Just like almost all other fields of business, offshore accounting has revolutionized and moved a step closer to digitalization. From bookkeeping to tracking financial data and tax reporting – automation in accounting is at its peak. Most firms use automation tools and have streamlined their processes. The method of streamlining has become easier as more and more small CPA firms partner with offshoring partners to meet the daily tasks.
In the world of accounting and finance, transparency is a necessity and not just another buzzword. For small CPA firms, achieving transparency, especially while offshoring, can be truly tiring. Firms of this size lack the capital, resources, and means to keep up with everything needed for effective monitoring. Yet, to maintain client satisfaction and quality, it is important to maintain transparency with the offshore partner. As accounting automation becomes one of the most significant factors to impact the future of the accounting industry and 82% of small businesses move towards outsourced functions, small CPA firms will be compelled to focus on devising strategies that enable effective monitoring in offshoring.
That’s why Finsmart Accounting – trusted globally for accounting outsourcing services – is here to talk about major monitoring challenges faced by micro CPA firms while offshore bookkeeping work. Our team has also come up with proven work monitoring tips as well!
Let’s start!
Challenges of micro CPA firms in offshore monitoring:
Small CPA firms constantly work towards gaining more work. They are often posed with unique challenges in their day-to-day operations as they take up accounting tasks for different kinds of businesses. Some of these challenges include:
Lack of resources: Micro CPA firms have a small team with a constrained budget. In such organizations, one person has to wear multiple hats, constantly striving to fulfill several roles. Investing in advanced technology and having a dedicated team or means for an in-house monitoring system can get extremely difficult.
Diverse client base: The industry from where the small CPA firms receive task orders is varied. The diversity can often complicate transparency efforts.
Regulatory compliance: The regulatory standards and laws are similar irrespective of the size of the firm. For smaller CPA firms, it can be challenging to meet them without specialized tools and the right kind of available expertise.
Now that you have some idea of the major challenges faced by micro CPA firms in terms of offshore monitoring, let’s discover recommendations to overcome them.
Overcoming offshore monitoring challenges
Small CPA firms are posed with a variety of challenges. However, the right approach can help solve them, especially when dealing with offshore teams. The below tips will help you overcome offshore monitoring challenges:
1. Managing trust and security concerns: Data security is one of the top concerns when it comes to offshoring for accounting firms. If this is your firm’s concern as well, make sure to look for an offshore partner that has worked with clients similar to yours, has a proven track record of quality output, is reputable and reliable, and has a stringent data security policy.
2. Thorough transition: When onboarding an offshore partner, it is important to follow rigorous methods of transition. This helps make sure that the team is aligned with the firm’s vision and goals. Training the team the right way and preparing them to undertake all responsibilities is key to ensuring the success of the partnership.
3. Customization: The needs of your clients are unique and that is why the offshore team needs to tailor solutions as per their unique needs. It also includes the software used. The team must have the ability to learn and adapt to new technology fast. This enables effective solution design.
Now, it’s time to learn about maintaining transparency while offshoring some of your accounting or bookkeeping work.
Maintaining transparency while offshoring
Transparency is important in offshoring as it enables the team to understand the concerns of the clients and solve them the right way. Below are some of the solutions that are easy to adapt and do not require too much additional effort or investment.
1. Data Integration: When working with an external team, it is important to keep them updated about all the financial data sources. The team should be made aware of all the bank statements, invoices, receipts, bills, and other financial documents that are relevant. These documents will act as the guiding force before implementing stringent monitoring policies.
2. Audits: No matter how much you train the offshore team, regular audits help in identifying discrepancies, errors, frauds, or any other financial risks. Audits are a regular process in an accounting firm and hence, does not require additional resource to conduct this for the offshore team. Regular audits ensure that the offshore team is in touch with the small CPA firm and that they are aligned on the expectations. Make sure to follow this method to reduce the risk of overlooking critical details that lead to major financial losses.
3. Real-time reporting: Right from the beginning of the partnership, make sure to establish a system of real-time reporting. There are several task management tools and software available that allow real-time collaboration. This way, the CPA firms can stay in touch with the offshore team despite the time difference and resolve queries without wasting much time. Real-time reporting also allows small CPA firms to address alarming concerns before situations go out of hand. This also helps the CPA firms to maintain the control they have over the tasks, without getting into the nitty gritty.
4. Compliance management: The accounting and tax regulations vary greatly from country to country. As a part of offshore monitoring, it is important to train the offshore team on the client’s compliance policies. This also includes tax codes, financial regulations, industry standards, and the right monitoring solutions, which can simplify the overall process. Don’t forget to let the team know of any regulatory or legal updates.
5. Training and resources: The success of an offshore partnership lies in the right training and guidance. The small CPA firms must train the offshore team as and when possible. Also, make sure to help the offshore team with the right resources that can assist them in using certain software or solving a certain problem. Making educational resources available for the offshore team can help them sail through issues when there is no one available at the firm’s end.
Achieving Transparency for Small CPA Firms: Final Words
Small CPA firms have to go the extra mile to achieve trust and comply with the regulatory standards and achieving transparency with the offshore partner is the first step towards it. Offshore monitoring lies at the core to ensure data security, aligned goals, and measured success. This is also key in helping businesses scale up. By embracing the right approach toward proper offshore monitoring, small CPA firms can attain the highest degree of financial transparency.
Have more questions about offshoring? Reach out to our team at connect@finsmartaccounting.com
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Also, read:
Tips for monitoring offshore accounting teams
Data security for small CPA practices
Accounting software integration while outsourcing
Risk management for accounting firms
Tax management in accounting firms
Director Growth Strategy & Alliance
Maanoj Shah is a finance and outsourcing expert with strong Business Strategy and Scaling-up experience. Over the last 20 years, he has incubated multiple businesses and helped build global enterprises in verticals as diversified as hospitality, technology, and healthcare.
