Keep Your Books Safe and Your Business Growing with Outsourced Bookkeeping Services

Keeping your books safe, accurate, and insightful requires a shift in perspective from bookkeeping as a reactive record-keeping work to a proactive and strategic operation.

Between growing financial reporting pressure, client demand for timely insights, and cloud accounting tools that automate manual bookkeeping tasks, bookkeeping now sits at the heart of compliance, client trust, and business growth.

Meanwhile, CPA firms and CFOs are capitalizing on outsourced services to handle their bookkeeping tasks, which enables their internal teams to focus on advisory services.

“We have really found great success using Finsmart Accounting to automate and do some recurring activities for clients.

For example, they handle our bank reconciliations. They post daily sales summaries for our clients. They import activity from Dext and some special projects that are going to take a lot of time. This has enabled our U.S.-based team to handle the high-level projects. We’ve been super happy with them.”

Juliebeth Melone, Founder & CEO of J B Advisory Group LLC

In this article, we see how outsourced bookkeeping services can help you keep financial records safe while maintaining accurate and insightful information for real-time decision-making.

Compliance Pressure: Why Mistakes Are Costlier Than Ever

Missed deadlines, audits, and penalties

As regulatory scrutiny of companies’ financial reporting activities increases, the margin of error is shrinking every year. In contrast, the pressure on CPA firms to deliver timely and accurate financial data has intensified, just as have the consequences of non-compliance.

Bookkeeping errors and missed tax compliance deadlines result in misreported income or expenses, which attract fines, cash flow challenges, and business decisions that cost clients valuable opportunities.

Staying on top of changing tax regulations without extra staff

IRS guidelines evolve frequently, and CPAs must be up-to-date with these changes to help their clients remain compliant. This leaves understaffed CPA firms struggling to catch up, affecting their ability to help clients claim all available tax credits.

CPAs and other senior accountants should spend more time researching and understanding these changes in tax regulations. When they are occupied with bookkeeping work, it becomes so difficult.

This pressure to stay on top of changing tax regulations (with a small in-house team) also exposes CPA firms and finance departments to bookkeeping errors and team burnout that affect the quality of clients’ tax services.

Internal vs. Outsourced Bookkeeping: What’s Right for Modern Firms?

Here’s how outsourced bookkeeping compares to internal bookkeeping in terms of key aspects like cost, control, and scalability:

Cost:

Internal Bookkeeping: The services of a full-time bookkeeper in the U.S. cost an average of $61,000 a year. Training, employee benefits, and other overhead can cost another 20% of the annual salary. Recruitment costs are also high due to the shortage of accounting talent.

Outsourced Bookkeeping: Outsourcing gives you the equivalent of a full-time bookkeeper for as little as $2600 a month. There are no recruitment costs and employee benefits, which enables you to reallocate their resources to other areas of the business.

Control:

Internal Bookkeeping: In-house arrangement gives you direct control over your bookkeeping team, processes, and data. But most internal teams are stretched thin, often resulting in senior staff’s attention being diverted to low-value bookkeeping tasks.

Outsourced Bookkeeping: Thanks to advancements in accounting technology, most outsourced bookkeeping service providers now offer transparent bookkeeping processes, regulated with real-time dashboards. They also use strict service-level agreements that give CPA firms equal, if not more, control over their financial data and processes.

Scalability:

Internal Bookkeeping: Scaling in-house teams requires full-time recruitments, which is costly and time-consuming, given the shortage of accounting talent. It also requires significant time investment in training and is harder for internal bookkeeping teams to adjust to fluctuating client demands.

Outsourced Bookkeeping: Outsourcing provides bookkeeping talent on a global scale. Professionals are knowledgeable about evolving financial reporting requirements and industry-specific accounting standards, and are proficient in booking technology.

Offshore bookkeeping providers, like Finsmart Accounting, do not require long-term contracts, which enables CPAs and CFOs to hire as many talents as they need and for as long as their capacity needs last.

Outsourcing countries are brimming with bookkeeping talents, so the recruitment circle is much shorter, with top firms completing the circle in as few as seven days. This enables U.S. firms and businesses to scale on demand.

Why global CPAs are embracing offshore bookkeeping

CPA firms, CFOs, and other finance leaders are prioritizing offshore bookkeeping to enjoy:

• Cost Savings: Just as the cost of living and labour is cheaper in offshore countries like India and the Philippines, bookkeeping and other accounting services are accessible at a fraction of the cost in the U.S.

This makes even more sense, given that the cost has no negative impact on the quality of service delivered.

• Access to Expertise: Most bookkeepers are educated in international accounting standards (GAAP or IFRS), up-to-date with IRS requirements, and are equipped with the hard and soft skills to deliver services on the level of a CPA.

• 24/7 Operations: Time zone differences provide a unique advantage to businesses in the U.S., U.K., and other Western countries. This enables Offshore bookkeepers to work while firms in the U.S. are off work (although they can also adjust their work hours to suit their clients’ schedule to achieve real-time collaboration).

