A quick guide to offshore accounting services

What is offshore accounting?

Offshore accounting means hiring a trained team in another country to handle part or all of your accounting work.

• It cuts costs, saves time, and boosts your output.
• You can offshore payroll, bookkeeping, tax, and financial reports.
• The right partner offers fair pricing, skilled staff, and strong data security.

This offshore accounting guide walks you through the basics of a smart business move. First, let us set the scene. Your accounting plays a big and vital role in how you run your business.

In this area, you track all the money coming in and out of your firm. As an owner, you need clear insight into these numbers to make good calls. So accurate, up-to-date records are key to keeping your company healthy.

Because of this, you need people with the right skills to handle your finances. Rather than hire novice staff, you may find offshoring the smarter option.

Offshore accounting is one of the most offshored roles today, next to IT. So more firms now offshore their accounting roles, because it is cheaper and more efficient.

Defining offshore accounting

Offshore accounting means contracting out part of your accounting work to an outside provider. It is a type of outsourcing where your provider sits in another country, far from you.

Handing these tasks to pros abroad can bring real benefits to your workforce and the entire organization:

• It saves you money. Offshoring costs far less than an in-house team. In addition, you skip the spend on hiring, training, and setup.
• It saves you time. As your firm grows, so does the workload. So skilled offshore staff free up your time. As a result, your in-house team can focus on core work.
• It boosts output. Extra hands support your accounting needs. Because of this, your team gets more done.

Cloud staffing firms like Cloudstaff provide trained CPAs and accountants. They are also skilled in many industries.

What accounting roles can you offshore?

The roles you offshore depend on your needs. However, providers can take on many tasks at once. Here are the main roles you can offshore:

Payroll processing

Payroll work covers each staff member’s pay, bonus, tax, and deductions. In short, it is the full amount you owe your team for their work.

Offshore providers also handle payroll payouts. At the same time, they follow the latest tax rules. Many firms bundle this with wider payroll processing services.

Bookkeeping

Bookkeeping means recording all money moves in your firm. Done right, it helps you track your full financial picture. So your books must stay accurate, current, and tidy. If you are unsure how it differs from wider accounting, this guide on the difference between bookkeeping and accounting can help.

Accounts receivable and payable

Accounts receivable is the money owed to you, usually by customers. Accounts payable is the money you owe to vendors and sellers. So many firms hand this off through accounts payable outsourcing.

Tax preparation

Offshoring your tax work keeps you compliant with local, state, and federal laws. So the team cross-checks statements, receipts, books, and payroll.

It also lets you file returns and declare taxes on time. In addition, offshore staff often know international tax rules well.

Forensic accounting

Offshoring fraud or forensic accountants helps firms hit by fraud. As a result, you can rebuild missing records and documents.

Your offshore accountant may also review your internal steps. So your output and recovery both improve.

Financial statements preparation

Offshore firms have CPAs who focus on financial reports. This work pulls together your full costs and earnings for internal and external use.

Financial analysis and planning

Offshore planning gives you a clear view of your financial health. As a result, you can make better calls for growth. A senior financial controller can guide this work.

When should you offshore accounting

Not sure when to offshore accounting? Here are a few clear signs to watch for.

Skill gap

Your staff may not have the skills or experience for complex tasks. Also, as your firm grows, your team may struggle with more work.

Outdated tools and practices

Old tools and methods can slow your business down. As a result, you may fall behind rivals who use the latest software.

Lack of workforce

Too few staff means your team must fill in many roles. So people get overworked and burned-out employees. This hurts your output and results.

These cases are prime chances to offshore to a reliable provider.

Qualities of good offshore accounting service providers

Now let us look at what to seek in the right offshore accounting partner.

Reasonable pricing

A main reason firms offshore is to save up to 70% on costs. So your offshore team should not cost more than an in-house one.

Seasoned accounting staff

A good firm trains its people and keeps improving their skills. As a result, you get skilled staff who follow accounting standards. A trusted virtual accountant can handle almost any role.

Client-centric

Your partner should offer solutions that fit your needs. So a client-first firm cares about your business and works to your brief.

Reliable and trustworthy

Offshoring means handing over sensitive company data. Because of this, you need a partner you can trust.

Do a background check and read client reviews. Also make sure the team can meet strict deadlines and protect your data.

Up-to-date technology

Good firms invest in more than just people. They also keep up with the latest accounting technology and tools. So they can offer top-quality service.

Things to consider before you offshore accounting

In this last part, we share tips to weigh before you offshore.

Set clear goals and objectives

Set realistic goals for your offshore plan. What outcomes do you expect? So include timelines and ways to track progress.

Review your goals often and hold your provider to account. Remember, missed goals can carry big costs.

Know your budget

Know your budget before you offshore your accounting. Offshoring saves money, but you still want costs upfront with no hidden fees.

So ask for a breakdown of all charges before you start. Note that some firms charge an hourly rate.

Ensure all your data is protected

You can safeguard your data in several ways as you offshore. For example, some providers store data in one secure, cloud-based app.

This lets you control access across devices, sites, and levels. Strong data security in outsourcing should be a top priority.

Choose the right offshore accounting service provider

There are thousands of providers around the world today. So pick one that knows your industry and needs.

Many firms choose offshore accounting in developing countries. Still, it is not just about saving money. The Philippines, for example, is a top outsourcing hub.

The country reports a strong adult literacy rate of 98.18%. Filipinos also speak English well. In addition, the country boasts global talent, which is why its BPO industry keeps growing.

So there is no doubt the country is a great choice for your offshoring needs. To find the best fit, head to our list of Top 40 BPO companies in the Philippines.

Key takeaways

• Offshore accounting hands part of your finance work to a trained team abroad.
• It cuts costs, saves time, and lifts your output.
• You can offshore payroll, bookkeeping, tax, and financial reports.
• Vet each partner on pricing, skills, trust, tools, and data security.

Frequently asked questions

What is the difference between offshore accounting and outsourcing?

Outsourcing means hiring an outside firm for a task. Offshore accounting is a type of outsourcing where the team sits in another country.

Which accounting tasks can I offshore?

You can offshore payroll, bookkeeping, and tax preparation. In addition, providers handle financial reports, analysis, and forensic accounting.

How much can I save with offshore accounting?

Many firms save up to 70% on costs. However, the exact figure depends on the roles you offshore and your provider.

Is my financial data safe with an offshore team?

Yes, if you pick a trusted provider with strong controls. For example, good firms use secure cloud apps and strict access rules.

Why is the Philippines popular for offshore accounting?

The country has skilled, English-speaking CPAs and a mature BPO industry. So it offers strong talent at a fair cost.