The month-end is the most hectic time of the month for accounting firms. CPA teams are engaged in large part in performing reconciliations, investigating transaction details, recording the results in the ledgers, creating reports and handling client queries under such constraints of time. When multiple clients have overlapping deadlines, even simple bookkeeping work can become a challenge.
This opens up a great potential for providing offshore book keeping services for CPAs. CPAs can outsource some of their bookkeeping work with the offshore team and increase their capacity of processing at the same time.
Offshore bookkeeping services enable firms to control month-end work, but permit CPAs to concentrate on the review and analysis of client work, tax, and our advisory and client services team business.
Why Month-End Is Challenging for CPA Firms
Month-end closing has a number of activities and tasks have to be run in proper order. If one activity is run behind time, it can affect many other areas of the month-end closing process.
For instance, reconciliation of bank accounts might be required before the accounts can be completed. In the same way, waiting for some invoices that haven't been received or that have been wrongly labeled might cause a delay in the reporting.
Some common month-end responsibilities include:
- Bank and credit card reconciliations
- Accounts payable and receivable updates.
- General ledger upkeep
- How accrual and adjustment support
- Balance checking account
- Draft financial statements for trial purposes.
- Documentation and reporting
Multiply this by dozens of clients and internal accounting teams can become overwhelmed very quickly.
How Offshore Bookkeeping Supports the Month-End Close
Offshore accounting enables CPA firms to subcontract certain bookkeeping and accounting processes to a remote professionals team. The professionals carry out the specific functions and the US team brings necessary oversight and professional review.
Rather than disrupting CPAs every day for hours having to do each and every transaction, some work can be disaggregated by simplicity.
Typical Month-End Workflow
A structured process may look like this:
Client documents → Offshore bookkeeping → Reconciliations → Quality check → CPA review → Final reporting
The offshore team can process routine bookkeeping work and flag unusual transactions or missing information. The CPA team can then focus on exceptions and areas that require professional judgment.
This approach can make the month-end close more predictable and easier to monitor.
Key Tasks That Can Be Outsourced Offshore by CPAs
Not all accounting work has to be within the CPA firm of business. Almost all mundane and repetitive bookkeeping work can be outsourced to any offshore accounting and bookkeeping services.
Bank and Credit Card Reconciliations
Offshore bookkeepers can reconcile bank and credit card statements with the accounting records, list differences, and prepare reconciliation reports.
Transaction Categorization
Jobs that arise at regular intervals can be grouped using the firm's normal accounting procedures, and any irregular or questionable transactions identified for the CPA.
Accounts Payable and Receivable Support
Offshore teams could also support invoice records, payment tracking, receivables balances, and other operational aspects of accounts payable and accounts receivable processes.
General Ledger Support
Bookkeepers are able to record these transactions in the general ledger and flag them for additional scrutiny before closing out the month.
Benefits of Offshore Bookkeeping Services for CPAs
Here are some of the major benefits:
1. Additional Capacity During Busy Periods
Page end loads can vary.Even higher loads in the middle of the month offshore staff ensure there is always extra processing capacity in the firm.
This can be mainly convenient if many client's accounts are to be closed simultaneously.
2. Reduced Administrative Work for CPAs
CPAs frequently find the need to devote some of their time to work calling for analytical assessment and professional interpretation. Assigning these recurring bookkeeping responsibilities can lessen the amount of routine processing work managed themselves by senior CPA professionals.
This allows them to focus on:
- Financial analysis
- Tax-related work
- Client consultations
- Advisory services
- Review and quality control
- Business planning
3. Faster Month-End Processing
By dividing the bookkeeping tasks between two teams, more work items can be handled in parallel. This can assist in completing the month-end checklist without backlogs of routine work building up.
4. Better Workflow Organization
An offshore team would be able to perform from generic checklists and procedures. All recurring bookkeeping functions could be performed uniformly.
