Inside: A Proven Blueprint To Be Successful With Offshore Accounting Services

This guide provides a foolproof system that allows ANY company to succeed with offshore accounting services. This system has helped many companies, such as Sara Lee (now Hillshire brands), leverage access to specialized expertise. Hence, it helped them dramatically increase their company’s productivity. 

Once you have read this guide, you will know the following: 

✔️What is offshore accounting? And what are its benefits? 

✔️What to look for in an offshore accounting services provider.

✔️ Difference between offshoring and outsourcing accounting?

✔️How to approach an offshore accounting company… the right way. 

✔️The secret to not just getting work done but getting long-term support in your business. 

What is Offshore Accounting?

Offshore accounting refers to managing accounting and finance matters out of the home jurisdiction, either through a business-owned back office or a third party, usually, an outsourcing agency, says Hasan Usmani, Director of Client Operations at Expertise Accelerated.

Hasan further adds that offshore accounting is gaining popularity because of a range of benefits that accrue with it, including payroll cost optimization, management’s focus on core competencies, administrative convenience, reduced HR liability, tax efficiency, enhanced expertise, and the like.

Hence, offshore accounting might include everything from:

• Bookkeeping, 
• Sales order processing, 
• Invoicing,
• Accounts receivables collections 
• Accounts payable
• Planning and budgeting
• Documenting spending and income to
• Producing financial reports.

What Should I Look for in an Offshore Accounting Service Provider?

Offshore Models: Dedicated vs. Functional

There are two offshore accounting models to choose from. The best model for you depends on your company’s specific needs, resources, and strategic objectives. A well-informed decision will enable you to leverage offshore accounting services effectively and achieve your financial and operational goals.

 

Dedicated Offshore Model

Functional Offshore Model

In a dedicated model, you hire a dedicated team of accountants or financial professionals exclusively for your organization. This team works as an extension of your in-house staff. Pros: High level of control and customization. Close integration with your existing processes and culture. Tailored to meet your specific requirements. Cons: It may require more management and oversight. Higher initial setup costs.

In a functional model, you engage a third-party offshore provider to handle specific accounting functions or tasks, such as accounts payable or payroll processing. Pros: Cost-effective for specific functions. Less management overhead. Access to specialized expertise. Cons: Limited control over the offshore team. Integration challenges for complex processes.

 

Choosing Between Dedicated and Functional Models:

Consider the complexity of your company’s accounting needs. A dedicated model may be more suitable if you require comprehensive financial management. For specific tasks or cost-saving purposes, a functional model may suffice.

Next, you can evaluate your company’s internal capacity for managing an offshore team. Dedicated models require more oversight and coordination. Lastly, assess your long-term goals and the potential for scalability. Dedicated teams offer greater flexibility for growth and evolving requirements.

However, you might be unsure about where to start with offshoring your accounting services. The first step is to know what to look for in an offshore accounting service provider. 

Here’s what you should look for:

• Reputation and Experience

Look for a reputable offshore accounting service provider with a proven track record of delivering quality services. Research online. Look for the offshore accounting service provider’s website, social media profiles, and reviews or ratings on platforms like Google, Yelp, or Trustpilot. This will give you an initial idea of their reputation.

Next, check out their client testimonials, case studies, industry reputation, and experience. An experienced provider will likely have streamlined processes and expertise in handling accounting tasks efficiently. 

• Expertise

There are many ways to identify whether the offshore accounting services provider has expertise in his field. Some ways are mentioned above, like checking testimonials, reviews, etc. 

Financial reporting requirements differ in various countries. Hence, when looking for an offshore accountant, you must know their expertise regarding your home country’s reporting regulations. 

• Reliability

Your offshore accountant may be proficient in accounting, but you must know whether he is reliable. Whether he/she can work with you consistently? Because you are about to stake your company’s reputation (with your customers and clients) based on the offshore accounting services.

A reliable offshore accounting company will have a real domain, an authentic website, and may also have some social media presence. 

• Compliance and Security

Inquire about the provider’s internal compliance checklists and procedures to ensure his services will help keep your company compliant. 

 You have to find a reliable provider who is a good player that you can trust. The outsourcing firm should deliver good results on time. Hence, you must ensure that the provider has robust security measures to protect your financial data and ensure confidentiality.

• Types of Services Offered

There’s no point in appointing an offshore accounting service provider that doesn’t provide the services that your company requires. 

Hence, determine exactly what type of services your company requires to help you gain time and efficiency. 

For example, suppose you require immaculate financials. Then, you will require a team to establish perfect records for you and keep them updated. Or suppose you might require the services of a CFO to advise you on your company’s KPIs. In this case, you will require fractional CFO services.

