HOW TO ASSESS AND SELECT THE PERFECT ACCOUNTING OFFSHORING PARTNER

In the present globalized environment, offshoring has become a key strategic tool for today’s CPA firms. Their biggest challenge has been the crunch of less accounting talent in the market. Conclusive research has shown that approximately 40% of accounting firms choose outsourced accounting.

An offshore outsourcing partnership is considered more of a long-term marriage between two businesses rather than a temporary solution. It requires total commitment for the “marriage” to succeed!

By embracing outsourced accounting staffing, accounting firms can navigate through vast oceans of opportunities that most have been turning away. Outsourcing involves delegating specific tasks to external service providers from other countries. These tasks include bookkeeping, tax preparation, payroll processing, and financial analysis.

Outsourcing benefits firms in various ways, such as access to specialized expertise, more productivity by all staff members, reducing the average costs of hiring without compromising quality. 

Every great strategy has several challenges, and so does offshore outsourcing. Communication barriers, cultural differences, data security risks, and confidentiality concerns are among the hurdles accounting firms may encounter while venturing into offshore outsourcing. 

Despite these hurdles and challenges, the potential benefits of offshore outsourcing outweigh the risks. This is the reason that offshore outsourcing is a compelling option for firms seeking to optimize their operations and expand their capabilities.

Therefore, remember that choosing the right offshore team for accounting outsourcing is a hard nut to crack. There are several horror stories: over-promising, under-staffing, security breaches, culture shock, and many other reasons that may convert a dream of profits into a nightmare of cost overruns and software that falls far short of what is required to achieve the intended competitive edge.

During the process of outsourcing accounting, give it your full attention and careful consideration, as it can significantly impact the success of your offshore outsourcing strategy. 

Here in this blog, we are providing you with a comprehensive guide to help you navigate the selection process:

1. Expertise and Specialization:

Look for an outsourced accounting partner with the expertise and specialization you require, whether it's tax preparation, bookkeeping, audit, or financial analysis. The accounting professional must know global accounting standards and how to navigate the offshore market. 

The expertise ensures that tasks such as audit support, bookkeeping, accounting, and tax preparation are executed with accuracy and a deep understanding.

2. Company Background:

This is a general phrase for all the additional details you might be able to learn from the offshore company's website or other open sources, such as the number of years the company has been in operation, client references, the organization's project management process, facilities, and so forth.

With thorough research, choose the company that comes out well in the following given aspects:

A) Transparency:

Transparency refers to the extent to which a company shares information on its history, operations, financial status, policies, practices, and decision-making processes with clients. Since clear communication is at the heart of transparency, any difficulty answering your questions and any hesitations or ambiguity raise red flags during the hiring process.

B) Employees:

When you outsource, you don't have to worry about recruiting and supervising personnel, so you receive the knowledge without the headaches. However, it is still crucial to look at the caliber of candidates willing to work on your project. Here, you can request the resumes of vital employees and ask high-level questions such as work experience, level of education, and so on.

C) Communication:

Success in outsourcing is based on effective communication. Unless your outsourcing company has excellent communication skills in management and methodology, it can be challenging to communicate with accountants on the other side of the wall.

D) Digital infrastructure:

It is now easy to exchange information even if your partner is located overseas, all thanks to innovations in outsourcing and the growth of cloud computing. To determine if a company can effectively complete a job, you should also see if they have the necessary tools to safeguard sensitive information. Companies that outsource don't only invest in their staff members. They also make sure to use the most recent accounting tools and technologies to stay current and protect their client's confidentiality and data security.  

E) References:

Finally, references should be viewed as a chance to learn more about the company's background. Referrals are success stories, so don't hesitate to investigate further.

3. Successful Track Record:

Ensure that your outsourcing partner has a proven track record. It is crucial to gauge their performance and professionalism. You can assess the track records through case studies and testimonials. This will give you an idea of the offshore partner's skills and approach to challenges.

Entigrity is a leading accounting offshoring partner trusted by many. Client success stories and online reviews prove the company’s track record.

4. Scalability:

Offshore accounting offers flexibility. They allow CPA firms to easily adjust the number of accountants they employ based on their specific needs and budget. This means businesses can scale their accounting support up or down as required without the hassle of managing a full in-house team. It's like having the right number of helping hands when needed without any extra costs or complications.

5. Service Level Agreement:

Ensure that your offshore accounting partner offers a comprehensive service level agreement (SLA), which acts as a detailed contract outlining the scope of services, expectations, and responsibilities. This agreement is crucial to establish clear communication and understanding between you and your offshore partner. By defining the terms and conditions upfront, including the quality of service, turnaround times, and reporting mechanisms, you can minimize misunderstandings and mitigate potential conflicts in the future.

6. Data Security Measures:

Data security measures are really important to consider while embracing outsourced or offshore accounting. Make sure that the company has robust security measures that can protect your financial information and data. Look for certification and laws like ISO 27001, GDPR, and SOC 2 Type 2.

7. Quality Assurance:

Inquire about the company's quality control processes. Verify certifications like ISO 9001 as they represent compliance with global standards for accuracy and efficiency in their daily operations.

Conclusion:

Building an offshore team is excellent for getting the maximum benefits of outsourcing for your accounting firm. It requires deep research and careful consideration of the firm's goals and agenda. Considering the above factors helps you make an informed decision that benefits your accounting firm's overall success.

For the best offshore accounting solutions for your accounting firms, consider Entigrity, one of the top offshore staffing companies. The company presently serves 800+ accounting and CPA firms across the US, Canada, and the UK.

FAQs

Q: How can I assess the scalability of an outsourced accounting partner?
Ans: Ask about their ability to handle increased workload, adapt to changing requirements, and provide additional resources.

Q: What are the typical turnaround times for outsourced accounting tasks?
Ans:  Turnaround times depend on the complexity of the tasks. However, reliable partners offer clear timelines and agreed-upon deadlines.

Q: How do you ensure data security and privacy while outsourcing accounting services?
Ans:  Always look for an offshore outsourcing company that prioritizes data security and confidentiality. Check if they have robust security measures, such as ISO 27001 certification and GDPR and SOC 2 Type 2 compliance.

Entigrity™ is a reliable offshore staffing partner for 800+ accounting and CPA firms, 150+ 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 45+ 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. 

Jacob Scott, CPA

Member, Advisory Board

Jacob Scott is a CPA with over 20 years of experience in the area of accounting & finance and has worked as a Senior Audit Associate at EY. Jacob drives the financial planning of the company by analyzing its performance and risks. He retains constant awareness of the company’s financial position and acts to prevent problems. He also sets up and oversees the company’s finance IT system as well as sets targets for and supervise all accounting and finance personnel (management accountants, internal auditors, etc.) Besides overseeing all audit and internal control operations, Jacob develops the corporate fundraising strategy and manage relationships with partners and investors. His roles also include preparing timely and detailed reports on financial performance on a quarterly and annual basis and conducting analysis to make forecasts and report to upper executives. He ensures adherence to financial laws and guidelines.  He has a keen interest in activities and societies, industry tours, educational seminars, cultural activities, sports, and most importantly attending conferences.