Decoding The Dilemma: Offshoring Accounting and Back-Office Needs – Necessity or Choice?
Bridging the Gaps in Accounting and Back-Office Functions for Tech and Accounting Firms with Offshore Services
May 8, 2023
Offshore Accounting: Mitigating The Myths, Finding The Facts
July 24, 2023“Accounting does not make corporate earnings or balance sheets more volatile. Accounting just increases the transparency of volatility in earnings.”
- Diane Garnick, American Investment Manager and Chief Income Strategist at TIAA
Taking care of your accounting and back-office needs is vital for keeping a business afloat, and helps you make the right decisions for prosperous growth. But keeping track of accounting needs has its share of demands and challenges that can’t always be tackled in-house.
Perhaps that’s why more and more businesses are delegating their accounting and back-office needs to an offshore partner. About 71% of financial service companies and executives offshore their back office and accounting needs. The global offshoring market reached a tremendous USD 92.4 billion even before the pandemic hit us. A startling 93% of companies are either considering or have already adopted cloud services to improve offshoring.
Businesses across the globe are unlocking the benefits of offshore accounting and back-office services in many aspects of their business.
Avenues for Offshoring Accounting and Back-Office Services
Let’s take a quick look at some of the major accounting and back-office services that can be easily offshored to an expert to power your profitability, and help you focus better on your core business.
- Bookkeeping : Essential, time-consuming, and one of the most offshored accounting services
- Managerial Accounting: A sharp eye and expertise ensure that all financial goals of your business are met
- Tax Accounting: Compliance with all the major federal and local laws, while keeping track of your business’ financial information
- Accounting Audit: Prevents any non-compliance or malpractices, while keeping an eye on all your revenue streams
- Financial Analysis: Make informed and educated financial investments
- Payroll Services: One of the most offshored, time-consuming services
While the offshore services do not end here, we have covered the major ones. Some other offshore accounting services can include Pay & Bill, Credit Control and Collection, Management Accounting, Consultation, and Forensic Accounting.
Here’s Why Offshore Accounting and Back-Office Services are Fit to Fare Well!
Offshore accounting has become an increasingly popular trend among businesses due to the benefits they bring along. Here’s how your business can benefit from an offshore accounting partner:
- It’s more cost-effective because sourcing, recruiting, and training an in-house team can incur significant investment that can be expensive for your business.
- Having an offshore partner can be timesaving for decision-makers involved in recruiting, training, and supervising their back-office team
- With an offshore partner, you can access industry expertise without incurring a huge amount of expenses on recruiting them.
- You can improve your focus on the core business activities directly related to your business, instead of spending resources on accounting and back-office essentials.
- An offshore partner has industry experts working for them, which enables them to provide efficient, accurate accounting and back-office outcomes.
- Working with an offshore accounting partner is more flexible - you can upscale and downscale your team and investment, per your business needs.
Is Offshoring Accounting and Back-Office Support Services an Ideal Choice?
If you have never used an offshore partner before, it can be a bit difficult to determine whether you need one or not. To help you find the answer, let’s consider two of the biggest factors:
1.Time Investment
If you have outgrown your involvement in every little aspect of your business, then your venture has grown significantly. In such cases, you require more than just bookkeeping and payroll on the accounting front - it’s time to re-evaluate your resource investment and consider working with an offshore partner.
2.Resource Investments
If your business needs to invest more and more in technology, hardware, and other infrastructure need for everyday accounting needs, then your accounting requirements will only increase. Now is the time to consider onboarding an offshore partner for your accounting and back-office needs.
If you are considering joining hands with an offshore partner to take care of your accounting and back-office needs, then consider the following parameters before signing a deal:
- Revenue: Your business’ revenue generation will help you determine the amount of investment you can make in hiring an offshore team for your accounting needs.
- Headcount: The number of employees working in your organisation is one of the key indicators of how many services you can offshore, and how many of them can be handled in-house without overworking your employees.
- Industry: The industry your business operates in will strongly influence your offshore accounting needs and requirements. For example, product-based e-commerce businesses heavily rely on inventory-based accounting.
- Staffing Method: When working with an offshore partner, it’s essential to understand and align with their staffing methods. Availability, flexibility, and employee engagement are crucial to align with.
- Desired Services: Based on the above parameters, the offshore accounting services you may need can range from one to many – all depending on your requirements. Make sure you have wisely analysed the services you require from your offshore partners, and determined a fixed budget for the same.
Should You Set Sail Towards Offshoring Accounting and Back-Office Support Services?
What’s otherwise difficult to determine can be made easy with the analysis of everything we have so far discussed here. Is offshore accounting a necessity or a choice? We have given you the means to decide that for yourself.
If your business falls in line with more than one of the above parameters, then it becomes a necessity. Offshore partners cannot be essential for every business need - but they can be beneficial for almost all. For the most, onboarding an offshore accounting and back-office partner is a more economical, efficient, and accurate financial choice.
So, now we conclude with a question for you - is offshoring accounting and back-office needs a necessity or a choice for you? You know the answer.
Connect with IMS Decimal, and gain valuable perspectives to make informed decisions.