Why Small Business Accountants think offshoring and outsourcing is a failed solution

Offshore staffing solution is often seen as a failure because owners perceive it as a quick fix or a magical solution to their problems, neglecting the need for proper development and implementation processes. They fail to invest in training employees and providing them with the necessary skills and knowledge to utilize the offshoring solution effectively. Furthermore, there is a lack of consistent feedback and evaluation mechanisms to assess the accounting offshoring performance and make necessary improvements. Ultimately, this approach results in a flawed implementation and contributes to the perception of failure.

Here are some of the challenges mentioned by accounting firm owners regarding accounting offshoring

• The staff takes more time than I do to get the work done
• I will still have to review the work done by the offshore staff members
• I would rather do it myself than have to spend time training someone

Moreover, offshore staffing solutions may disconnect accountants and their clients, decreasing client satisfaction and loyalty. These factors contribute to the dissatisfaction experienced by small business accountants who have turned to offshore accounting services for small businesses to reduce their workload. But the truth is that offshoring and outsourcing accounting adds great value to accounting firms. 

Though these are valid concerns, other factors need to be considered.

The Initial Hurdles

When small business accountants initially explore offshoring, they often face challenges such as extended task completion times and the necessity for additional review and training. These concerns arise due to the learning curve of transitioning to an offshore team. However, it’s important to recognize that offshoring should be considered a long-term investment rather than a quick fix. 
With patience and commitment, accountants can overcome these initial hurdles and reap the benefits of offshoring, such as increased efficiency, cost savings, and scalability. By persistently addressing concerns, providing adequate training and support, and maintaining open lines of communication, accountants can optimize their offshore staffing solutions experience and get the most out of it.

How much is your time worth?

For small business accountants, understanding the value of their time is crucial. By recognizing that certain tasks can be efficiently handled by someone at a lower cost, such as offshore professionals earning $12/hour or £10/hour, accountants can make informed decisions about delegation. Offshoring repetitive and time-consuming activities enables accountants to allocate their time towards more valuable endeavors, like strategic financial planning and client engagement. 

This shift in focus enhances a firm owner's overall productivity and profitability, allowing them to deliver higher-quality services to their clients. In fact, here are 5 reasons why the US-India partnership opens up an unprecedented opportunity for small, midsize, and regional accounting firms.

Long-Term Perspective

Initially, offshoring can be a complex process as it requires training and reviewing the work of the offshore team. This can involve additional time and effort to ensure the offshore team understands the company's processes and standards. However, as time progresses, the benefits of offshoring start to emerge. 
Over time, offshore accounting solutions become more integrated with the firm’s operations, leading to increased efficiency, productivity, and potentially even innovation.

Reduction in Review Time: 

When initially working with offshore accountants, they may need to review their work to ensure accuracy. However, their efficiency and accuracy will improve as the offshore team members become more experienced and acclimated to the processes. This reduces the time required for review, enabling accountants to allocate their time more effectively toward other critical tasks. 

With proper training, communication, and feedback mechanisms, offshore solutions for accounting firms can become valuable, freeing up the accountant's time and increasing overall productivity. Over time, this improved workflow can result in greater efficiency and success for small business accountants.

From rejection to recommendation, the remarkable journey of our esteemed client Tiffany Torr, the visionary Founder of Blackbull Accounting. Despite Tiffany's initial resistance due to security concerns, Mark Torr, Co-Founder of BlackBull Accounting, was persistent and convinced her to hire a bookkeeper, ultimately making it a wise decision.

They commenced the interviewing process in December 2017, just prior to the tax season, and started their work in January 2018. Tiffany initially harbored nervousness and skepticism about integrating offshore accounting staff with her onshore team due to time zone differences. However, they realized the importance of documenting every step of the process, from the appointment center to document scanning and cloud storage. 

The company embarked on onboarding three tax preparers, fostering communication through Skype to address concerns and ensure documentation of their evolving processes. With the guidance of a skilled tax preparer, the team swiftly expanded from three tax associates to robust offshore accountants of 6-7 members for outsourced tax preparation services, accompanied by the addition of three bookkeepers. Currently, they boast a fully established and highly efficient full-time team.

To see how Tiffany and Blackbull Accounting were able to fully leverage the power of accounting offshoring and grow their firm, check out the video below. 

Review Time Came down from 8 hours to 1.5 hours:

Tiffany engaged the services of a professional reviewer who diligently worked to rectify all error codes, enabling her to allocate time for a comprehensive high-level review. She possessed a strong sense of assurance in providing her approval, and the tax comparison page proved to be an invaluable tool, allowing her to analyze the client's previous year's status in contrast to the current year's developments. Tiffany mentions,

"Her review time literally went down from eight hours a day to 1.5 hours a day. And this review time came down almost after 2 years".

