Offshore Accounting Services: Benefits, Challenges, and Top Providers for 2024

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, benefits, 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 financial situation. Depending on the requirement, financial statements can be filed monthly, quarterly, and yearly. 

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 an auditor examining or inspecting various books of accounts and 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

Pros of Offshore Accounting Services:

• Cultural Alignment: An offshore accountant can be integrated into your firm's culture, leading to better collaboration and communication.
• Data Security: Since offshore accounting staff works exclusively for your firm, you have greater control over data security measures.
• Flexibility: You can scale your offshore accounting team according to your firm's evolving needs by utilizing offshore accounting services.
• No Infrastructure Costs: Accounting firms can optimize resource allocation and prioritize strategic initiatives over infrastructure expenses.
• Provider covers benefit costs: Firms don’t need to pay for benefits such as health insurance, retirement plans, or paid leave as the offshore accounting service partner covers this.
• Save on HR & Overhead costs: Offshore staffing for accounting firms significantly trims HR costs—recruitment, training, and overheads—enabling accounting firms to redirect savings into more impactful investments.
• Easy Scalability: offshore accounting services allow accounting firms to scale quickly depending on seasonal increases or decreases of work.
• Reduce Workload on Onshore Team: By delegating routine and time-consuming tasks to offshore accountants, the onshore team can concentrate on strategic and high-value activities, leading to innovation and creativity within the core team. Hiring and retaining staff in CPA firms also increases as the onshore teams burden reduces.

Cons of Offshore Accounting Services:

• Communication Hurdles: Offshore accounting can encounter obstacles in communication due to variations in language or time zones, making effective collaboration and communication more challenging.
• Quality Control Challenges: Offshore Accounting Service providers might have different quality benchmarks than local counterparts, leading to potential issues in maintaining consistent quality.
• Security Apprehensions: Offshore accounting services raises security apprehensions, especially when handling confidential financial data. Ensuring that offshore providers have robust security protocols becomes imperative. Before contracting an offshore accounting partner, review their data security protocols and verify they are ISO, SOC certified, and GDPR compliant. 
• Legal and Regulatory Compliance: There may be instances when overseas accountants are unaware of local legal and regulatory compliance. However, a reputable offshoring partner will ensure their staff are trained in U.S. accounting practices, with many holding international qualifications such as CPA and ACCA.

Top Offshore Accounting Service Providers:

1. Entigrity:

As a leading solutions provider for more than 850 CPAs and Accounting firms, Entigrity specializes in building offshore teams, offering M&A advisory, coaching, and partnering with firms to expand their service offerings throughout the US, CA, and UK. With a dedicated team of more than 3,000 professionals in India and the Philippines, we stand at the forefront of offshore staffing solutions; alongside our comprehensive coaching, M&A advisory, and strategic partnerships have positioned us as the leading force in the accounting industry. We are also trusted by 40 of the top 200 accounting firms, making us a preferred choice in the industry. Our services begin at just $11 per hour, making offshore staffing an affordable and practical solution for firms of all sizes. Entigrity has partnered with over 200 CFOs and businesses, aiding them in the creation of offshore teams that span a wide array of specialties such as finance, accounting, legal, digital marketing, IT, content creation, engineering, architecture, HR, recruitment, BPO, and creative fields like multimedia, animation, and graphic design.

2. QX Global Group:

QX Global Group, headquartered in North Yorkshire, UK, offers worldwide comprehensive consulting, digital transformation, and business process management services. Its diverse service portfolio spans offshore, nearshore, and onshore operations across six delivery centers in two countries.  

3. TOA Global:

TOA Global, based in the Philippines, provides accounting staffing solutions to firms in Australia, New Zealand, Canada, and the US. With over a decade of experience, it offers dedicated client support and is one of the largest employers in the accounting industry in the Philippines.  

4. Xpitax:

Xpitax is a renowned accounting outsourcing company that began operations in 2004. They cater to the needs of small and medium-sized accounting firms globally, providing comprehensive accounting solutions. Xpitax's services include tax return preparation, accounts payable/receivable, financial statement preparation, and management reporting. With a team of over 200 experienced professionals, Xpitax has built a strong reputation for delivering quality services and exceeding client expectations.  

5. Paperchase:

Paperchase Accountancy, headquartered in New York, specializes in catering to restaurants and hospitality brands globally. It utilizes cutting-edge accounting software and offers a range of financial services. 

