The tax season is in full swing in many countries around the world and being a CPA providing offshoreaccounting services to clients around the globe, it’s always Tax season for me, and on that note decided to share my thoughts with all of you.
While growing up I was always fascinated by numbers and so followed my passion and became a CPA, while few of my friends became engineers, IT Professionals, Traders and so on but no one became an accountant.
However from past few years what I have observed is, that with the ever increasing legal obligations and severe competitions, I see my friends getting more involved in accounting whether it is Bookkeeping, Payroll, Accounts Receivable, Accounts payable and Tax returns on monthly quarterly and yearly for fulfilling the obligations to government, and struggling to focus on the core business. On top of it with the ease of doing business around the globe, business houses have not only diversified in a portfolio of industries but also many locations, which not only increases their legal obligation but also they are more dependent on the timely information to make the right decisions, which shows the importance of the second branch of accounting ‘Management Accounting’.
I always tell one thing to my friends, who come to me for advice ‘best man for the job’. What I mean is that everyone should focus on their core business, and let the experts do their job. I say this for 2 reasons –
- Their technical expertise guarantees accuracy and
- Being core business the experts can do it in an economical way
When it comes to accounting a CPA like me providing services of Bookkeeping to Financial Statements, Payroll Accounting to Management reports, have expert team who achieves this for clients day in day out, accurately and in an economical manner. The fun part is that even CAs and CPAs whose area of expertise is taxation and law, they also prefer to outsource their bookkeeping and other routine work to practices like mine.
Accountants are not cheap and specially in countries like USA, Australia and many European countries, and thus it is advisable to hire the services of experts at an economical rate. This brings us to the ever-important question I answer all the time, ‘Why Outsource’? And ‘Why Offshore’ for businesses in countries like the USA and Australia.
Apart from the obvious benefits of expert knowledge there are various other reasons as mentioned below for why outsource:
- The cost of hiring, maintaining employees is increasing, on top of it add the insurances and the requisites of labour law, it becomes tough, but when you outsource the work it is one hassel stopping you from focusing on the core business.
- Less infrastructure costs to maintain a back office, especially when real estate around the globe is getting expensive
- Various services under one roof and dealing with one contract
- Focus on growing the business and let the experts do the work
The big MNCs or listed companies have certain legal obligations due to which they need to maintain an in-house team.They have the means to absorb such costs, but for the mall to medium enterprises and the mom and pop ventures its advisable to outsource and let the experts handle it.
But, is my data safe?
The question that always follows the ‘WHY’ is regarding the safety of the data, which brings to the question – is it safe to let an outsider access to the financial numbers or sensitive data? The Answer is yes, as in the hyper connected world the actual transfer of data is not required. Tools like LogmeIn are used to connect to the dedicated PC at your office for us to do the work. Moreover you control the desired level of access that you want to grant. In current times most accounting software and document sharing platforms are cloud based, so there is no need to download any client information to do the job.
The best way is to look for an ethical accountant, with a decent establishment and years of practice. Further the contractual obligations for ethical engagement must be stringent, also verify the professionalism, longevity, ethics and so on using reference checks or client testimonials. Set a clear picture of what the expectations are and have contracts and NDA’s in place to measure the same.
After explaining the concept, benefits and risk involved with outsourcing, I would like to explain why it is beneficial for businesses in the USA, Europe, Australia to look for offshore partner. Apart from the obvious benefits of outsourcing, offshoring brings in the economical aspect to the services, because of various factors listed below.
Benefits of Offshoring
- With International Accounting standards and Practices, the service providers in countries like India are well versed with rules followed in other countries.
- The exchange rate benefit assures that the provider in India give a way economical rate then that in your own country.
- The data now moves on the net and thus eliminates the time lag assuring real time services.
- International contractual laws are much more stringent and thus easier to maintain the clauses of a contract without high risk.
- With blurring of boundaries and increasing exposure to western countries adoption of english as a first language has increased and thus communication is no more a barrier or a showstopper.
Time to get back to work, with a hope that my first attempt at writing is a good read and helps clarify a few of the doubts related to outsourcing and offshoring, till then take care and enjoy the fascinating world of numbers.