“Outsourcing accounting to India is very easy. The staff in India is incredibly kind, humble, and very coachable. It's part of our company culture no matter onshore or offshore, we are all one team! Our staff, our crew is always the #1 priority because if we focus on them, they can better serve our clients.”

- Tiffany Torr, founder of Blackbull Accounting.

She further says,

“We have invested tons of our own time training our offshore accounting staff to help them be better at their jobs. We also have systems and protocols for them to follow. All tools are in the cloud. This is one reason we have them all full-time. We do not want to see all of our hard work and training benefit some other company who might hire them away from us”.

If Blackbull Accounting continues to leverage outsourced accounting services they could Build a Million Dollar Plus Accounting Firm.

Improved Review Quality:

By providing thorough training and maintaining clear lines of communication, accountants can effectively convey their expectations to offshore staff. This ensures a shared understanding of desired outcomes and facilitates the delivery of high-quality work. As offshore team members gain experience and familiarity, the review process becomes more streamlined and less time-consuming.

The improved understanding and alignment between accountants and offshore staff contributed to greater efficiency and reduced review times, enabling accountants to allocate their time more effectively. This repetitive process allows for continuous improvement and optimization of accounting staffing solutions workflows.

Increased Work Capacity:

It is common for offshore accountants to initially require more time to complete tasks than the firm owner or onshore staff due to the learning curve. However, as they develop their skills and gain proficiency, the productivity and output of the offshore team steadily improve. In fact, with adequate training and feedback, over time, the offshore team's efficiency may surpass the individual capacity of the accountant. This transition represents the successful integration and optimization of accounting outsourcing staffing solutions, allowing accounting firm owners to leverage a larger workforce and achieve higher productivity. Embracing this growth potential can increase scalability and enhance service delivery for small business accountants.

Conclusion

While small business accountants often perceive offshoring as a failed solution due to initial challenges, taking a long-term perspective will reveal its true benefits. Planning accounting staffing needs in advance can help small business accountants find the best talents for their firms. Offshore staffing solutions can significantly reduce the accountant's workload and create more time for valuable activities. By investing in training, maintaining clear communication, and fostering a collaborative relationship with your offshore accounting service provider, accountants can streamline their operations and achieve greater efficiency and productivity.

It is important to note that accounting staffing solutions are not one-size-fits-all, and their effectiveness may vary depending on individual circumstances. Accountants must thoroughly assess their needs, consider the long-term advantages, and collaborate with reputable offshoring providers to tailor a strategy that aligns with their unique requirements. With patience, commitment, and proper management, offshoring can become a valuable tool for small business accountants seeking to optimize their workflows and achieve sustainable growth.

Offshoring and outsourced accounting staffing solutions are here to stay, and the future will belong to those accountants that can leverage its benefits for their firm. But knowing the optimal way to implement accounting outsourcing best practices is not straightforward and sometimes difficult to understand. To streamline your efforts and provide you with all the information you need about accounting offshoring and outsourcing, we've put together the Offshoring Trends Book. This comprehensive guide is for accounting firms looking to the future, so get your copy today.

FAQs:

1. What are the pros and cons of offshore accounting solutions?

Pros:

• Cost savings
• Lower labor costs
• Tax benefits and financial incentives
• Returning earnings back to the U.S.
• 24/7 operations
• Availability of skilled labor

Cons:

• Cultural and social issues
• Language and communication barriers
• Quality control problems
• Time zone adjustments

2. Why outsourcing accounting solutions is good?

Outsourcing accounting solutions can be beneficial because it allows businesses to tap into specialized expertise and resources without the need for in-house hiring and training. It can also lead to cost savings, increased efficiency, and improved accuracy in financial processes, enabling companies to focus on their core competencies and strategic goals.

3. What is the limitation of outsourcing accounting services?

One limitation of outsourcing accounting services is that it may create communication challenges, as distance and time zone differences can affect real-time collaboration and responsiveness to accounting needs. However, by setting processes and having an effective review process, these limitations can easily be overcome.

4. What is the argument against outsourcing accounting?

The argument against outsourcing accounting revolves around concerns related to data security, confidentiality, and loss of control. Small business accountants or accounting firms argue that entrusting financial information to external parties increases the risk of data breaches and compromises the integrity of sensitive financial data while also potentially diminishing the organization's ability to oversee and manage its accounting processes effectively.

What is the problem with offshore staffing solutions?

One problem with offshore staffing solutions is the potential for communication and cultural barriers between the offshore team and the onshore team, which can lead to miscommunication and delays in project execution. Additionally, time zone differences can pose challenges in coordinating work schedules and real-time collaboration, impacting productivity and responsiveness.

Entigrity™ is a trusted offshore staffing partner to 725+ accountants, CPAs, and tax firms across the US and Canada. Our flexible and transparent hiring model gives helps firms of all sizes to 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 the least to worry about compliance, payroll taxes, overheads or any other benefits.