The accounting requirements of small and medium-sized enterprises (SMEs) in the USA have undergone a significant change in the last ten years and have very recently taken a different direction.
The main reasons behind this change are the advent of digital technologies, stricter compliance requirements, and the constant demand for up-to-the-minute financial data. Under these conditions, traditional accounting methods have become less effective and even obsolete in the fast-changing market. The need for offshore accounting services for small businesses and medium-level enterprises is increasing.
CPA firms, on the other hand, have now started to opt for offshore accounting services in a bid to stay competitive and at the same time offer efficient service to their clients. This blog reveals how offshore accounting services for CPA firms in the USA can improve their practice and enhance support for SMB clients.
The Evolving Role of CPA Firms for SMBs in the USA
The role of CPA firms in the USA today is not just limited to compliance for small and medium enterprises but they have taken upon themselves a much larger responsibility. In addition to tax returns and audits, they have become reliable consultants who help the clients with financial planning, cash flow, and technology changes, and even regulatory matters. Still, the increasing complexity and volume of client demands are often too much for the already strained in-house staff resources giving rise to delays, burnout and inconsistent service quality.
To overcome these obstacles, top firms are resorting to offshoring as a means of balancing workloads, keeping profits, enhancing delivery time and ensuring their competitive advantage. By using the offshore accounting services for CPA firms, they can use expertise for the higher valuable areas of advisory and strategic consulting instead of doing the routine jobs.
What Are Offshore Accounting Services in USA?
Offshoring accounting services in USA means outsourcing accounting, bookkeeping, payroll, and financial reporting functions to the professional teams located outside the U.S.
The main services done by offshore teams are:
- Bookkeeping and general ledger maintenance
- Accounts payable and receivable management
- Payroll processing
- Tax preparation and compliance
- Financial statement preparation
- Audit support services
- Management reporting and analysis
Why Are Offshore Accounting Services Ideal for SMBs in the USA?
The use of offshore resources by CPA firms brings huge advantages to small and medium-sized businesses:
- Cost Efficiency: Because of the significant difference in the cost of labor, CPA firms can, in fact, offer premium services that might otherwise be unaffordable; thus, the firms will be able to share the savings with their clients.
- Scaled Support: The offshore models give the firms the capability of easily increasing or decreasing the number of staff in accordance with their seasonal needs or as per the business growth.
- Access to Experts: The offshore teams are quite often familiar with the laws of the US, GAAP, and the SMB software (QuickBooks Accounting, Xero) so that they can provide support without having to go through a long training for their staff.
- Strategic Growth Focus: By the outsourcing of routine accounting, SMBs along with their CPA partners will be able to allocate their energy to financial strategy, forecasting, and growth planning.
How CPA Firms in the USA Structure Offshore Engagements
Most CPA firms tend to consider offshore accounting partnerships through one of these models:
- Full outsourcing: The complete offshore team performs all client accounting and the CPA firm only provides sign-off and communicates with the client.
- Hybrid team model: The staff located offshore do the routine work (data input, reconciliations), while the accountants based in the US do the reviews, consults, and work on higher-level engagements.
- On-demand/project-based: The CPA firms request the help of the offshore partners for the temporary jobs, like the tax season support, audits, or clearing the backlog.
The offshore team has the same level of access as the CPA firm through secure cloud technology, real-time task tracking, and defined workflows, although they are playing an invisible but important role.
Key Benefits of Offshore Accounting Services for CPA Firms in the USA
Below are the major benefits of offshore accounting services for CPA firms with The Fino Partners: offshore accounting services for small businesses
1. Significant Cost Savings
Moving the whole thing offshore saves the CPA firms as much as 60% on operations, which is mainly due to the lower salaries and overheads in the countries where they have their offshore offices. This has the dual effect of allowing the firm to set lower prices for their SMB clients and to use the money elsewhere, like investing in technology or staff training.
2. Access to Skilled Professionals
The offshore centers have accountants and finance experts with top-level degrees and certificates (e.g. CA, ACCA, CPA equivalents), which are considered the best in the industry. A lot of the providers train their staff in US GAAP and IRS compliance, which means that the quality of service in the offshore centers is at least as good as that in the local centers.
3. Fast Turnaround Times
The time zone difference is in favor of the US and at the end of the US workday, the work can be allocated and it will be finished by the next morning, thereby keeping the project on-going 24 hours a day. This agility is vital during the busy times of the year, for example, when it is tax season.
4. Enhanced Scalability and Flexibility
Once the demand from clients increases, or during peak periods, offshore partners effortlessly augment the workforce size, and thus, CPA firms experience no delays in meeting the deadlines or giving up quality.
5. Focus on Core Advisory Services
By transferring the tedious, manual bookkeeping to the offshore partner, the local teams are able to concentrate on the more sophisticated areas of tax planning, advisory, consulting, and management of customer relationships, which in turn helps to strengthen the relationship with the SMB client.
Top Offshore Services for Small and Medium Businesses in the USA
The most common services that CPA firms that cater to small and medium businesses (SMBs) offshore are as follows:
- Bookkeeping: Continuous entry of transactions, update of ledgers, and reconciliation of banks.
- Accounts Payable/Receivable: Invoice processing, collection handling, and vendor payments are all included.
- Payroll Services: All aspects related to payroll, like computations, adherence to laws, and reporting.
- Tax Preparation: Federal, state, and municipal filing for both companies and individuals.
- Management Reporting: Tailor-made dashboards, performance analytics, and budgeting.
- Cloud Accounting Support: Support for QuickBooks, Xero, Sage, and services for integration.
This all-inclusive package enables small and medium businesses to utilize solutions for large enterprises without paying the prices that large enterprises do.
Implementation: Steps to Launch Offshore Accounting Services in the USA
Here is how you can introduce offshore accounting services for small businesses and offshore accounting services for medium businesses:
1. Identify Goals and Scope
The firms have to evaluate which services can be offshored with the least amount of risk and at the same time the most effectively, considering aspects like client needs, security, and regulation.
2. Select the Right Offshore Partner
The selection of a contractor with exceptional knowledge in small-medium business accounting, US compliance, and very strong security protocols is a must. Look for certifications, live references, and US client experience as indicators of quality.
3. Establish Secure Systems and Processes
Encrypted data transfers that comply with the industry's requirements such as SOC 2, ISO 27001, and GDPR should be the norm. The use of clear protocols, cloud workflow tools, and defined escalation paths minimizes the risk of miscommunication.
4. Onboard and Train Teams
The firm’s culture, service standards, and client expectations should be explained clearly during the onboarding process. Identify and remove any gaps in knowledge regarding US tax, payroll, software, and communication preferences.
5. Monitor, Review, and Optimize
Continuous quality reviews, process audits, and feedback mechanisms make sure that the quality does not go down and the improvements are still coming in.
Offshore accounting services for CPA firms in the USA are changing the way these firms serve small and medium-sized business clients. The new approach provides a multitude of benefits such as big savings, immediate scaling, top-notch skills, and an intense focus on the strategic priorities that are the source of business growth.
Offshore accounting, through wise partner selection, stringent security measures, and open communication, enables both firms and their clients to survive and prosper in a competitive and tech-savvy era.
Related Resources
- Step-by-Step Guide to Hiring Offshore Accounting Services in the USA
- Top 6 Questions to Ask Before Choosing Offshore Accounting Services
- Offshore Accounting Services vs. Local Accounting: What Works Best in the USA?
Get in touch with The Fino Partners to access the best offshore accounting services for small businesses, medium businesses and CPA firms in the USA.