6. Taxfyle:

Taxfyle is a prominent offshore accounting service provider that entered the accounting market in 2015. They specialize in delivering tax preparation and advisory services to accounting firms, leveraging their skilled team of professionals. Taxfyle’s offerings include individual and business tax preparation and advisory services to accounting firms, leveraging their skilled team of professionals.  

7. Sureprep:

Sureprep is a trusted name in the offshore accounting industry, having started its operations in 2002. They focus on serving small and medium-sized accounting firms worldwide by offering efficient tax preparation and outsourcing solutions. Their solutions are designed to streamline and automate the tax preparation process, improving efficiency and accuracy. SurePrep's offerings include tools for data import, document organization, tax work paper preparation, and electronic filing. Sureprep's services encompass individual and business tax return preparation, tax planning, and audit support. With a client base of over 1,000 accounting firms, Sureprep has established itself as a reliable partner in meeting tax compliance and preparation needs.

Conclusion

In this comprehensive guide, we've explored the world of offshore accounting, covering its types, advantages, disadvantages, and top service providers. By understanding the nuances of offshore accounting, you can make informed decisions that align with your financial goals and needs.

FAQs

1. Is confidentiality guaranteed with offshore accounts? 
While offshore jurisdictions offer enhanced privacy, it's important to understand the extent of confidentiality within each jurisdiction.

2. How do I choose the right offshore accounting service provider? 
Consider factors such as the provider's reputation, experience, range of services, and the specific needs of your situation.

3. How to Build an Offshore Accounting Team?
To build an offshore accounting team, identify your needs and tasks, select a suitable location, and find a reliable outsourcing partner. Clearly define roles, onboard talent, and establish strong communication using technology tools. Ensure data security, monitor performance through KPIs, and consider legal and cultural factors. Continuously improve the team's efficiency and effectiveness through feedback and adjustments.

4. How to Overcome Common Challenges in Offshore Accounting?
To overcome common challenges in offshore accounting, emphasize clear communication, employ robust technology for secure data sharing, and establish well-defined processes.

Foster a strong team dynamic through regular virtual meetings and cultural sensitivity training. Address time zone differences through flexible scheduling and maintain a detailed documentation system. Regularly evaluate performance metrics and adapt strategies based on feedback for continuous improvement.

5. When Should You Consider Offshoring Your Accounting Tasks?
You should consider offshoring your accounting tasks when you're looking to reduce costs while maintaining quality, require specialized expertise not locally available, need to handle increased workloads efficiently, want to focus on core business functions, and are willing to invest time in setting up and managing an offshore team while ensuring effective communication and data security measures.

In addition to the above mentioned points it's also important to know the right time to build your offshore team. The summertime is the most recommended time to begin building your offshore team.

Entigrity™ is a reliable offshore staffing partner for 850+ accounting and CPA firms, 200+ CFOs & businesses across the US, Canada, and the UK. With a flexible and transparent model, the company enables firms of all sizes to acquire skilled accounting, bookkeeping, and tax preparation staff. As a pioneer in offshore accounting, Entigrity ensures precise alignment with the hiring needs of accounting firms, providing staff under your control and management and minimizing concerns about compliance, payroll taxes, overheads, or benefits. Trusted by 40+ of the top 200 US accounting firms, we specialize in supplying highly skilled personnel from India. We have 39 global offices across India. We are GDPR compliant, ISO 27001:2013, and SOC 2 Type II certified. We are now "Great Place to Work Certified™," "KPO Organization of the Year," and "Dream Companies to Work For" among accounting industries. Entigrity is also recognized as a platinum partner by the Institute of Management Accountants (IMA). The company is strategically partnered with Boomer, a BDO Alliance USA and Abacus Alliance member.   

Christopher Rivera

Director, Client Relations

Christopher Rivera, Chris serves as a Director of Client Relations and Business Development at Entigrity. He is an expert at leading and managing teams actively from the front. His expertise in sales, training, coaching, mentoring and influencing combined with his competitive nature makes him a strong leader.  Chris has traveled through the length and width of the country and has spoken with more than five thousand CPAs, understanding their challenges and limitations. On the grounds of that, he can now easily provide opinions and solutions that can be immensely helpful to the professionals. He has also represented Entigrity at a number of major accounting conferences and networking events.