How to Hire Offshore Bookkeepers for Your Accounting Firm

“My internal staff enjoys working with Finsmart Accounting because of their efficiency and productivity. My communication with the Finsmart team has been tremendous. It feels like there is no time zone difference between us. I do not feel that there is a delay in transferring information.”

 Elizabeth Bergen, Owner of Foray Business

Offshoring, as beneficial as it is, can leave a bitter aftertaste when your bookkeeping partner lacks the expertise, commitment, and cultural alignment with your firm.

Hiring the wrong offshore bookkeeping provider has disrupted growth plans and cost other firm owners the opportunity to hire the right bookkeepers.

In this article, we’ll show you how to get offshore bookkeeping talent that’ll complement your in-house resources and take your firm to the next level.

Why More Accounting Firms Are Hiring Offshore Bookkeepers

• Talent Shortages: accounting talents in the U.S. and other Western markets are shrinking, with accounting degree completions in the United States falling by 17% in the 2021–2022 academic year.

 

This is causing more firms to look abroad for qualified talent to meet their evolving needs.

 

• Technological Advancements: Cloud-based accounting software has made it easy for accounting teams to get work done and collaborate from different locations.

 

This has also enabled firms to hire bookkeepers from other countries.

 

• The Growth of the BPO Industry: The rise of finance and accounting outsourcing companies (like Finsmart Accounting) has made hiring overseas bookkeeping professionals easier, safer, and more compliant.

 

These companies source, vet, train, and make bookkeeping talent available to bookkeeping firms at a subscription fee, saving you the stress of sourcing and training bookkeeping talent by yourself.

 

• Time Zone Advantages: Working with bookkeeping professionals in places like India and the Philippines enables bookkeeping firms in Europe and North America to deliver client work overnight, making offshoring more appealing.

 

• Adoption by Industry Leaders: Larger accounting firms (like the Big Four) are increasing their investment in the offshore model for cost and other considerations.

This has contributed to an upward trend in offshore bookkeeping.

Benefits of Offshore Bookkeeping Services

• Cost savings and affordability

Available at $2,600 a month, offshore bookkeeping costs a fraction of the average bookkeeper’s salary in the United States.

Moreover, offshoring means you wouldn’t need to cover employee benefits. Its subscription model allows you to pay for only the services you need.

• Access to skilled professionals

Offshoring countries like India and the Philippines have diverse pool of bookkeeping workforces rigorously trained in global accounting standards.

 

You wouldn’t need to train them on financial reporting like you would an in-house hire. All you’ll need to do is show them your best practices and your operating procedures to make their work aligned with your firm’s standards.

 

“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

• Flexibility and scalability

Offshore bookkeeping teams are adaptable. They can operate as a standalone team or can be embedded into your firm like your regular staff. This gives you the flexibility around the way you engage your offshore team.

similarly, you can easily hire and fire offshore talents as your needs change. Offshoring companies do not require long-term commitment. This enables you to scale up during seasonal surge in workload without breaking a sweat.

• Improved efficiency with cloud technology

The average offshore bookkeeper is proficient in accounting technology.

They can work comfortably with the tools you already use and can provide access to new ones, helping you to get work done in the most efficient way possible.

Understanding Bookkeeping Pricing: How Much Do Offshore Bookkeepers Charge?

• Hourly Pricing

Offshore bookkeepers charge around $20 an hour to update the book of accounts, perform bank and credit card reconciliation, month-end closely, etc.

• Fixed Pricing

Fixed monthly pricing costs around $2,600 for a dedicated bookkeeper who will work 160 hours per month. Tasks include updating the book of accounts, performing bank and credit card reconciliation, and month-end close, among others.

In-house bookkeeping costs an average of $3,310 (with the possibility of going as high as $4,600 a month).

Factors that affect costs

• Location: labor costs in regions with a lower cost of living are significantly lower than in regions with a higher cost of living.

For example, the Minimum wage in India is $2.13 compared with $16.50 in New York.

That is why it is more cost-effective for a firm in New York to offshore its services to New Delhi, instead of the other way around.

• Experience and Qualifications: The services of an experienced, specialized bookkeeper will cost more than an entry-level bookkeeper. They are more likely to spot errors and prevent your client from violating financial reporting regulations.

 

• Task Complexity: Complex tasks require more resources so they command higher prices. Simpler tasks are easier, quicker, and less mentally demanding, so they are priced lower.

