Why Your Accounting Firm Should Consider Hiring Offshore Employees

Following the 2008 financial crisis, compliance demands have continued to increase. Meanwhile, accounting firms in the U.S., U.K., and Australia are struggling to find qualified local accounting talent to manage the resulting workload.

This has created bottlenecks in their hiring process and increased their payroll costs.

“I found myself in a very unique position where I was having a hard time finding the right fit for the right price.

I needed to fill two vacant positions, and I could not find accounting talent with the right skills that were not priced outside our budget.”

—Rebecca Santiago, Owner, Advance Professional Accounting Service

This challenge leaves accounting firms to either insist on only hiring accountants or cast their nets wider beyond their borders. This second approach has helped forward-thinking firm owners, like Rebecca, set their firms up for long-term success.

This article shows why offshore hiring should be part of your long-term workload and capacity management strategy.

Why the Offshore Accounting Trend Is Growing

Rise in remote and offshore teams for accounting firms

Accounting used to be a strictly localized profession. A combination of factors — such as a widely accepted remote work culture, advancement in cloud technology, and a highly trained offshore workforce — has made offshoring more appealing to firms already struggling to fill vacant positions.

Offshore destinations like India and the Philippines have become sources of a steady supply of accounting professionals who are ready to provide seasonal or year-round support, serving as an extension of your firm.

Key challenges in hiring local accounting talent

• • An Aging Population: The older generation of accountants is retiring fast, but that’s not the main problem. Fewer and fewer students are entering the accounting field.

While 75% of CPAs are retiring, registration for the CPA licenses saw a 7% decrease between 2021 and 2022, according to the 2022 AICPA/CIMA Annual Report.

• • Increase in Hiring and Labor Cost: Competition drives up cost. The short supply of accounting talent has led to an increase in local recruitment costs. The hiring process has gotten slower as well.

Since there are more jobs for the few qualified accountants, they spend more time weighing their options before deciding between multiple firms. When they finally commit to your firm, high-demand talents are more likely to be on the lookout for better opportunities.

• • Fewer Job Applications: Job postings receive fewer job applications, which reduces the odds of finding suitable accounting talent. As a result, you recruiters have to post the same vacancy on several platforms and wait a long time to receive enough applications.

These factors have led many firms to look beyond geographical borders for their recruitment. Meanwhile, the business process outsourcing industry in India is expected to grow at a 12.9% CAGR  between 2025 and 2030, making it a ready destination for U.S. firms having staffing challenges.

The Core Benefits of Hiring Offshore Accounting Employees

1. Cost Savings Without Compromising Quality

Accounting firms that have turned to offshoring have seen a reduction in their operating costs, and that makes sense because the quality of their work has remained standard, if not better.

Offshore accounting employees are up to 70% cheaper than accountants in the U.S. due to the difference in labor costs, and other factors that have nothing to do with the quality of accounting work or the competence of the offshore accountant.

Category	Cost
Salary Costs	Indian accountants earn $2,600 a month (compared with $4,700 in the U.S., U.K., or Australia).
Infrastructure Costs	Offshore providers usually take care of the costs for office space, utilities, and IT systems. You don’t have to pay an additional fee for this.
Hiring Costs	Offshore accountants are pre-vetted by the offshore companies. They handle the sourcing, background checks, and compliance with labor laws. Local hiring will require you to invest in job postings, interviews, and training.

How offshore teams help reduce overhead expenses

Overhead expenses in offshore countries are much lower to start with. Even then, offshoring providers take care of these expenses. Usually, the only expense you have to make is the subscription fee for the accounting professional assigned to your firm.

2. Access to a Skilled Global Talent Pool

Offshoring opens you up to a large population of qualified accounting professionals all over the world. Trained in GAAP, IFRS, and IRS regulations, these professionals know what it takes to deliver accounting projects (such as bookkeeping, tax, audit, or CFO support) that meet applicable standards.

In India, for example, the rigorous academic training supervised by the Institute of Chartered Accountants of India (ICAI) prepares graduates for global service delivery. In addition, offshore accounting teams facilitate trainings that help their employees fill the gaps in their hard and soft skills. They do these sometimes in partnership with U.S. organizations.

The average offshore accountant has years of experience serving businesses in their accounting jurisdiction and industry. They have a track record of handling accounting projects of different difficulty levels, which makes their impact immediate.

3. Increased Efficiency & Faster Turnaround Time

Offshoring your accounting services means your firm is working across time zones. Meaning the tasks you assign today get completed overnight and are ready for your review when you wake up tomorrow morning.

Another way offshoring improves efficiency and turnaround time is its ability to take on process-heavy work like bank reconciliation and tax preparation. By taking on these low-margin tasks, offshoring gives your internal team more room to focus on doing work that moves your firm forward.

Their proficiency in accounting technology enables them to complete time-consuming tasks faster without sacrificing accuracy.

