WHAT WOULD MY CLIENTS THINK ABOUT OFFSHORING?

According to the experience of our 550+ firm client base, their clients rarely raise any objections in reality. Like most other areas of life, clients are chasing value. Global offshoring is just another way to deliver value to clients. As per our internal survey and feedback from our clients, this is the firm’s client Reaction when they hear about offshoring:-

What are a Typical firm’s client concerns?

      1. You are sending “Local Jobs Offshore”

      2. Poor work quality 

      3. What about the confidentiality of my client's data?

      4. No specific reason but just concerned around perception.

You are sending “Local Jobs Offshore”

Actually, our clients have hired 11% (in 2019) more staff onshore after they have integrated offshore staffing within their firm. This may seem contradictory to what you "believe" however it’s true. For example, when offshoring is integrated into a firm:

    1. Local teams can have more face-time for clients and can deliver high-value and strategic advisory work to clients.

    2. Compliance work margins get expanded with service delivery ahead of time.

Firms going offshore end up with the ability to develop more business, add more value to their clients with higher-value services. As a result, they end up hiring more people locally. So it’s a win-win for the client and the firm.

Poor Work Quality 

This can be addressed in 2 simple ways 

   1. Tell them that you work with a partner who has relationships with 500 other firms like yours. They're known as being a credible resource for the Accounting Industry. Always do your due diligence. Lastly, speak that all your offshore staff is competent & has relevant experience with internationally recognized qualifications.

  2. All work performed at the end of the day is reviewed and verified thoroughly by the onshore team before signing off. So the firm takes complete accountability for the work before sending it off to their client.

What about Data Security?

You should let your client know of  the following points:

1. You are working with one of the most credible partners in the Industry. Who has strong IT & Privacy controls in place.   (Our IT Policy)

2. Show the agreement; and let them know that we have comprehensive confidentiality protection within the agreement.

3. Let them know about the due diligence that you did to advise them to take a video tour of the offices! Give them documentation of due diligence that you have done.

In practice, clients rarely actually ask questions like these, but it’s nice to know you have a solid response if they do.

No Reason But Just Concerned Around Perception.

Some clients have just perception issues and you can address them by explaining the rationale and your vision with offshoring.

Tell them how the world is moving and if you tell them all your iPhones are manufactured in India and China. Still, you considered them most secured. Because it’s designed in California all patents lie here and the company's brand.

Tell them about how you see the industry in 10 years and how other firms are already migrating to offshoring. Then outline where your firm currently sits, and what you need to do; to have the firm's goals obtained within the next 10 years. The more clients understand why you are doing this and how it benefits them, the more on-board they’ll be. The real "aha" moment for clients is when they start experiencing the benefits of your new structure!

What about Disclosure to Clients?

As I mentioned earlier, if there are concerns, try to explain the value and rationale. However, we are giving you 2 sample languages that you can use in your engagement letter.

Try This Sample Engagement Letter Language I (Put Disclaimer)

We may from time to time and depending on the circumstances and nature of the services we are providing, share your confidential information with third-party service providers, some of whom may be cloud-based, but we remain committed to maintaining the confidentiality and security of your information. Accordingly, we maintain internal policies, procedures, and safeguards to protect the confidentiality of your personal information. In addition, we will secure confidentiality terms with all service providers to maintain the confidentiality of your information and will take reasonable precautions to determine that they have appropriate procedures in place to prevent the unauthorized release of your confidential information to others. In the event that we are unable to secure appropriate confidentiality terms with a third-party service provider, you will be asked to provide your consent prior to the sharing of your confidential information with the third-party service provider. Although we will use our best efforts to make the sharing of your information with such third parties secure from unauthorized access, no completely secure system for electronic data transfer exists. As such, by your signature below, you understand that the firm makes no warranty, expressed or implied, on the security of electronic data transfers. 

