Should You Outsource
Accounting Services?

First, let’s define what the term “outsourcing” really means.  Most of us tend to think of it in connection with hiring someone who is located outside of the U.S., but that’s only part of the definition. There is another part to “outsourcing,” with which we’re all very familiar. In fact, you have probably outsourced labor yourself at one time or another.

For example, if you have ever hired a bookkeeper, accountant, or CPA on a contract basis—not making them an employee—then by definition, you have “outsourced” that labor.

As we all know, many large companies outsource a substantial amount of their business processes by utilizing offshore labor located in lower-wage countries.  They are looking for educated workers who are English-speakers and often find them in countries such as India or the Philippines. 

Most of us, in fact, are quite familiar with the call center technician whom we’ve encountered when calling a U.S. company regarding some type of service or billing issue.

Different Skill Levels

Not all outsourced labor is comprised of relatively low-skilled call center workers, though.  A great deal of outsourcing involves much more highly-skilled labor. Accountants fall into this category. And that’s good news for American businesses, especially small to mid-sized companies.

Software and fast internet connections allow a great deal of early-stage financial data entry to be handled overseas, leaving the results to be crunched and analyzed by higher paid accountants here in the U.S. who have a better understanding of a company’s specific needs and corporate culture—and last, but not least—a more thorough understanding of the U.S. tax code.

Your Options

Depending upon your business and your bookkeeping or accounting needs, you could consider outsourcing, as well. You can send your income and expense receipts to someone in Asia, for instance, who is a master of QuickBooks and have them make all the data entries. You can then set this data up so that it flows seamlessly into your balance sheets, income statements, and whatever other reports you require.

Communication

Another technology you can depend upon to make outsourcing a great deal easier is gTalk, Google’s online telephone system.  It’s simple to set up—all you need is a gMail account—and the folks you’re most likely dealing with overseas will, in all likelihood, already have a gTalk account which they are using to communicate with their other customers. 

In this case, you can be ready to go in a matter of minutes. You’ll find that the audio is equal to that of a stateside telephone call, and the cost is as low as it gets—free.  It just doesn’t get much better than that!

Of course, there is also Skype, so the choice is up to you. The point is that by utilizing such a phone system, you can communicate as frequently as you like, and misunderstandings can be nipped in the bud before they blossom into real problems. 

In addition, you can set up a Google online spreadsheet to keep track of the work project/s and the time logged. This allows both you and your offshore accountant or bookkeeper to communicate effectively so that expectations are met, and everyone remains happy with the arrangement.  

This could prove to be an important asset for a small company and could save you quite a bit of money. Managing an offshore resource like this might take a bit more of your time, especially at first until you find exactly the right person for the job and then get everything set up. But after this initial stage, it shouldn’t take you any more time than managing a bookkeeper or accountant here in the U.S.  

What this outsourcing does for you is free up your financial resources so that you can attract the very best accounting talent here in the U.S. Having a strategic U.S. partner with deep accounting experience is definitely worth the money, and this is certainly a way of going about taking care of the nuts and bolts work in a cost-efficient manner. 

Why You Still Need a U.S. Accountant 

One thing you should bear in mind when you are considering outsourcing is that it’s probably not the best idea to outsource all of your accounting work overseas. The reason for this is that overseas talent usually proves inadequate when it comes to fully understanding our sometimes arcane tax code, and an offshore accountant certainly cannot effectively deal with the IRS on your behalf, should the occasion arise. 

So, the best advice is still to find a superior CPA here in the States and consider getting the every-day, nitty-gritty done offshore.   

This is a controversial subject. But a lot of what
Austin accountants do is pretty rote stuff...alot is
done on computers. Sometimes you may benefit
by using off-shore resources.