Accounting is a method of managing accounts so that the transactions reflect their true nature and the balances are reliable. The revenue departments of countries are interested in realizing the tax from income earned by an individual or organization during a year. For this purpose, the incomes should be appropriately disclosed as per the legal norms. There are also other purposes for which accounts are needed, such as availing bank loans, compliance-related disclosures, public listings, etc. For knowing the status of an entity on paper, accounting is a must.
Need for Outsourcing Accounting Services
Accounting involves a whole world of financial data reporting and management, which is complicated to compile. Businesses other than CPA firms have a lot of different processes to manage. It also gets challenging for small businesses to have a department set up for accounting to stay on top of all the deadlines. They tend to outsource this job to avail the benefits of professional services. The cost paid for the services is often worth the efforts saved in getting it down in-house.
Outsourcing the accounting work to India could be a smart choice for many businesses worldwide, as the accounting curriculum in India follows international standards. The professionals need to go through a small module overview to understand a specific country’s laws. The basic principles remain the same, making the work effective.
Plan Tax Season by Outsourcing Accounting Services
The underlying need for accounting is there, which cannot be done away with. But it can be outsourced for relieving some pressure off the head during the tax season. Accounting is a specialized department that requires professional expertise to handle the tasks independently. As CPA firms have to complete the books of account within the deadline, it could lead to mismanagement of work. Tight deadlines could reduce the quality of work delivered due to excessive work. The shortage of professionals adds to an already strained system.
Tax season is a tight time for accounting firms as they have to manage filing tax returns and the regular accounting and consultation work. To meet the deadlines, such firms often Outsource Tax Preparation to India. This reallocation of work helps them get the job done without compromising on quality. Many services are being provided by firms in India that can take the pressure off CPA firms. These include various accounting services, tax preparation services, analysis reports, budgeting, and reconciliations. All these are based on a standard set of formulas, taking away the subjectivity in work.
Strategic Management of Accounting Services
Book-keeping services are quite widely provided in India given the highly competent cost-effective labor availability. It is a no-brainer that they have experience in all domains of work. CPA firms can leverage their experience to focus on specialty accounting and consultation work. For better planning the workstream, accounting firms outsource accounting services to India. But accounting outsourcing services could be tricky for reasons such as the responsibility of the work done, redundancy due to corrections, and other contractual mishaps. To get a good service provider on board for the specific needs of running an accounting firm yourself, you need to identify a suitable engagement model.
- Ensure you do a thorough background check of the offshore service provider, corroborated by some references and work samples.
- The work timelines need to be strictly abided, which can be confirmed through a pilot project, based on which further collaboration can be discussed.
- A detailed SLA needs to be consented to mutually for developing work-level clarity. This will remove all the ambiguity from the outsourced projects while holding the service provider accountable for their services.
- Some review metrics could be defined in the contract, which will act as the basis of quality assurance. Any deviation from the same could be contested through a pre-mediated corrective action plan.
- The engagement model can be contractual, as discussed above. If all goes well, the engagement could be upgraded to FTE.
- Going beyond cost-savings, work allocation should be considered from a utility perspective. Outsourcing can be used as a tool to get the work done beyond a firm’s core competencies. If the outcome adds value to the client, the firm can build upon it to develop long-term client relationships.
Outsourcing is the new norm in the diversified, fast-paced world we’re living in. Managing the outsourced work is the key to this process. For reduced management and better results, robust systems need to be implemented. The most important ones are driven prior engagement to guarantee lesser hassle later. These are compliance-related assurances, which help build trust while also providing a built-in resolution.
- The offshore accounting company should have a business continuity plan for unfavorable circumstances.
- There are some standard high-performance metrics, such as ISO 9001, which can be relied on.
- The service provider’s communication and file sharing systems should comply with SOC 2 to ensure data security.
It isn’t easy to find a proper balance of these factors and partner with an offshore accounting company if the turnaround time is suitable for your firm. It has the potential of substantial cost-savings, with an army of experienced professionals at hand during busy tax seasons.
Are you looking for someone to outsource your accounting services? Call us today at +1 201-778-0509 or reach out to us at [email protected].