• Pricing Plans

You might be looking to offshore your accounting services for many reasons. For example, you might seek specialized expertise or want to reduce your costs. 

When hiring someone, you should check the pricing plans the offshoring accounting service provider offers. Many companies have multiple plans based on the size of the company. It is better to compare the pricing to the full-time cost of hiring an accountant. This helps to understand how much costs you are saving. And whether it is really worth it to hire an offshore accountant.

Difference Between Offshoring and Outsourcing Accounting?

Offshore accounting” and outsourced accounting services are closely related. But they slightly differ in meaning.

The following table shows the difference between outsourcing and offshoring:

Offshoring

Outsourcing

Offshore accounting is a category of outsourcing. It involves delegating accounting and financial tasks to a third-party service provider in another country. This means that a company, instead of managing its accounting functions in-house or outsourcing them domestically, chooses to contract an accounting firm or team in a different nation to handle its financial operations. Offshore accounting is often chosen due to potential cost savings, access to specialized skills, or the desire to leverage global talent.

Outsourcing is a broad concept that involves delegating specific organizational functions or tasks to an external third party. These third-party service providers can be based locally or in another country. Outsourcing primarily aims to allow the organization to focus on its core competencies while delegating non-core functions to specialists.

 

Offshore accounting specifically refers to outsourcing accounting functions to another country. Outsourcing accounting services can involve delegating these functions to a third party within the same country. 

Both approaches aim to improve efficiency. But they offer different options in terms of location and expertise. Which one is the best choice for your organization depends on its specific needs and goals and factors such as cost considerations and access to specialized skills.

Smooth Sailing: The Right Way to Approach an Offshore Accounting Service Provider

Here are some of the procedures that you can carry out to ensure that you have the right approach towards offshore accounting services and be successful with it: 

Onboarding 

Onboarding an awesome offshore accounting service provider into your business can be the first step in transforming it towards success.

There is a process of onboarding when a company hires a new employee. However, most companies fail to have a proper onboarding process for the offshore accounting services provider. And this can create problems afterward. 

A proper onboarding process ensures that the offshore accountant you plan to hire understands your business and that his services align with your requirements. 

Trial Period

Starting with a trial period to assess the provider’s capabilities and compatibility with your business can benefit companies in the long run. You can understand whether the offshore company is fit for your business. 

Because it is a duplication of time, if you end up correcting the mistakes of your offshore accountant or have to explain to them their tasks (or what exactly you require) multiple times, then it is not worth it. 

This is also why you must clearly communicate the type of services you require during onboarding.

Communication and Language Proficiency

Communication gaps may lead to long communication chains, confusion on who should perform a specific task, and delays in providing overall business and technical support.

That is why a clear communication channel is vital to succeed with offshore accounting services. 

Again, this is better if it’s communicated during the onboarding process. Ensure the provider understands the time difference and can communicate during office hours when you want him/her to.  

Communication can be difficult at times. A person from Alabama may speak differently than a person from Minnesota! There can be differences in dialect or language when working with offshore accounting services (or any outsourcing company). Communication can be difficult at times. So, again, this has to be discussed beforehand. 

Both parties have to be very clear about their goals. They should both work towards bringing clarity to communication. 

Service Level Agreement (SLA)

Establish a clear SLA with the provider, outlining the scope of services, performance metrics, response times, and dispute resolution procedures. This document will be the foundation of your partnership and ensure that both parties have clear expectations. 

Visit the Office (if possible):

If feasible, plan a visit to the offshore provider’s office to get a better sense of their operation, work culture, and infrastructure. 

Have a Recourse When Things Don’t Go Well

As a client, you have to establish that your potential offshoring accounting service provider is a credible business. There has to be something ( e.g., a license) to validate your provider’s business. So, establish certain things with your provider that you can do if things are going poorly. 

Key Takeaways

There is no doubt if done right, offshore accounting services help fulfill your company’s goals and let you stay on top of things in a price-efficient manner. Offshoring accounting services have many benefits. Companies that take the right approach toward them successfully leverage their expertise, staying compliant and scaling to new heights. 

Expertise Accelerated provides outsourcing and staff augmentation services. We have built a pricing model that allows you to scale. With our experts on your team, you have access to a specialized global talent pool to provide tailored solutions that fit your business needs. We help save payroll costs and deliver process efficiencies. We can help you wherever you are in your journey. You can also strategize better with our experience as we suggest how profits can be increased and costs can be lowered. 

Contact us today and secure your position in the ever-changing business landscape.