WHAT WOULD MY CLIENTS THINK ABOUT OFFSHORING?

Most accounting firms are open to offshore hiring for sure, but they still have concerns like what my client would think?

According to the experience of our 725+ firm client base, their clients rarely raise any objections. Like most other areas of life, clients are chasing value. Global offshore staffing is just another way to deliver value to clients. As per our internal survey and feedback from our clients, this is how firms clients react when they hear that the firm is utilizing offshore accounting staff:

At Entigrity, we have devised the innovative 9091 Rule, which has been a game-changer for our clients. This rule encapsulates the needs and preferences of a staggering 90% of our clientele, making it a highly effective and reliable approach.

90% of Firms Prioritize Client-Centric Excellence:

90% of our clients prioritize the value they receive from our services rather than the specific methods we employ. They are primarily concerned with the quality of our work, the benefits they gain, and the superiority of our services.

9% of clients have concerns:

What are the usual concerns raised by a firm's client? 

• What happens to my data?

• You are sending local jobs offshore. 

• What kind of staff are you hiring, and what quality of the work? 

1% is not ready to listen:

You can either not let that client work allocated to an offshore team or tell your client that offshoring is strategically important to your firm, and you will be required to pursue it.

Here are 3 Steps Approach to Address Client Concerns:

Acknowledge Firm’s Concerns:

• First, acknowledge and handle their concerns seriously.

• Don’t dismiss their concern outright. 

Explaining the Rationale:

• Clients need to understand their local staffing challenges, such as: not being able to find staff, high-cost of salaries and benefits, and challenges with retention.

• Firms have hired more staff onshore after integrating offshore staffing. “Offshoring helps our clients onboard 15% (in 2022) more staff onshore after they have integrated offshore staffing within their firm.” It may seem contradictory, but it's true. This allows local teams more face time with clients and delivers high-value and strategic advisory work. Compliance work margins also expand with service delivery ahead of time, allowing firms to develop more business and add more value to their clients with higher-value services.

Explaining the Value:

• Tell clients that you work with a partner who has relationships with 725+ other firms. Explain the due diligence process you have undertaken before selecting us as your offshoring partner.

• Let clients know that you work with one of the most credible partners in the industry, which has strong IT and privacy controls in place. Show them the agreement and explain that you have comprehensive confidentiality protection. Encourage clients to take a video tour of the offices.

•  Assure clients that all offshore staff is competent and has relevant experience with internationally recognized qualifications. All work performed is reviewed and verified thoroughly by the onshore team before signing off, and the firm takes complete accountability for the work before sending it off to the client.

• Lastly, explain the rationale and vision behind offshoring and how the industry is moving towards offshoring. Provide examples of how other firms have migrated to offshoring and outline where your firm currently sits. Help clients understand how offshoring benefits them and how it aligns with their goals.

No Reason, But Just Concerned about the 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 we mentioned earlier, if there are concerns, try to explain the value and rationale. 

Should you tell your clients you are offshoring?

Transparency is vital to any relationship; the same applies to your clients. When your client signs the T&Cs of your agreement, you should mention your utilization of offshore services. Clients may skim through the contract or simply trust the firm’s reputation, neglecting the crucial details outlined in the terms and conditions. 

This tendency can potentially lead to misunderstandings, unmet expectations, and legal complications down the line. To clarify this, you can highlight the point in the contract in addition to verbally mentioning it to them.  

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 Warranty 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.

FAQs

1. What would my clients think about offshoring?

Ans: It is common for clients to feel apprehensive when considering something new, such as offshoring. However, by effectively explaining the benefits to both parties involved, we can help change their perspective. It is equally important to acknowledge and address the concerns of our employees regarding offshoring. To ensure a comprehensive solution, we have devised an approach that aims to address these apprehensions.

2. What would my employees think about offshoring?

Ans: The prospect of offshoring can create concerns among the existing accounting team, potentially leading to feelings of job insecurity, undervaluation, and a decline in morale and productivity. However, engaging in clear and inclusive communication about offshoring is essential to alleviate these concerns. Emphasizing offshoring as a growth strategy rather than a cost-cutting measure is crucial in ensuring job security, enhancing productivity, and fostering a sense of empowerment and motivation within the team. Having addressed both clients' and employees' concerns, it is important to consider the right time to hire offshore staff for your US accounting firm. We offer you a straightforward resolution to this dilemma.

3. When is the right time to hire offshore staff for your US accounting firm?

Ans: It has been determined that summer is the optimal time to hire offshore staff for your US accounting firm, allowing you to gain priority access to qualified professionals; it is important to remain vigilant during the selection process. To ensure a successful partnership, it is crucial to steer clear of these several mistakes when choosing an accounting offshoring partner.

4. What mistakes to avoid when choosing an accounting offshoring partner?

Ans: While choosing an accounting offshoring partner, firms must avoid working with freelancers and small mom-and-pop shops. It is advised to choose an authentic offshoring partner specializing in the accounting industry to ensure specialized services, dedicated staff, and a strong foundation of trust.

5. What are common concerns raised by clients when accounting firms consider offshore hiring, and how can firms address these concerns effectively?

Ans: Clients often express concerns about data security, job outsourcing, and staff quality when accounting firms consider offshore hiring. Firms can address these by transparently communicating their offshore partner's credibility, data protection measures, and the strategic benefits of offshoring. Emphasizing the 9091 Rule, which prioritizes client value, helps overcome client objections and fosters a positive perception.

 

Entigrity™ is a trusted offshore staffing partner for 725+ accountants, CPAs, and tax firms across the US and Canada. With a flexible and transparent hiring model, the company empowers firms of all sizes to acquire skilled accounting, bookkeeping, and tax preparation staff. As a firm 'run by accountants, for the accountants,' Entigrity ensures precise alignment with the hiring needs of accounting firms, providing staff under your control and management, minimizing concerns about compliance, payroll taxes, overheads, or benefits. Entigrity is a proud independent member of the BDO Alliance USA. We have collaborated with IMA to train and upskill 5,000 Professionals in India. We were also recognized as one of the "Dream Companies to Work For" and won the "Great Place to Work® Certified™" in the accounting offshoring industry.