4. Scaling Your Accounting Firm with an Offshore Team

However, you look at it, growth demands additional capacity. But instead of hiring and training local staff, which is expensive and time-consuming, Offshore staffing gives you plug-and-play accountants ready to go.

This gives you the flexibility to take on more clients, create new revenue lines, or simply free your core team from labor-intensive tasks. Even better, you are not bound by a long-term contract, so you can opt out of the offshoring relationship once you no longer need it.

Moreover, most offshore providers do not have a minimum number of professionals you can hire. Whether you need one full-time accountant or 10 seasonal tax preparers, the choice is all yours.

In any case, Offshoring enables you to respond to a surge in workload without burning out your in-house team.

5. Compliance & Data Security in Offshore Accounting

Offshore accounting providers understand the severity of data breaches and non-compliance with data privacy regulations. The top firms have advanced security systems that ensure their clients do not lose sleep over the security of their clients’ data.

Common data security measures in offshore accounting include global data protection standards and practices, such as:

• • ISO 27001: This internationally recognized security standard certifies an offshore provider’s capability to manage data using measures like access control, an incident response plan, and other approved data handling procedures.

• • SOC 2: System and Organization Controls (SOC 2) reports evaluate an offshore service provider’s controls related to security, availability, and confidentiality. This certification shows that an offshore firm has been independently audited for data governance, encryption, access control, and monitoring standards.

Other compliance certifications and security measures are multi-factor authentication, encryption protocols, and dedicated firewalls.

Offshore providers also allow Non-Disclosure Agreements (NDAs), which prevent them from sharing your client’s information with a third party.

The key to choosing a secure offshore partner is vetting providers for their security certifications and aligning with relevant compliance standards. Speak with their current and existing clients to understand their track record. Client testimonials and case studies are also helpful in this case.

Common Concerns (and How to Address Them)

a. Data Security

The idea of sharing your client information with a third party is never comfortable. But knowing the data security policies and capabilities of your clients will put your fears to rest.

For instance, top offshoring companies use biometric access verification, multifactor authentication, managed switches, and tools with encryption in addition to their compliance with data security regulations.

b. Communication and Time Zones

The difference in time zones between countries seems like a challenge at first. But on a second thought, you realize it’s not.

First, you can establish time zone overlap with your offshore partner to meet every day, week, or month and review performance and align expectations in real-time. On second thought, many U.S. firms have taken advantage of this difference to deliver overnight work, since the offshore team will be at work during their off-business hours.

For language barrier, that is why we encourage firms in the U.S., U.K., and Australia to hire from English-speaking countries like India and the Philippines.

The offshore providers in these countries ensure their employees are fluent in English and can comfortably collaborate with their clients.

c. Quality of Work

It’s only when you don’t know the accounting skills and expertise available in countries like India that you will be worried, as Patricia was.

“One of my preconceived notions was that offshoring outfits were like labor pools that just hired anybody from the street and made them bookkeepers. I have found that that’s not the case at all.

Clearly, Finsmart Accounting has very high standards for their team, and this is as much as any legitimate accounting practice as anything that we would have.”

—Patricia Hendrix, Head of Coaching and Communities at Woodard

The quality of accounting work depends on the level of training a professional has and the process provided to get work done, and offshore accountants can demonstrate their expertise using your systems and processes. Having learned accounting in school, Indian accountants are trained in GAAP and IFRS standards that enable them to serve U.S. businesses satisfactorily.

d. Loss of Control

No matter the responsiveness of the offshore team you’re working with, Offshoring requires you to give away some level of control, especially if all you do is throw your work to the offshoring firm and wait for the completed work.

That is why Finsmart Accounting encourages the embedded offshoring model. This model gives you a dedicated professional who works in your workflow systems, like your in-house team. This gives you more visibility into their work and performance.

Key Accounting Services That Can Be Offshored

Bookkeeping Services

Arguably, the most common service firms outsource, offshore bookkeepers are trained to handle all day-to-day financial reporting tasks like recording journal entries, categorizing expenses, reconciling bank and credit card accounts, and managing the general ledger.

They are proficient in bookkeeping software (QuickBooks Online, Xero, and NetSuite). They use these tools to access real-time data and maintain clean, audit-ready books.

Not long ago, Susan Cook, who specializes in QuickBooks training, sales, and integrations, contacted Finsmart Accounting to help her client with a massive QuickBooks Online cleanup covering three years of financial data.

Finsmart Accounting used a structured approach, clear communication, and meticulous execution to complete the project, giving Susan’s client accurate financial records to inform their decisions.

Read more about Susan’s experience here

Offshoring this service saves U.S. firms time and frees up their internal resources for improving their strategic position.

Accounts Payable & Receivable

Offshore accountants help to manage the accounts payable and receivable process by processing vendor bills, sending payments, issuing client invoices, and following up on outstanding receivables to prevent late payments.

Offshore accountants will help you avoid late fees, maintain good vendor relationships, and ensure healthy cash flow.

