Why More U.S. CPA Firms Are Turning to Outsourced Bookkeeping Services for Seasonal Support

Does the word “relax” describe your busy season? It can and it should.

But with the anxiety, long hours, and burnout of the previous tax season still fresh in your mind, a relaxed tax can feel like a pipe dream, and that’s not surprising.

More CPAs are taking on day-to-day bookkeeping tasks (in addition to their high-level, strategic tasks), which sucks time and mental energy out of your senior team members.

This article explains how outsourced bookkeeping services help CPA firms, such as Blue and Co., J B Advisory Group LLC, and Collins & Ganley, to focus their core teams on their core services.

“I use Finsmart to outsource the transactional side of my client’s business. I am loving the service, and I’m recommending it to everyone.”

Alicia Hoffman, CPA

Seasonal Bookkeeping Strain for CPA Firms

Why Tax Season Creates Bottlenecks

The tax season for individuals and businesses is about staying compliant; for the government, it’s about keeping businesses transparent and accountable, but for CPAs, it means:

• Surge in Client Demand: While CPA firms generate most of their revenue during tax seasons, the accounting staff, especially those handling process-heavy compliance tasks, work the hardest.

As the accounting talent shortage continues in the U.S., more CPA firms are finding themselves relying on their senior staff for low-level tasks (such as cleanup, reconciliation, etc) than they would like. This decreases their focus and blurs their sense of judgment.

• Complex Compliance Requirements: As the government seeks to provide a more secure and transparent economic system, it’ll create more financial regulations, each with its unique demands.

This has increased the burden on accounting and bookkeeping teams to ensure their clients not only comply with the complex requirements, but also find ways to help their clients save money.

These teams invest more time in researching and staying up-to-date with ever-changing accounting and bookkeeping standards, IRS regulations, which require more hands and external reinforcement.

• Client Delays: Clients often submit files late, and this creates a backlog of individual and business returns that you need to file taxes before the deadline.

CPA firms using manual data collection systems risk leaving too much work to the last minute.

Limitations of in-house staffing during busy periods

In-house staffing has proven time and time again incapable of handling the client demands of busy accounting periods due to the following challenges:

• Burnout and Employee Turnover: Most in-house staff find themselves working between 60 and 80 hours a week during the busy season, which increases the likelihood of team burnout, higher errors, and client dissatisfaction.

• Hiring Constraints: Accounting and bookkeeping talents are scarce in the U.S., and the competition for available talent makes the hiring process slow and expensive for small and mid-sized CPA firms.

• Cost Inefficiency: Hiring a full-time staff might seem smart while the busy season lasts. But it will end, and once it does, the workload will subside, and the employee costs will put unnecessary pressure on your budget.

What Outsourced Bookkeeping Services Offer

Key Tasks Handled Remotely

• Transaction Recording and Categorization: Outsourced bookkeepers record and post financial transactions into appropriate ledger accounts in the general ledger software for accurate financial reporting.
• Accounts Payable and Receivable Management: They also process vendor invoices and track client payments to nurture valuable vendor relationships and maintain a healthy cash flow, respectively.
• Bank and Credit Card Reconciliations: Your outsourced bookkeepers compare your general ledger records with bank and credit information to identify missing or incorrect entries.
• Payroll Processing: Calculating total earnings, making payments, and filing payroll taxes in compliance with federal and state regulations to eliminate the risk of financial non-compliance and penalties.
• Clean-Up and Catch-Up Bookkeeping: Outsourced bookkeepers can reconcile and bring your client’s past and current financial data up to date.

Online, Virtual, and Part-time Models

• Online Bookkeeping: Online bookkeeping is delivered using bookkeeping software, such as QBO, Xero, or any other cloud-based software, that allows clients to upload relevant documents into the system for processing.

In this bookkeeping model, your client’s employees, who are not bookkeepers, can perform bookkeeping tasks (in the bookkeeping software) when given the right training. In that case, professional bookkeepers will be called in to handle more complex financial reporting work.

• Virtual Bookkeeping: In virtual accounting, bookkeeping teams work remotely (using project management software, emails, video calls, and other secure collaboration platforms) to provide bookkeeping services to clients in a full or part-time capacity.

This eliminates expenses on physical office, work commute, and overhead costs, and team members can work from different parts of the world.

