CPA firms typically spend 70% of their time administering low-yield, data-intensive compliance functions. The good news is an accounting outsourcing company can do this work for you! Other than the obvious benefits of cost-savings, outsourcing your accounting functions reduces overhead that comes in the form of:
- Recruiting and training specialist staff
- Retaining non-core skills
- Buying and maintaining systems and software
In addition to the above, the following benefits explain why a CPA firm like yours should stop processing their data-intensive compliance function in-house and move to the model of accounting outsourcing.
1) Lower Operational Cost
This is commonly cited as the primary driver. Under an ad-hoc business model, businesses pay for the resources when they need them. Even if they sign up for a dedicated resource, substantial reduction in costs is quickly visible. It is not uncommon for businesses to reduce their in-house accounting costs by close to 50%.
2) Increase Operations Efficiency
Small and medium-sized CPA firms lack access to best practices such as technology and infrastructure to perform efficient accounting functions. However, when they outsource such a task to an outsourcing specialist, they can easily achieve equal if not better efficiency and productivity levels as their larger competitors.
An accounting outsourcing service provider can create this leveled playing field because they are specialists who operate from a location where the overheads are lower than the client’s country (depending on the type of outsourcing used).
3) Improve Margins
For CPA firms, running data-intensive compliance functions is generally considered a low-margin activity. Accounting outsourcing not only reduces costs but ups the margin. It is especially beneficial if you have huge volumes of compliance work.
4) Save Time
Accounting outsourcing allows you to spend billable time on delivering higher billing work, building and maintaining client relationships, and growing the firm. It also frees up managers and partners from time-intensive recruitment, training, and compliance duties, which leaves time for truly strategic initiatives.
5) Gain a Competitive Advantage
Accounting outsourcing allows firms to take on more profitable work and boost business revenue. What would boost a firm’s competitive advantage more than ending costly, low skilled duties, and replacing them will value adding positions?
6) Faster Turnaround Time
CPA firms outsourcing to India, a country where many outsourcing ‘agencies’ are located, gain from the time difference. How, you ask? With India being 10 hours ahead of the East Coast of North America, work sent overnight can be returned the next morning. There’s great value in that service for tax, bookkeeping, and financial services accounting.
7) Acquire Flexible Resources
One of the most unique benefits that lets you run a lean operation is the flexibility of outsourcing operations. Outsourcing nowadays offers the option of scalability with an array of engagement models like shared, ad-hoc, and dedicated ’employees.’ Depending on work volumes, you can choose the one that fits your needs. During peak seasons when you are inundated with work you can easily scale up the outsource team, and when work is slow you can trim it down.
Accounting outsourcing opens access to an articulate, educated, English-speaking workforce that grows with your company without the HR headache. It also allows you to enjoy a larger workforce and increase your firm’s efficiency without increasing headcount.
9) Escape the Maze of Legislation
Accounting outsourcing companies take care of staying a step ahead of the ever-changing raft of legislation. They take over the complex legislation and work in partnership with IRS and US GAAP so you can concentrate on delivering the primary services of your firm.
10) Shared Risk
Another less-spoken about benefit which directly affects the growth of your firm is risk mitigation. When used as a business strategy, accounting outsourcing allows you to significantly reduce your exposure to risk. To add to that, it reduces the risk of having in-house employees who may not be available at a critical time due to sickness or holidays.
This is especially beneficial for small and medium size CPA firms that are looking for ‘specialist’ employees. Outsourcing opens access to a team of professionals who are specialists at running your data-intensive compliance functions. Particularly in areas of technology, outsourcing provides an instant access to industry best practices that might be too cost-intensive to buy or hire.
12) Level the Playing Field
It’s a given that small or medium-sized firms can’t match the in-house quality of non-core tasks that big firms can maintain. This changes totally when CPA firms get access to a specialist team and technology that in the past was only available to big firms. This further allows you to compete with bigger firms for better contracts which will generate more profits by outsourcing portions of the workload.
Are you looking for an accounting outsourcing company for your CPA firm? We can help. Visit our Contact Us page to fill the form or simply write to us firstname.lastname@example.org. A member of our staff will reach out to you at the earliest.
This article is intended for educational purposes only and does not constitute paid legal, financial tax or other professional services. To see how the information described in the article impacts your unique tax, financial or legal situation consult with an advisor. Photo Copyright: <a href='https://www.123rf.com/profile_gmast3r'>gmast3r / 123RF Stock Photo