 

• Hiring Model: If you’re hiring a freelance bookkeeper directly, you may be able to shave off a few more dollars from your offshoring costs compared with using an outsourcing firm.

However, it requires upfront investment in recruitment and technology (to ensure seamless collaboration and data security).

• Volume and Commitment: The higher the volume of your client’s bookkeeping needs, the higher the fee you’ll charge the client and the higher the fee you’ll pay for offshoring it.

Where to Find the Best Offshore Bookkeepers?

India

India has a massive pool of chartered accountants with strong technical expertise. Its bookkeeping professionals are trained in rigorous financial reporting techniques, which makes them proficient in internal reporting and accounting technology.

Its low cost of living and competitive workforce make it arguably the most affordable offshoring destination in the world.

Although its business hours do not overlap with those in Western markets, offshoring to India enables bookkeeping firms in the U.S., UK, and EU to provide 24-hour service to their clients.

The Philippines

The Philippines is another country with a large pool of English-speaking bookkeeping talent. Filipino culture is strongly aligned with that of the U.S., which is why they are highly suited for client-facing offshore roles.

Offshoring to the Philippines is also cost-effective (although not as much as in India).

Its time zone is about 12 hours ahead of the United States, allowing overnight work and faster project turnaround.

Eastern Europe

Eastern European countries like Ukraine and Poland also offer a decent offshoring population. Their bookkeepers are proficient in global accounting standards (GAAP and IFRS).

While their workforce also offers a cheaper alternative to local bookkeeping professionals in the U.S., it is significantly more expensive than that of India and the Philippines. Their time zone overlaps with business hours in Western markets.

• Criteria for choosing an offshore bookkeeping provider

• Expertise and Qualifications: Affordability won’t matter much if your offshoring provider doesn’t have the technical skills to deliver accurate client projects.

Any offshore bookkeeper who is worth their weight in gold must understand the intricacies of financial reporting, be comfortable working in accounting software (QuickBooks, Xero, etc.), and be up-to-date with financial reporting standards (GAAP, IFRS, etc.).

• English Proficiency and Communication: Clear communication is important for team and client collaboration. It doesn’t just keep your team on the same page, which is crucial for timely and quality client work; it also gives your clients the right impression about your firm.
• Data Security and Compliance: Prioritize offshore bookkeeping providers with the right security measures and certifications to ensure the safety of client information. This typically means data encryption technology, confidentiality agreements, and security compliance (like ISO, SOC, GDPR, SOX, Etc.).

Support and Infrastructure: Reputable offshoring companies provide an enabling environment, tools, and structure that save you the administrative burden of managing your offshore bookkeepers. This enables them to focus on completing your projects.

• Time Zone Compatibility: If the offshore bookkeepers’ time zone overlaps with yours, it enhances real-time collaboration and meetings.

Time Zone Compatibility: If the offshore bookkeepers’ time zone overlaps with yours, it enhances real-time collaboration and meetings.

But if it’s 9-12 hours ahead (like it is in India and the Philippines), your offshore bookkeeping team will be working while you sleep, which improves your turnaround time. You have to choose your provider according to the method that works best for your firm.

Elizabeth Bergen, a US-based accounting firm owner, meets with her Indian offshore staff in the early hours of her mornings. This enables her to clarify assigned tasks and expectations and keep results consistent.

Steps to Successfully Hire Offshore Bookkeepers

Success in offshore bookkeeping depends on your ability to:

Step 1: Define Your Needs

You wouldn’t know what you need to outsource until you outline all the bookkeeping tasks and projects that can benefit from offshoring, such as data entry, bank reconciliation, and financial reporting.

Once you identify the tasks, determine the skills, expertise, and technology required to complete them.

With the bookkeeping tasks and your potential partner’s skills identified, determine how much work is involved on a weekly and monthly basis, and decide your budget for it.

Step 2: Evaluate potential offshore providers

In this step, you’re assessing potential offshore bookkeeping partners based on the following factors.

• Skills: whether they have the necessary certifications and experience serving your niche.

 

• Cost: offshoring is generally affordable, but some firms include hidden fees that inflate the final costs. Ask about possible hidden costs to understand if you can afford them for the long haul. You’d want to ensure there are no hidden fees in the contracts that will inflate the costs down the road.

 

• Location: This is important for cost, communication, and collaboration. Some countries will be more affordable, better at communication, and culturally aligned with your firm than others.