• Part-Time Bookkeeping: Part-time bookkeeping outsourcing is a flexible arrangement where firms engage bookkeepers for specific client projects on a seasonal schedule.

The duration of the engagement is clearly defined from the beginning. The part-time bookkeeping staff’s engagement ends upon completing the project for which they were hired.

Integrating with your firm’s existing systems

Outsourced bookkeepers work within your existing workflow systems to minimize service disruptions, improve visibility into their work, and enable seamless collaboration.

You will integrate them into your existing systems and processes by sharing login information (usernames and passwords) for relevant apps and assigning them the tasks they need to complete.

Outsourced bookkeeping service providers are knowledgeable about the software solutions needed for effective bookkeeping operations:

• Accounting Software: QuickBooks Online, Xero, Sage Intacct, NetSuite, Wave, etc.
• AP/AR Tools: Bill.com, Melio, Plooto, Veem, etc.
• Payroll Tools: ADP, Gusto, Patriot, etc.
• Task Management: Financial Cents, Karbon, Jetpack Workflow, etc.
• File Sharing & Communication: Dropbox, Google Drive, Slack, Teams. Zoom.

Why Outsourcing Is Ideal for Tax Season

Outsourced bookkeeping provides access to the expertise, technology, and flexibility that CPA firms need to manage the intensity of the busy season, meet all client deliverables, and hit regulatory deadlines without sacrificing their work quality and work-life balance.

Here’s how:

• Temporary CPA Workload Relief

Tasks like journal entries, cleanup, and payroll-to-book reconciliation form the largest bulk of work leading up to the tax season, and outsourced bookkeepers handle them effortlessly to allow your in-house team to focus on review and high-value work like tax preparation, client communication, and advisory.

This will not only provide CPA workload relief, but it also enables them to do more accurate work, turn tax projects around faster, all while keeping labor costs low.

Interestingly, hiring outsourced bookkeepers is faster and easier. With Finsmart, your bookkeeping team can start delivering value in as few as seven (7) days. This makes it useful for quickly fixing your capacity challenge during tax season.

• CPA Team Support without Long-Term Commitment

Another advantage of using outsourced bookkeeping services is the flexibility of the contracts. You don’t need a long-term contract, and firms like Finsmart offer different engagement models like project-based, part-time, or full-time equivalents that allow you to engage outsourced bookkeeping firms for as long as your workload demands.

This means you wouldn’t have to keep bearing the costs of this service when the busy season ends and your needs reduce.

Use Cases for Peak-Period Outsourcing

U.S. CPA firms use outsourced bookkeeping services when they need:

Cleanup for Tax Clients: Many businesses, especially those doing their books internally, do not have well-organized financial data. Hiring outsourced bookkeepers can help to clean up their records to enable your CPAs to do their best work.

Support for Staff Shortages: A team member could become unavailable during the busy season for any reason. In such cases, outsourced bookkeepers can step in to maintain the workload balance in your firm.

Multi-Entity: Businesses with complex reporting requirements, such as multiple entities or locations, can outsource bookkeeping tasks like consolidation and intercompany reconciliation.

How to Onboard an Outsourced Bookkeeping Team

Outsourced bookkeepers have the expertise. What you need to do is align them to your in-house tools and your workplace culture.

Short-term Hiring Process

Here’s how to hire a remote bookkeeping team that aligns with your team’s culture, even if you’re bringing them in for a single project.

• Define the Scope of Work: The journey to a successful onboarding starts with hiring experts for the tasks you need help with, and that depends on your ability to identify the bookkeeping tasks you want to outsource, determine the volume of work, and the duration of the outsourcing engagement.
• Select the Right Provider: You either partner with an offshore firm (which is the most popular option), use a local outsourcing firm (if you have the budget for it) or get freelancers from accounting marketplaces (if you have the time to invest in background checks and the risk appetite as some of them can be unreliable).

Once you have figured that out, create a list of outsourcing providers based on relevant criteria: bookkeeping experience, familiarity with Generally Accepted Accounting Principles (GAAP), and proficiency in accounting technology, to mention a few.

• Interview and Assessment: The interview stage allows you to assess potential partners based on your bookkeeping requirements to ensure they are qualified to serve your clients. A skills test is helpful here. Give them a test project to see them in action and make your decision based on their performance.
• Sign Engagement Letters: This is where you and your outsourcing partner agree on the project scope, payment terms, data security and confidentiality, communication (and reporting) frequency, and every other aspect of the engagement with a signature.
• Assign Tasks: Finally, give your outsourced staff access to the work and client information they need to complete their work.