These professionals are trained in relevant AP/AR software (such as Bill, Tipalti, and HighRadius) that enables them to spot payment irregularities and prevent fraud.

Payroll Processing

Payroll is another time-consuming service you can offload to your offshore team. They understand what’s required to calculate employee salaries, allocate benefits, deduct taxes, and generate pay slips in compliance with federal and state regulations.

Given the right tools (Gusto, ADP Run, etc.), your offshore team can handle your client’s payrolls to free your time up for the kind of work you want to do.

Tax Preparation & CPA Services

Offshore companies provide accounting professionals who specialize in the tax laws of different countries, especially the United States of America.

For example, Finsmart Accounting’s U.S. tax specialists use their training in U.S. tax law to prepare individual (1040), corporate (1120), partnership (1065), and trust (1041) returns for businesses. Most accounting firms assign a senior staff member to oversee their work for quality control before the tax is filed.

“Working with the Finsmart Accounting team is like having an expert sitting next to you. We usually just hand them the work, and once they finish it, their supervisor will review it and get back to me. I usually glance through it because everything is always perfect at this point.”

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

Financial Reporting & Auditing

Offshore accounting teams use their understanding of GAAP and IFRS to prepare financial statements like the balance sheet, income statement, and cash flow report.

They also contribute to financial audits by compiling data, reviewing records, testing procedures, and organizing the provided By Client (PBC) list.

By taking on time-consuming audit tasks, offshore accountants enable your in-house team to focus on the most delicate aspects of the audit process, which helps your team identify any material misstatement.

Finding the Right Offshore Accounting Partner

As more accounting firms in the U.S, UK, and Australia shift to offshoring as part of their long-term growth strategy, the tendency to find unreliable offshore providers will increase.

Creating an evaluation checklist will be crucial to the due diligence process of finding a suitable partner.

Your checklist for evaluating offshore providers should cover the following:

• • Vet Experience Serving Businesses in Your Jurisdiction and Industry: If you’re a U.S. firm, choose a provider with a track record of serving U.S. businesses.

That would help you land providers that have delivered accurate financial reporting using the relevant standards (GAAP, IRS, etc).

• • Evaluate their hiring process: how the provider sources their employees will tell a lot about their team’s expertise. Usually, offshore accounting providers have very high recruitment standards, but this step will help you determine how their qualifications will help your firm.

• • Review Staff retention rate: If your offshore provider loses staff frequently, you will have to re-onboard their new hires every time there’s a turnover. This will affect workflow continuity negatively.

“The other overseas contractor we use had massive turnovers frequently, and I was having to explain and go over my SOPs with their new employees on a regular basis.”

—Elizabeth Bergen, owner of Foray Business Group

• • Evaluate Data Security Infrastructure: You also need to understand their data security system. Ask about their data protection measures and compliance with international standards (GDPR, ISO 27001, SOC 2, etc.), including the security of their physical environment.

• • Understand Pricing Structure: A firm like Finsmart Accounting requires you to pay a monthly (or hourly) subscription fee for a dedicated accounting professional.

Other firms are different, and that difference might be connected to the introduction of hidden fees that will inflate your costs down the road.

• • Establish Communication Channels and Frequency: Time zone difference is a huge factor in offshoring. Your offshore partner can either adjust their shifts to communicate and collaborate with you in real time, or you can schedule weekly meetings and check-ins while allowing them to work in their schedule.

How Finsmart Accounting’s Offshore Solutions Help Accounting Firms Scale

In Finsmart Accounting, for example, we have professionals who specialize in serving different countries, industries, and business structures. They are up-to-date with your clients’ evolving needs and are constantly up-skilling to remain valuable to the assigned firms.

Our embedded outsourcing model allows you to integrate our employees into your work system, culture, and processes, giving you more control over their performance.

Many firms working with Finsmart report not just cost savings, but improved workflow efficiency and the ability to take on more clients.

“One of the things my internal team appreciates is that Finsmart bookkeepers have integrated well into our team. We have regular meetings with them, and my internal staff enjoys their efficiency and productivity.”

—Elizabeth Bergen, owner of Foray Business Group

Is Offshore Hiring Right for Your Accounting Firm?

If you can relate to any of the following scenarios, you need offshore employees to strengthen your in-house team more than you realize.

• ➤ You are facing high employee turnover and finding it difficult to hire local talent.
• ➤ Your core team is spending too much time on low-margin tasks like data entry or reconciliations.
• ➤ Your team is stretched too thin during tax season or the monthly close.
• ➤ You want to expand your service offerings into advisory, tax, etc., without breaking the bank.

These all point to your need for an offshore accounting team, but whether your firm is ready for it is the question you need to answer by yourself.

To help you with that, we have created this offshoring readiness checklist to help get your firm in the right shape for a profitable offshoring relationship. Click here to download it.

Our offshoring expert is also available to speak with you for free. Book a free consultation with Finsmart Accounting here.