 

• Time Zone: While time zone differences may prevent real-time collaboration as you know it, your offshore bookkeeping team should be available for regular meetings to align your processes and expectations.

Step 3: Conduct Interviews and Assess Expertise

This is where you gauge the skill and cultural fit of the candidates you shortlisted.

Find out about their experience with your type of clients, financial reporting standards, and accounting technology.

To ensure the security of your client’s data, ask about their confidentiality and data handling protocols. How do they store and retrieve data? What secure communication and collaboration channels do they use?

Top offshoring firms abide by non-disclosure agreements (NDAs) and use secure software programs with ISO 27001 and SOC 2 certification.

Step 4: Onboarding and Training Best Practices

The onboarding phase enables you to set your offshore bookkeeping team up for success. You should:

•  Make someone responsible for the onboarding process. This person becomes your primary point of contact with the bookkeeping partner during onboarding.
• Provide clear workflow templates that standardize their work quality.
• Set them up in your tech stack. The average offshore bookkeeper is fluent in relevant bookkeeping software, so you may only need to grant them access.
• Design team-building exercises to help the bookkeepers integrate well into your team.
• Set up communication and collaboration systems. This allows you to define the frequency and channels of communication that make sense for your workflows and project timeline.

Step 5: Managing offshore bookkeepers effectively

Managing offshore bookkeepers is most effective when you use the embedded model. This allows your offshore bookkeepers to work inside your workflow systems like your full-time team, enabling you to track their work and review their performance in real time.

To ensure seamless communication with your offshore team, set them up with tools that integrate well with your other mission-critical tools. This would save your team the need to log into multiple software programs to find relevant information.

Regular review meetings will also help you and your offshore team to stay on the same page. Find a good time to meet with your offshore team at least once weekly.

“The team that Finsmart provided us has always been a part of our team. We have regular meetings with them, and my internal staff really enjoys working with them.”

Elizabeth Bergen, Owner of Foray Business

Challenges in Offshore Bookkeeping & How to Overcome Them

• Communication Barriers

Misunderstandings and gaps in communication arise due to differences in language, accents, and other cultural differences in the countries involved.

To prevent this, assess your potential partner’s English proficiency during the interview. Give special attention to their ability to communicate clearly and understand you.

You can also give them a trial project and assess how well the communication and collaboration went.

• Data Security Concerns

Exchanging sensitive financial data across borders carries a high risk of data leaks, which can harm your client’s trust, impact your firm’s reputation, and attract regulatory sanctions.

To prevent this, partner with offshoring companies that take certifications and security compliance seriously. Certifications like GDPR, ISO 27001, and SOC 2 indicate that an offshoring firm complies with global data security standards.

Secondly, prioritize software solutions with security features like data encryption, access control, and multi-factor authentication.

Firm owners like you also include non-disclosure agreements (NDAs) in their offshore contracts to protect your information from unauthorized access.

• Compliance and Regulatory Issues

Regulatory compliance is another major concern. Your offshore bookkeepers must comply with local labor laws and execute their projects in line with global accounting regulations like GAAP (for U.S. clients and IFRS (for other countries).

To address this challenge, use reputable offshoring firms. They will navigate the applicable local laws on your behalf and they select bookkeeping talents that are knowledgeable in global accounting standards. They also ensure their continued education in evolving financial regulations.

Ready to Hire Offshore Bookkeepers? Get Started with Finsmart Accounting

Offshore bookkeeping is only as effective as the provider you’re doing it with.

The first time Elizabeth Bergen used an offshore accounting firm, the experience was below her expectations. Thankfully, she met Finsmart Accounting, and her offshoring goals began to come to life.

“We used an offshore bookkeeping provider in the past. They had massive turnovers on a regular basis. I was having to explain my SOPs on a regular basis. It hasn’t been the same experience with Finsmart.”

Elizabeth Bergen, Owner of Foray Business

At Finsmart Accounting, we strive to be your trusted fin-ops partner, providing prequalified bookkeeping professionals certified in international reporting standards (GAAP, IFRS, etc.).

With our proprietary Accounting Seat model, we provide dedicated bookkeeping professionals who work in your firm’s tech stack like every other team member (but at a fraction of the cost of other team members.

This approach has enabled us to serve over 300 firms in North America and Europe with an average client retention of nine (9) years.

If you’re ready to improve your workforce with offshore bookkeepers, book a free consultation with our offshoring expert today.

Click here to book your Free Consultation.