources, particularly for large businesses.

Outsourcing these tasks to external service providers allows large corporations to redirect their time and resources to key business activities.

• Increased efficiency

Big CPAs and accounting companies that outsource their accounting services to external service providers might benefit from enhanced efficiency and a streamlined accounting process.

External service providers have extensive experience processing large volumes of data and transactions, which can improve the overall efficiency of the accounting process.

• Access to expertise

Another benefit of outsourcing accounting services is the chance to access specialist knowledge.

External service providers have a team of qualified professionals who specialize in all accounting and tax matters.

These professionals can assist large CPA and accounting companies in managing complex financial concerns and ensuring compliance with applicable rules and tax legislation.

• Flexibility

In today’s continuously changing corporate scene, flexibility is essential.

Big CPA and accounting firms must be able to respond swiftly to market shifts, financial uncertainty, and other industry issues.

One of the primary benefits of outsourcing accounting services is the flexibility it provides large organizations in terms of staffing requirements.

Outsourcing accounting services to external service providers enables large corporations to scale their accounting services up or down according to their requirements. For example, during peak business seasons or periods of fast expansion, accounting services may be in high demand. In such cases, large businesses can swiftly scale up their outsourced accounting services to meet rising demand without having to hire more people.

Similarly, during slow economic periods or times of financial instability, businesses can reduce their outsourced accounting services to save money. The ability to alter accounting services to meet current business needs enables large CPA and accounting companies to remain competitive and agile.

Along with these benefits, big enterprises should focus on the following areas when choosing an outsourcing partner:

What should big CPA and accounting firms look for in an outsourced accounting firm?

• Reputation and credibility

Before working with an outsourcing company, you should thoroughly examine its reputation and credibility.

Big CPA and accounting firms should look at the provider’s history, prior performance, and client testimonials to verify that they can provide high-quality accounting services.

• Communication and Reporting

When outsourcing accounting services, clear communication is essential.

To keep the firm informed of developments, the outsourcing provider should have clear communication routes in place and offer regular reports.

Outsourcing accounting services allows large CPA and accounting firms to save money by eliminating new hiring and lowering overhead expenses. It can also streamline operations, increase productivity, and let the company scale up or down as needed. Furthermore, outsourcing enables large corporations to remain competitive and nimble in an ever-changing business environment.

If you manage a large CPA and accounting firm, all you have to do is select the correct outsourcing partner, and you will achieve the best results you could think of!