Most U.S. firms prefer their offshore teams to work in their time zone to enjoy 24/7 client services and quicker project turnaround.

• Technology Integration: Offshore bookkeeping providers are proficient in the bookkeeping technology CPA firms use, so CPA firms won’t have to overhaul their tech stack. As a CPA firm owner using the embedded offshoring model, your offshore bookkeeping team will work in your workflow systems, processes, and technology, like your in-house team members. It allows you to assign tasks and track their performance in real time to ensure alignment.

Plug-and-Play Offshore Models That Fit Your Firm

The only training your offshore bookkeeping team will need is to guide them on your clients’ needs and your unique operating procedures.

“Our outsourcing partner, The Finsmart Accounting team, already knows the accounting processes. That means I don’t have to train somebody, like I had done in the past.

They were able to hit the ground running, so we were able to hold a meeting with the person assigned to our team, and we walked through the client and what we needed to do, and what their business is about.

Rebecca Santiago, Owner, Advance Professional Accounting Service

These are some of the ways you can engage your offshore bookkeeping team:

• Dedicated Seat:

This model provides offshore bookkeepers who work 40 hours/week, like a full-time staff member. They won’t serve any other firm and will work at your preferred hours. The long-term engagement with your firm makes them familiar with your clients’ needs and standard procedures, which is why it is better suited for CPA firms with consistent workload needs.

• Hourly Seat:

This offers offshore bookkeeping professionals who will serve your firm on an hourly basis. Once they are not attending to your work, the team is serving their other clients. You pay only for the hours they spend on your projects.

This model is best suited for CPAs and CFOs needing help with ad-hoc tasks such as reconciliations, payroll processing, or catch-up bookkeeping.

• U.S. Tax Seat:

With the U.S. tax seat, CPAs, CFOs, and global finance leaders use specialized bookkeeping experts who are trained in U.S. GAAP, IRS regulations, and tax forms (1040, 1120, 1065, etc.). The outsourced bookkeeping team will complete tax-related bookkeeping, compliance, and reporting tasks, and is better suited for CPA firms and finance leaders with complex financial reporting, such as international accounting, SALT, and crypto taxes.

Matching the right engagement model to your workload

Here are the different needs of CPA firms and the type of offshore bookkeeping engagement you should use:

• High-Volume, Consistent Workloads: Dedicated seat that gives them ongoing support with client projects.
• Seasonal or Variable Workloads: Hourly Seat due to its flexibility, which enables CPA firms to add more offshore staff as the need arises.
• Tax and Compliance Focus: the U.S. Tax Seat that provides the specialized expertise needed to manage complex tax and compliance needs.

Security and Confidentiality: How Offshore Teams Keep Data Safe

“Five years ago, I was one of those people who said,
‘I would never offshore.’ I was like, ‘Why would I hand over my clients’ financial information to you on the other side of the world? Why not hire somebody locally that I can groom and teach?
I didn’t understand the outsourcing process.

Then I got to know the Finsmart Accounting team over the last three years. Seeing how the Finsmart team is run has eased many of my fears. Now I feel very secure getting them my client data to work on.”

Patricia Hendrix, Head of Coaching and Communities at Woodard

Common concerns about financial data security

Your concerns for the security and confidentiality of client data are valid. Sharing your clients’ information with your outsourced bookkeeping team in another country could result in any of the following security and privacy violations:

• Data Breaches: Weak data management systems expose sensitive financial data (such as client bank details and tax records) to unauthorized persons, which could cost you and your client a fortune in financial and reputational damages.
• Regulatory Non-Compliance: Failing to adhere to financial reporting standards, such as GAAP, IFRS, or IRS, as well as data protection and privacy standards (including ISO, SOC 2, and HIPAA), violates accounting standards and attracts audits and penalties.
• Loss of control: Some CPA firm owners also fear that outsourcing might weaken their ability to control their workflow processes and hold team members accountable.
• Confidentiality Breaches: Weak data handling systems could also expose sensitive, personally identifiable information to persons outside the firm.

Protocols and tools used by trusted offshore partners

The top outsourced bookkeeping companies use compliance technology and data security measures to ensure the same, usually higher, levels of data security and workflow oversight as your in-house team.

They include:

• Data Encryption and Secure Transmission: Offshore companies rely on tools that use encryption technology to secure file and information transfer between your in-house and offshore teams. It protects files whether they are in transit or in storage.
• Virtual Private Networks (VPN) and Secure Servers: These systems ensure secure socket layer and other data security protocols to prevent local servers from storing your clients’ data.
• Access Control and Multi-factor Authentication: Offshore bookkeeping service providers use multiple verification systems to authenticate a user’s identity before granting access to your financial data.
• Compliance with Regulations: Reputable offshore companies operate within systems that are compliant and up-to-date with international data security standards (like ISO 27001, SOC Type II, IRS standards, etc.).

Other security and confidentiality measures include continuous employee training, real-time monitoring, and advanced data infrastructure, like AWS and Google Cloud.

