It is increasingly difficult in industrialized countries such as the US and UK to find qualified accounting talent. But in countries with developing industries offshore talent is plentiful with large, highly trained populations. The Philippines, for example, has a diverse base of over 175,000 US GAAP trained CPAs alone and many more accounting professionals, while the pool of CPAs in the US is shrinking. In addition, growing companies can scale quickly offshore, which is difficult to do in the US or UK, given the current large labor shortages.
Companies will generally save somewhere between 30% to 50% or more for the same quality of talent because the salaries are often lower overseas. This is increasing as accounting salaries have escalated steeply in recent years.
Remote accounting allows a company to augment an existing accounting team by adding staff at a lower cost. In other words, a company can now afford to scale. By adding enough staff to make a significant difference in the operation of the accounting department and improve accounting processes and timeliness overall.
Offshoring accountants has considerable benefits but has some drawbacks that can be overcome with some thought and planning:
By definition, the offshore accounting team is a remote team. Many accounting departments, especially since the pandemic, have been working remote and have become more aware of the challenges inherent in doing so. Any remote work requires tools to effectively communicate such as web meeting software, messaging and other tools. Other software available helps a distributed team manage the monthly close cycle, for example. Management oversight including explicitly setting goals and deliverables as well as tracking performance metrics is more important than ever with an offshore team.
“Offshore accounting” is not “outsourcing” or “business process outsourcing.”
“Outsourcing” is where a company hires another firm to perform a particular entire function or set of functions, such as accounts payable, accounts receivable or all accounting. The outsourcer is responsible for performing these processes including the staffing and management of the accounting team.
By contrast, “offshore accounting” is where a company has a dedicated accounting team that that happens to be in another country that the company must manage. Usually a company will contract with a third party to recruit the team that will handle all the administrative support for the team to function including HR, IT as well as provide office space and other infrastructure as needed.
Offshore accounting is one of the fastest growing techniques used by companies to achieve corporate goals of timely and reliable accounting processing. It allows companies to find the talent that is in such short supply at a significantly lower cost and be able to meet their timelines for accurate financial reporting.
In a recent digital CPA Conference webinar, Dave Schnitt, President and CEO of IQ BackOffice and Offsite Office, shared valuable insights, drawing from his company’s extensive experience in providing outsourced accounting services and offshore staffing solutions.
While AI won’t replace human accountants entirely, it has the potential to revolutionize the way accounting firms operate, particularly those that leverage offshoring.
Measuring ROI in offshoring demands a forward-thinking approach that goes beyond cost reduction. By embracing a holistic framework that captures tangible and intangible benefits, CFOs can assess the true value proposition of offshoring ventures
This article is a quick digest of key takeaways from David Schnitt’s insightful podcast interview regarding Offsite Office.
Forget everything you thought you knew about finding qualified accountants. The game has completely changed.
Businesses are increasingly recognizing the value of delegating accounting tasks to qualified service providers in other countries. This approach offers a multitude of benefits beyond just cost savings.
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Offsite Office will provide a Consultant to perform a detailed review and benchmarking of your current process. We will:
