5 Common Offshore Accounting Services Challenges & Easy Solutions to Overcome Them

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5 Common Offshore Accounting Services Challenges & Easy Solutions to Overcome Them

Offshore accounting services boost cost savings and work efficiency, but it isn’t perfect—there are many challenges that finance and accounting outsourcing brings your way. If you don’t handle offshore accounting challenges on time, they can cause a bigger problem than your imagination.  

Presently, accounting outsourcing in the USA is more challenging due to the Tax Cuts and Job Act (TJCAJ, global pandemics, and many other state and federal changes. Therefore, it won’t be wrong to say that some new challenges are clouding offshore accounting services for all businesses in 2021.  

Now, no need to worry. By educating yourself and doing some homework, you can effortlessly handle all these challenges.  

Biggest Offshore Accounting Services Challenges  

Finance and accounting outsourcing services have numerous lucrative benefits, but you can only achieve them—if you first overcome the following challenges: 

List of Top offshore accounting challangesChallenge #1. Obtaining High-end Cybersecurity  

According to Gartner’s report, around $125 billion worldwide was spend on information security in 2019.  

Since accounting information is always a hot target for hackers, which makes it highly challenging for offshore accounting firms to provide high-level security to their clients. Especially, small accounting firms are mainly targeted as they don’t have a powerful cybersecurity defence mechanism.  

In offshore setup, from transferring accounting data to recording data, all work is done digitally—therefore, the cybersecurity challenge’s intensity becomes more vigorous. Thus, the data breach fear is one of the primary causes for many people not using offshore accounting services even in 2021.  

What’s a Solution?  

The solution is pretty simple; you have to hire an accounting outsourcing partner with a dedicated cybersecurity channel. Your outsourcing partner should have a complete in-house IT security system so that they can fully safeguard your sensitive financial information.  

For example, CapActix is highly trusted accounting outsourcing company in the USA because we have developed a robust cybersecurity mechanism. Based on the guidelines highlighted in IRS Publication 5293, we have prepared our security system, including: 

  • We provide full IT security training to our employees and only hire new employees after signing a non-disclosure agreement.  
  • Personal electronic devices are prohibited on our office premises.  
  • Printing and clients’ files access is only given to trusted employees.  
  • Regular viruses and security audits are performed.  
  • SSL Secure network and digital locks are used at every stage.  
  • Real-time data backup is practiced.  
  • Our on-premises security includes 24*7 CCTV monitoring, security guards, firefighting equipment, and so much more.  

Challenge #2. Intervention of Automation, AI & Many New Technologies 

Robots aren’t coming anytime soon to take over your jobs. But, AI is gaining more power day by day—automating repetitive accounting duties such as collecting regular transactions and compiling them into multiple tax and financial reports.  

It is estimated that by introducing robotic process automation (RPA), 40 people’s accounting team can save up to 25,000 hours of rework per year. This will free up a lot more time for accounting teams to focus on other important issues.  

However, in the offshore scenario, it becomes challenging for accounting businesses or, in fact, any other businesses to update themselves according to all the latest accounting technologies.  

What’s a Solution?  

Straightforwardly speaking, accounting is a competitive and fast-evolving field. Therefore, for offshore or in-house accounting teams, staying updated with the latest technology trends is very important. Thus, offshore accounting companies need to set up a separate IT department to improve their work quality and efficiency.  

Challenge #3. Language and Cultural Barriers  

Offshore accounting has no boundaries—it is both pro and con for accounting companies. Whereas offshore companies can work with global clients, on the contrary, they have to understand global languages and cultures to interact with their clients.  

Imagine, when an India based accounting outsourcing company has to work with US-based clients, it is mandatory to speak English and respect their cultural values. But, the challenge here is that India isn’t an English speaking country and practices a different culture than the US.  

And these language and cultural barriers lead to miscommunication between the teams and can derail the project.  

What’s a Solution? 

Offshore accounting companies should appoint multilingual and open-minded staff who can easily communicate with global clients. For instance, we provide accounting outsourcing in the US, UK, and other major English-speaking nations; therefore, each staff member can fluently speak English and be aware of global cultures.  

Challenge #4. Unclear Goals and Expectations  

Another lesser-known offshore accounting services challenge is unclear goals and expectations by clients. If the offshore accounting team isn’t fully aware of their clients’ objectives, they can’t help achieve them.  

Suppose a CPA firm has outsourced accounts receivable services from India but didn’t defined what they want to achieve with it—whether they want to improve cash flow or save bad debts. Now, an accounting outsourcing company will provide the best solution, but there’s no guarantee if it’s going to meet your expectations or not.  

What’s a Solution? 

Clients need to define their offshore services objectives in detail. And if they don’t do, offshore service providing companies should ask them. Before getting a new client on board, we host a virtual consultation session where we ask clients’ objectives and expectations and allow them to ask anything from our experts to avoid miscommunication.  

Challenge #5. Time Zone Troubles  

Time lag differences have been a double-edged sword for offshore businesses. With offshoring, clients can get around-the-clock services, but it is a bit struggle to bring the entire team together at the time of emergency.  

Especially, when there is a whole 12 hours’ time difference like India and the US, it is a challenge for both sides to work at the same time.  

What’s a Solution? 

Flexibility, yes, offshore accounting companies should have flexible timings so that they can easily work as per their client’s comfort. Offshore accounting company and clients can mutually decide the time that suitable to both of them and yet not within night time zone to any of them.  

Bottom Line  

There might be few challenges in outsourcing accounting services, but they are nothing major that can’t be easily fixed. Especially if you hire an experienced offshore accounting company, you won’t have to worry about anything.  

Whenever you want challenge-free offshore accounting services, you can contact CapActix team on a call on – 201-778-0509 or email – [email protected]. 

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