From Chaos to Control: The Built-In Compliance Advantage

With most firms under pressure to keep up with client demands, given the talent shortage in the accounting industry, offshore bookkeeping provides a system of checks and balances using:

• Trained teams that stay updated on financial laws

Top offshore companies not only employ accounting graduates, but they also ensure their employees are trained and up-to-date on the hard and soft skills needed to meet client deliverables at scale.

Speaking of staying up-to-date on accounting expertise, Offshore bookkeeping providers in India often pair their staff with U.S. organizations to keep them current on changing accounting compliance regulations and client needs.

This helps them maintain a level of accuracy that reduces, if not eliminates, error in client service while giving business owners the confidence that comes from clean, complete, and accurate financial records. This helps businesses to make confident business decisions.

How offshore partners create checks and balances

Offshore companies, like Finsmart Accounting, use a three-layer review process to identify and address errors before submitting their work.

For example, when you subscribe to any Finsmart service, you’ll be assigned a dedicated bookkeeper who will manage your day-to-day financial activities, an Engagement Manager who will manage onboarding and ensure you’re receiving satisfactory services, and a Senior Accounting Advisor who will provide technical oversight.

Combined with your in-house review system, you’ll have multiple review systems that prevent errors in your client’s financial reports during, and especially during, high-pressure periods like tax season, audits, and year-ends.

Streamlined Setup: Transitioning to an Offshore Bookkeeping Partner

The right offshore bookkeeping partner will make your transition quick, easy, and straightforward.

With Finsmart Accounting, it takes just seven (7) days for your offshore bookkeeping team to start working in your systems to meet client deliverables.

What onboarding an Offshore bookkeeping team looks like (Using Finsmart Accounting as an Example)

The outsourcing relationship starts with a meeting to discuss the firm’s capacity needs, client types, and pricing structure.

Once those details are finalized, the onboarding is done in five steps:

• Talent Assigned

At Finsmart Accounting, we will assign our plug-and-play bookkeeping experts to your firm.

• Client Process Training

You’ll integrate your assigned team into your firm’s systems and tech stack to train them on your client processes.

• Test Run Projects

This is where you give your assigned bookkeepers a mock project to measure their accuracy and efficiency.

• Review Test Projects

We will work with you to review the results of the test project and incorporate your feedback into the engagement.

• Team Goes LIVE!

At this stage, you’re satisfied with the bookkeepers we’ve assigned to you. They can start working, serving your clients while you manage their schedule and measure their performance, like your in-house team.

Train once, then scale effortlessly

You won’t have to train every subsequent talent we assign to your firm. At Finsmart Accounting, we document your systems, processes, and best practices for future reference.

When you request more bookkeepers (or want to change your assigned staff), we will train the new resources on your internal systems and processes. This enables you to add more professionals and scale your operations without more upfront investment in time or energy.

The Real ROI: Safer Books, Lower Costs, and Happier Clients

Outsourced bookkeeping delivers return on investment by enabling CPAs, CFOs, and other finance leaders to offload compliance-heavy tasks that drain time and mental resources.

Here’s how they help with that:

• Freeing up internal capacity for advisory and strategic work

When your CPAs are handling time-consuming bookkeeping tasks, they won’t have enough time for strategic and client advisory tasks.

Delegating your repetitive, process-heavy (think: transaction recording, bank reconciliation, etc.) tasks to your offshore bookkeeping team enables CPAs and CFOs to focus on nurturing client relationships and applying their accounting skills to financial situations through financial strategy and cash flow forecasting, for example.

That way, CPA firms can rest assured that their clients’ books are safe and free of errors that can attract regulatory penalties.

Similarly, offshore bookkeepers free up CPA firm owners’ time to pursue opportunities to increase their service offerings and revenue lines without overwhelming their in-house teams.

• Meeting seasonal demand without over-hiring

If you’re going to hire full-time staff every time there’s a surge in client demands, you’ll go through expensive and time-consuming recruitment circles to fill a role that’ll be irrelevant after a few months. When the seasonal workload subsides, you’ll be left paying for services you no longer need.

Offshore bookkeeping enables you to hire as quickly and for as short a period as your workload requires.

The cost of using these services is half the cost of a full-time hire, so you won’t be spending as much money to bring in additional resources to maintain workload balance.

Moreover, the speed of hiring and ease of onboarding offshore teams give you the freedom to delay hiring until the needs arise, saving you the regret of hiring in anticipation of a workload surge that didn’t happen.

Finsmart Accounting: A Safer, Smarter, Scalable Solution to CPA (and CFO) Capacity Challenges

Finsmart Accounting provides offshore bookkeeping experts who have years of experience in international accounting to keep your clients’ day-to-day financial data safe, complete, and accurate.

Our 7-day onboarding period enables CPAs and CFOs to increase their capacity, allowing their internal teams to focus on tasks that drive the most value and growth.

Let’s help you keep your clients financial data safe and your business growing more sustainably today. Click here to book a free consultation now.