Training and Workflow Alignment

Since outsourced bookkeepers already have the necessary accounting expertise, you can help them deliver maximum service by training them on your best practices using:

• Orientation Session: This acquaints your outsourced team with your services, team structure, and tech stack.

At the end of the orientation, your outsourced bookkeepers should understand the client they’ll work on, what success in that role looks like, and how to escalate issues.

• Task Documentation: Standard Operating Procedures (SOPs) make bookkeeping tasks easier to complete by giving your new team members a checklist of what to do at each stage of their assigned tasks.

Some firm owners go as far as using videos. Thanks to tools like Loom, they record themselves performing the tasks the outsourced bookkeeper will be handling. This visual approach makes the workflow process more memorable.

• Assigned Team Lead or Point of Contact: An in-house team lead or contact person can provide your outsourced bookkeeper with a stronger sense of support and accountability.

This person won’t only review the outsourced team’s work, but they will also be a system of support when the external bookkeeping experts need assistance.

• Process Alignment: This helps you establish the client’s expectations, project turnaround times, review process, communication tools, and reporting frequency to effectively communicate expectations.

Tools and Platforms Used

The rise of outsourced bookkeeping services is due to the growth-enabling technology that ensures secure and central team and client collaboration.

These tools include:

• Accounting Software: General ledger software for tracking financial data (sales, purchases, payments, receipts, etc.). Popular examples are QuickBooks Online, Xero, NetSuite, and Sage.
• Practice or Project Management Software: workflow management software that enables you to assign tasks to your outsourced team, set deadlines, track progress, and manage team capacity to ensure all projects meet deadlines. Examples are Financial Cents, Jetpack Workflow, and Karbon.
• Communication Tools: These are tools used for live meetings, training sessions, onboarding calls, and weekly check-ins (Zoom, Google Meet, Microsoft Teams, Slack, etc.).
• File Sharing and Security: Secure apps for sharing sensitive client information like bank statements, receipts, tax forms, etc. Examples include: SmartVault, ShareFile, and Dropbox.

In-House vs. Outsourced Bookkeeping During Crunch Time

Speed and efficiency comparison

• Speed:

In-House Bookkeeping: The familiarity of your in-house team with your client needs and processes should make them faster at getting the job done, but tax season overload often stands in their way. By juggling multiple responsibilities, an overwhelmed in-house team is slower and prone to errors during crunch time.

These errors can lead to several rounds of rework that further slow the team down during tax season.

Outsourced Bookkeeping: While they may require a few days to align with your systems and processes, they have the advantage of focus. They are not bogged down by several other tasks that the average in-house employee struggles with. This focus on the task at hand enables them to work much faster and accurately.

Additionally, the time zone difference in offshore destinations like India offers the benefit of overnight work. That means that the work you assign today will likely be completed by the time you resume work tomorrow.

• Efficiency:

In-House Bookkeeping: Many in-house teams rely on manual systems (think spreadsheets) to manage work. They are more likely to rely on manual processes for bookkeeping tasks (such as reconciliations and client data collection).

By chasing clients for additional files and information, for example, in-house bookkeeping teams waste valuable time and energy that could be used for other projects.

Outsourced Bookkeeping: Outsourcing relies on cloud technology (think QuickBooks Online, Xero, Botkeeper) built with automation. This enables outsourcing teams to automatically complete tasks like data entry, credit card reconciliations, and client data collection during the busy season, which enables them to devote their time to the most important tasks.

• Cost and Flexibility

Factor	In-House Team	Outsourced Team
Salaries	$4,320	$2,600
Flexibility	Hard to increase or reduce hours. Scaling down post-busy season requires compliance with employment contracts that include severance costs.	Doesn’t require long-term commitment, making it easy to add or reduce capacity. You can add outsourced bookkeepers for a 1, 2, or 3-month project, depending on your needs.
Training and Onboarding	While existing staff are familiar with your systems and processes, new hires require training and onboarding.	They are proficient in bookkeeping, but need to be integrated into your systems and processes.
Hiring Constraints	Difficult. Talent shortage is worsening, making the available talent too in-demand and unavailable for short-term roles.	Outsourced bookkeeping services offer a large pool of expert bookkeepers that you can plug and play.