CPA firms can establish specific instructions for:
- Reconciliation of accounts
- Transaction encoding
- Summarising ready for exception reports
- Review processes
How to Build an Effective Offshore Month-End Process
Just taking bookkeeping tasks out of the practice does not necessarily lead to an effective workflow. CPA firms need to define procedure and set expectations.
Create a Detailed Month-End Checklist
A checklist should apply all the things that need to be done, to the person that is to do that particular job and the deadline.
Set Clear Deadlines
Timelines should be established for every phase. Offshore resources need to be aware of dates when source documents should be provided, when reconciliation is to be performed, and when you need to get involved for assistance with an exception.Deadlines minimize disruption to closings caused by small delays.
Establish Quality-Control Procedures
Quality control is a process that should be working through the process, not equipment at the end.
CPA firms can use:
- Standard operating guidelines.
- Screening questionnaire
- Exception reports
- Random quality testing
- Periodic performance evaluations
The CPA firm needs to maintain sufficient control over any work that involves professional judgment.
Using Technology for Offshore Bookkeeping
Technology is important as an enabler for the co-ordination of accounting teams across locations.
With cloud accounting software, approved staff have access to up-to-date financial data. Workflow management tools can document what month-end tasks have been finished, are still in progress or are under review.
CPA firms need to have suitable security measures such as the granting of permissions, access restrictions, secure document sharing, and procedures for the management of client financial data.
Reduce repetitive work Automatise even more there are things which you repeatedly do over and over again. Imagine how you could speed up this process.
When Should a CPA Firm Hire a Bookkeeper?
A few firms may decide to Hire a Bookkeeper in-house, whereas others may seek out external bookkeeping services.
Having an in-house bookkeeper should give some direct day-to-day management. Outsourcing allows a firm to access more accounting capacity without increasing the size of the internal team.
The appropriate approach depends on factors like:
- Number of Clients
- The work volume at the end of the month
- Hours of work needed.
- Domestic capacity for how it is run: internal management-capacity
- Kind of wrongdoings in bookkeeping
- Expected business increase
CPAs should decide what model works best for their practice and not treat every bookkeeping circumstance equally.
How Offshore Teams Can Support Growing CPA Firms
Growing CPA practice will have new bookkeeping needs to buy. As you gain new clients you'll need to have increased bookkeeping efforts for more transactions, reconciliations administration/documents, and reporting deadlines.
An offshore support model offers firms the ability to scale processing capacity without losing tight control of the internal review process.
It can be mainly useful for firms that experience:
- End of month backlogs on a monthly basis.
- Challenging to hire bookkeeping staff.
- The presence of an enormous amount of duplicate accounting work.
- Restriction on ability to grow clients within the organization.
One remaining goal is to develop a trustworthy extension of the firm's accounting process. Our objective should not be to transfer work to "another team .
Best Practices for Working With Offshore Bookkeepers
To have conclusive results, your CPA should set expectations in the beginning of your work.
Recommended practices include:
- Clearly identify the tasks that will be contracted out.
- Draft a document that outlines steps for the same procedure that happens frequently.
- Utilize the month-end checklists in a (common) format that is standardized.
- Set defined target turnaround times.
- Develop an escalation process for abnormal transactions.
- Periodic review of the work already done.
- Create a safe environment through proper data-security measures.
- Have periodic meetings to address the operation problem.
The hyper-focus on communication between the U.S. CPA team and the offshore bookkeeper. This is mainly true for the month end close.
During month-end, CPA firms can be overwhelmed, when they have many client accounts to close out at the same time. Utilizing CPA firms offshore bookkeeping can free up bandwidth for day-to-day back-office accounting tasks, enabling CPA firms to focus on review analysis consulting, and customer service.
When the scope is well defined with accountability documentation suitable technology with quality checks, offshore accounting and bookkeeping services can be seamlessly integrated into the month end practices. For growing companies, this can allow a more comprehensive process that also allows for increased client loads and recurring report submission deadlines.
