Accounting Offshoring Guide: Services, Pros, Cons, & Leading Providers

Christopher Rivera     Aug 31, 2023     5359
Accounting Offshoring Guide: Services, Pros, Cons, & Leading Providers

Accounting Offshoring Guide: Services, Pros, Cons, & Leading Providers

Introduction

Offshore accounting has become a crucial aspect of the accounting landscape, offering firms strategic advantages for managing and optimizing their operations. This guide explores the nuances of offshore accounting services, highlighting its various accounting, tax and audit services, the benefits it offers, potential drawbacks, and top providers that can assist you in navigating these waters.

A Concise Guide to Offshore Accounting Services

Accounting offshoring is a complex subject with multiple dimensions to explore. In this guide, we'll break down the key aspects under different headings to help you gain a comprehensive understanding:

Understanding Offshore Accounting

So, what is offshore accounting? Offshore accounting for accounting firms involves hiring skilled professionals in different geographic regions to join your in-house team. These remote staffing team members work exclusively for your accounting firm, adhering to the firms’ policies and procedures.

This model offers the advantage of having dedicated staff members who align with the firm's culture and goals. Offshoring means the work is done outside of the host country. Building an offshore accounting team allows you to take advantage of a global workforce to optimize your firms’ processes and increase revenue.

 

What Accounting Services can be Offshored?

1. Bookkeeping

Includes the organization of financial transactions. This service includes invoices, bills, expenses, and deposits.

Key Skills:

  • Recording transactions (Daily - Weekly - Monthly - Yearly)
  • Payroll Reconciliation
  • Sales Tax Reconciliation
  • Accounts Payable - Account Receivable Management
  • Bank and Credit Reconciliation. (Daily - Weekly - Monthly - Yearly)
  • Reconciling books to third-party records
  • 1099 Form Preparation
  • Computer Literacy - Moderate to Good
  • Quickbooks or Xero Experience
  • Basic Microsoft Excel Literacy

2. Tax Preparation

An offshored tax preparation service involves outsourcing the responsibility of creating and submitting tax returns to a service provider in a different country. Accounting firms forward their financial records and pertinent details to an entity or individual in another nation. Here, skilled experts manage tasks such as tax calculations, form completion, and adherence to the tax rules of the home country.

Key Skills:

  • MS Office Suite, with strength in MS Excel
  • Fundamental Understanding Quickbooks and US Accounting.
  • Individual Tax Preparation (Moderate to Complex)
  • Business Tax Preparation (Moderate to Complex)
  • Multi-State Tax Preparation (Moderate to Complex)
  • Consolidated Tax Returns
  • Year-End Accounting and Adjustments (Moderate)
  • Exempt Organization Tax Preparation (Complex)
  • Trust Tax Preparation (Complex)
  • Basic Gift & Estate Tax Returns Preparation
  • Foreign Forms Preparation - 5471, 5472, 1116, 2555
  • Foreign Partnership Form - 8865,3520
  • Foreign Corporation Form - 1120-F
  • Tax Planning & Tax Research
  • Computer Literacy - Moderate to Good
  • Relevant Tax Software Experience

3. Financial statement preparation

This includes preparing financial statements such as income, balance sheets, and retained earnings. It's one of the last steps in the accounting cycle, utilizing information from previous reports to understand the current financial situation. Financial statements can be filed monthly, quarterly, and yearly depending on the requirement.

Key Skills:

  • Balance sheet reconciliations
  • Month-end journal entries and adjustments
  • Month-end close and financial reporting
  • Review and Preparation of Monthly Bank Reconciliation
  • Month-end financial statements for internal and external users
  • Tax Return Adjustment
  • Payroll / Sales Tax / Loan / Investment Account Reconciliation
  • Administer Concur Time & Expense system
  • Assist with business taxes, registrations, and compliance filings
  • Proficient with Microsoft Office Suite and accounting software
  • MIS Reporting
  • Cashflow Analysis and Reporting
  • KPI Reporting and Analysis (Operational and Core Business KPI)
  • Budgeting and Forecasting.
  • Inter-company Reconciliation and Consolidated financial statements
  • Reconcile Control Accounts

4. Accounts Payable/Receivable (AP/AR)

Accounts payable and receivable services include recording, computing, and classifying the revenue data to ensure a complete financial record. This service is crucial for receiving income and paying expenses.

Key Skills:

  • Accounts Payable Management
  • Processing the Payment and Managing Vendor Credit Period
  • Accounts Receivable Management
  • Processing the Receipt and Managing Debtors Credit Period
  • Regular Interval Reporting of Aging Report
  • Coordination with Team Members / Vendors / Customers
  • Enter missing bill/invoice for payments received
  • Reconciling Balance with Third-Party Confirmation
  • Follow-Ups through Email as well as Calls for Invoice Payment
  • Follow-Ups through Email as well as Calls for Collection of Bills
  • Quickbooks, Bill.com and Excel

5. Payroll services

This includes compiling summaries of employee earnings, taxes, deductions, vacation, and disability. The payroll associate must ensure that employees are paid on time and accurately.

Key Skills:

  • Process client payroll and produce checks, vouchers
  • Input all payroll-related data to meet payroll processing deadlines
  • Process payroll garnishments, vacation time, insurance, 401(k), and other deductions
  • Prepare single and multi-state quarterly and annual payroll tax reconciliations
  • Prepare payroll compliance returns 940 - 941
  • Filing payroll client information
  • Maintenance of payroll software as assigned
  • Maintaining detailed daily time records of work performed
  • Assist with payroll audits
  • Prepare and Submit Report Regularly
  • Proficient in Microsoft Excel & MS Office

6. Year-end accounting

Year-end accounting entails compiling financial statements, addressing overdue invoices, organizing business receipts, cross-referencing payroll and bookkeeping records, and other related tasks at the end of a fiscal year.

Key Skills:

  • Recording transactions (Daily - Weekly - Monthly - Yearly)
  • Bank and Credit Reconciliation. (Daily - Weekly - Monthly - Yearly)
  • Reconciling books to third-party records
  • 1099 Form Preparation
  • Computer Literacy - Moderate to Good
  • Quickbooks or Xero Experience
  • Basic Microsoft Excel Literacy

7. Auditing Services

It includes the examination or inspection of various books of accounts by an auditor, followed by checking the inventory to ensure that everyone follows the correct system of recording transactions.

Key Skills:

  • Perform audits for business operations, finances, and compliance with policies and procedures
  • Oversee audit planning and reporting activities according to established policies
  • Supervise audit team to ensure quality and on-time delivery.
  • Evaluate the performance of audit staff and provide appropriate feedback
  • Assist in risk assessment and mitigation activities
  • Organize training for the audit team for skill development
  • Coordinate with the team to review audit findings
  • Prepare reports with audit findings and recommendations
  • Assist in developing budgets and timelines for upcoming audits
  • Evaluate current audit procedures and recommend improvements
  • Evaluate and enhance internal controls to improve operational efficiency
  • Communicate audit status to management regularly
  • Discuss with management about audit observations, recommendations, and actions to be taken
  • Prepare clear and complete audit work papers and store them in the department repository