Avoiding Burnout in Your Core Team

With most CPAs’ work schedule extending to as much as 80 hours a week during tax season, the chances of physical and mental exhaustion are highest, leading many CPAs to consider other career paths.

CPAs in smaller firms sometimes help with lower-level process-driven work, which further overloads them in a way that the usual bonuses, compensatory time, and post-season breaks cannot address.

Outsourced bookkeeping service prevents employee burnout by delegating the routine tasks to external bookkeepers, which frees up your in-house team, lets everyone handle the tasks they are better suited to handle, and makes your team’s schedule more relaxed.

Finsmart Accounting: A Bookkeeping Partner You Can Rely On

Based in India, with offices in New York, USA, and other countries, Finsmart Accounting provides scalable, flexible, and tech-driven bookkeeping services to CPA firms.

Beyond its service offerings, here are the key aspects of its services that have made it a CPA firm favorite.

Key qualities to evaluate

• Expertise and Compliance: Finsmart’s bookkeepers are not only knowledgeable about the U.S. GAAP standards and tax regulations, but they are also up-to-date with changing regulations. This increases their expertise and relevance to clients, which has helped their clients stay with them for an average of nine (9) years.
• Scalability and Flexibility: Finsmart’s proprietary “Accounting Seat” model offers pre-vetted, expert bookkeepers who will integrate into your firm. They will work within your workflow systems and processes.

This provides maximum visibility into your outsourced bookkeepers’ tasks and performance, which helps you measure performance and maintain accountability.

• Technology Integration: Finsmart’s professionals are proficient in software solutions, such as QuickBooks, Xero, NetSuite, SAP, Financial Cents, Bill, etc. This enables them to work in your existing tools.

“The Finsmart team can work with any software you have. QuickBooks Desktop, QuickBooks Online, Xero, Bill.com, you name it!

Another good thing about Finsmart Accounting is their experience. There is no learning curve, so we don’t have to train anybody. They’re already trained.

Mariko Hayashi-Hall, Founder and CEO of Chicago-based Brilliant Solutions Group

Building a Trust-based Working Model

Considering the sensitivity of information involved in outsourced bookkeeping services, trust is a critical factor for a successful outsourcing relationship.

This works best where there is:

• Transparency and Communication: Finsmart provides its clients with daily updates, weekly review calls, and monthly management reviews.

More importantly, they can adapt to their client’s communication style, channels, and frequency, just to ensure you are getting maximum value from the working relationship.

• Data Security: Finsmart Accounting’s outsourced bookkeeping service uses data encryption technology, need-based access control, client-server data retention, and other data security measures to prevent unauthorized access while complying with relevant data security regulations.
• Relationship-Driven Approach: The Finsmart team intentionally attends accounting conferences, like Intuit Connect, XEROCON, and AICPA ENGAGE, in their efforts to meet, engage, and build long-term relationships with their clients.

“I especially love Manjiri (our dedicated staff). She takes such good care of us, and she’s very diligent. She’s just a great partner to work with. I love working with the Finsmart team.”

Alicia Hoffman, CPA

Aligning Technology, Timing, and Communication

Here’s a bit of how Finsmart aligns technology, timing, and communication to meet your firm’s needs during tax season:

• Technology: In the bid to save you the cost and stress of switching between software solutions, the Finsmart team trains its staff to be proficient in the accounting technology that CPA firms already use.

From QuickBooks Online to Xero, to Sage, and NetSuite, the team not only knows how to use them, but they can help you implement them and set up systems that make your workflows more structured and efficient.

By integrating smoothly into your tech stack, Finsmart keeps the focus on the work that needs to be done.

• Timing Flexibility: Finsmart adjusts its work hours to align with each client’s preferences. This strategy enables them to work at your preferred work hours (real-time, overlapping, or overnight hours).
• Communication: Finsmart’s professionals are fluent in the English language, so collaboration with your firm wouldn’t be a problem even if you want them to be client-facing. They are also comfortable collaborating with your team and clients in email and messaging apps.

“We are really happy with our communication with Finsmart. We can understand them quickly, and we’ve been able to communicate with them very easily.”

Nancy Orben, CPA at Blue and Co., LLC

If you want to understand how outsourced bookkeeping services can address your specific needs, select a time here to book a Free Consultation session with our expert now.