Your accounting plays a big and very important role in your business management. In this department, you are able to track all financials that are coming in and out of your organization. For most businesses, they rely on offshore accounting services.
As an entrepreneur, you need insights to all your financial information in making business decisions. Maintaining all your financial records accurate and up-to-date is also critical in keeping your company up and running.
Considering all these given facts, you need people with the right skills and experience to handle your finance and accounting. Rather than hiring novice accounting staff with subpar capabilities, offshoring accounting professionals may prove itself to be a better option for you.
Offshore accounting services is among the most offshored roles today, next to IT services. More and more companies are choosing to offshore their accounting roles as it is more viable, cost effective, and efficient.
In this article, we’ll walk you through the basics of offshore accounting to help you gain a better understanding of this function.
Defining offshore accounting
Offshore accounting refers to contracting out a portion or portions of your accounting processes to a third party services provider. Offshoring is a type of outsourcing practice wherein your service provider is in another country, far away from your geographical location.
Delegating your accounting processes to professionals from another country can bring in these benefits to your workforce and entire organization:
- It allows you to save on costs. Offshoring in general is much more cost-effective compared to hiring your own in-house accounting staff. You will not also be required to spend money on hiring, training, and in providing proper resources for your staff.
- It saves you time. As your business grows, so will the volumes of workload. Offshoring your accounting processes to skilled professionals helps you save more of your precious time. This gives you and your in-house team ample time to focus on your core business.
- Enhanced productivity. Since you have extra sets of hands to support your accounting needs, it let’s you boost your efficiency and productivity.
Offshoring companies provide CPAs and accounting professionals who are properly trained. More so, are also usually well experienced in handling accounting roles for different types of industries.
What accounting roles can you offshore outsource?
Deciding which accounting processes to offshore will mainly depend on your types of needs and requirements. Offshore accounting service providers may also handle various accounting roles altogether.
Here we have outlined the different types of accounting roles you can offshore:
Payroll services involve overall computations of each of your employees salaries, bonuses, taxes, and deductions. It is the total amount you are required to pay each staff for the services they have rendered from a certain period of time.
Offshore payroll service providers also handle distribution of your employees payroll. At the same time, they ensure to comply with the latest tax laws and regulations.
Bookkeeping is a tedious task that revolves around recording all financial transactions within your organization. If done correctly, it enables you to keep track of what your company spends and receives. Bookkeeping has to be accurate, up-to-date, and organized accordingly.
Accounts receivable refers to the money owed to you, usually by your customers. While an account payable represents the money you owe to vendors or other sellers.
Offshoring your tax preparation and filing ensures that you stay compliant with your local, state and federal laws. This process includes cross-checking of financial statements, receipts, bookkeeping, payroll and more.
Offshoring your tax reporting and filling also lets you submit your returns and declare taxes accurately on-time.
Offshoring fraud or forensic accountants helps businesses that have been exposed to fraudulent activities. This helps you restore and reconstruct all your missing records and documents.
Your offshore accounting staff may also analyse your internal processes to ensure your productivity and recuperation.
Offshore accounting firms have CPAs that specialize in preparing financial reports and statements for internal and external uses. This process involves consolidation of your overall expenses and earnings.
Offshoring your financial planning and analysis provides you with comprehensive insights to your financial status. This will greatly help you in making the right decisions for your business growth and development.
When should you offshore accounting
If you are still undecided as to when you should offshore accounting services, here are few pointers you can consider:
Your accounting staff or accountant may na have enough skills or experience to handle complex accounting tasks. Another case is when your company is growing and expanding, your accounting may not be able to handle more workload.
Outdated accounting methods and technology
If your accounting tools and methods are not up-to-date, it can slow down your business progress. More so, you will definitely fall behind your competitors that are making use of the latest technologies and software.
Lack of workforce
If you do not have enough employees to handle specific tasks, the tendency is your in-house team will fill in more roles and tasks. This results in overworked and burned out employees. This will affect your organization’s effectiveness and productivity.
These given scenarios are the perfect opportunities for you to offshore to a reliable accounting service provider.
Qualities of a good offshore accounting service provider
Now let’s go to the qualities you should look for in partnering with the right offshore accounting service provider:
One of the main reasons why companies offshore in general, is to save up to 70% on costs. Note that your offshoring provider should not cost you more than or equally if you are to hire in-house accounting staff.
Seasoned accounting staff
A good offshoring company provides proper training and continuously works on improving its employees skills and capabilities.
An ideal offshore accounting company has highly-skilled and seasoned accounting professionals that can handle any role. These accounting professionals strictly adhere to accounting standards and best practices.
Your offshore outsourcing partner should have accounting solutions that are customizable according to your needs. A client-centric offshoring company cares about your business and helps you get things done based on your requirements.
Reliable and trustworthy
Offshoring your accounting functions means that you will be handing over sensitive information about your company. This is why it is vital that you partner with an offshoring provider that is reliable and can be trusted.
Do a background check or read through their client reviews and past projects. Make sure that your offshored accounting staff should be able to follow strict deadlines. Further, ensure the protection and security of all your data and information.
Offshoring companies do not just invest in their employees. They make sure that they are always on track with the latest accounting technology and tools. This helps them provide the best quality services they can offer to their clients.
Things to consider before you offshore accounting
On this last part, we’ll discuss some tips to consider before offshoring your accounting:
Set clear goals and objectives
Lay out realistic goals and objectives in offshoring your accounting process. What are your expected outcomes? Include timelines and measures to evaluate your progress and performances.
Go through your goals and objectives regularly and hold yourself or your provider accountable if there are changes in your timeline. Remember that if your goals aren’t properly met, it can go downhill, which will also have huge consequences.
Know your budget
Know your budget or if you have the budget, before deciding to offshore your accounting. Although offshoring is cost-saving, make sure that all costs are upfront and that there are no hidden charges.
You may request for a breakdown of all expenses, service fees, and seat overhead charges before giving it a go. Take note that other offshore companies charge an hourly rate.
Ensure all your data is protected
There are several ways you can protect and safeguard all your sensitive information as you offshore. There are software providers that let you save and access cloud-based systems via one protected, web-based application.
This enables you to control information accessibility across different devices, locations, and levels.
Choose the right offshore accounting service provider
There are thousands of outsourcing providers available everywhere around the world nowadays. Choose the right offshore accounting service provider that understands your type of industry and needs.
A lot of companies opt to outsource in developing countries and it is not just about being able to save money. The Philippines for example, is one of the leading outsourcing destinations for companies across the globe.
The country currently has a literacy rate of 98.18%. More so, Filipinos are known to speak the English language fluently. The Philippines boasts global talents. This also explains why the BPO industry in the country is continuously booming.
There is no denying that the country is a great choice for your offshoring needs. To help you look for the best offshore accounting in the country, head over to our list of Top 40 BPO companies in the Philippines!