In connection with this engagement, we may communicate with you or others via email transmission, Mobile Text, Electronic fax or any other means. We take reasonable measures to secure your confidential information in our transmissions. However, like emails or any other communication can be intercepted and read, disclosed, or otherwise used or communicated by an unintended third party, or may not be delivered to each of the parties to whom they are directed and only to such parties, we cannot guarantee or warrant that emails from us will be properly delivered and read-only by the addressee. Therefore, we specifically disclaim and waive any liability or responsibility whatsoever for the interception or unintentional disclosure or communication of email transmissions, or for the unauthorized use or failed delivery of emails transmitted by us in connection with the performance of this engagement. In that regard, you agree that we shall have no liability for any loss or damage to any person or entity resulting from the use of email transmissions, including any consequential, incidental, direct, indirect, or special damages, such as loss of sales or anticipated profits, or disclosure or communication of confidential or proprietary information.

Try This Sample Engagement Letter Language II (Showcasing Benefits)

Like you, we are operating a business and experience the same pressures as many of you. We wish to provide greater value by being more available and proactive with advice and solutions for you and your business, whilst keeping our costs, and therefore fees, under control. We are now employing a number of strategies which we hope will enable us to do this, and remain competitive.

One of those strategies is to hire an offshore professional through a company for some process work to assist. We currently have a relationship with Entigrity which provides qualified professionals, dedicated to our firm under our direct control, working from modern and secured offices in India, trained on our systems. The firm operates to extremely high ethical, privacy and security standards. Entigrity already works with several hundred accounting firms and is a credible partner for this. We have done our due diligence before hiring Entigrity for the same and they follow the highest standard of security and confidentiality. In addition, we have secured confidentiality terms with Entigrity to maintain the confidentiality of your information and have taken precautions to determine that they have appropriate procedures in place to prevent the unauthorized access of your confidential information to others.

These accountants, whilst part of our business, have limited access to our software and client information, which we constantly monitor ensuring all information is secure. Thereby we are able to cost-effectively undertake functions under our close supervision.

AICPA GUIDANCE ON OFFSHORING OR OUTSOURCING

As the acceptance of this offshoring & Outsourcing increased, AICPA saw the need to look into the business model if it was in violation of any of the Professional Standards. 

As a result, AICPA’s Professional Ethics Executive Committee (the Committee) published a document summarizing the considerations deemed significant in the development of two new ethics ruling, Ethics Ruling No. 112 – Use of Third-Party Service Provider to Assist a Member in Providing Professional Services and Ethics Ruling No. 12 - Applicability of General and Technical Standards When Using a Third-Party Service Provider. Following things are clearly set out in it.

Download the Document

No Specific Consent Required: The revised ethics ruling also would clarify that disclosing confidential client information to a third-party service provider for the purpose of providing professional services to clients or for administrative support purposes would not be in violation of rule 301; however, the member would be required to enter into a contractual agreement with the third-party service provider to maintain the confidentiality of the client’s information, and use reasonable care in determining that the third-party service provider has appropriate procedures in place to prevent the unauthorized release of confidential client information 

Offshoring Partner is like any other Third Party Service Provider: Although representatives of federal and certain state governments and the media have focused much attention on the issue of “offshoring” (i.e., outsourcing services outside the United States), the Committee believed it was appropriate to focus on the ethical issues when a member uses the services of a third-party service provider and not address the geopolitical concerns associated with outsourcing. Accordingly, the definition of a third-party service provider applies to service providers located both domestically and abroad, but not to controlled entities or employees located outside of the United States. 

This is our attempt to help you with tools and information based on our experience and client feedback. However, do take your Independent attorney’s opinion on any legal subject matter. We always recommend putting a disclosure in engagement and we have seen 99% of clients have no reservations whatsoever.

Entigrity™ is a trusted offshore staffing partner to over 550+ accountants, CPAs, and tax firms across the US and Canada. Our flexible and transparent hiring model helps firms of all sizes hire staff for accounting, bookkeeping, tax preparation, or any other task for 75% less cost. As a firm 'run by accountants, for the accountants', Entigrity captures the hiring needs of accounting firms most precisely, providing staff that works directly under your control and management, still, you are left with least to worry about compliance, payroll taxes, overheads or any other benefits.