How to Get Started with Offshore Accounting: Hire Directly or Use a Partner Firm?

Hiring offshore accountants directly seems like a smart way to eliminate the middleman (partner firms) in outsourcing until you consider the accompanying administrative work, longer recruitment cycle, and the weak data security measures.

That’s not to discount the amount of success some finance and accounting firm owners have achieved using the direct offshore hiring model.

Ultimately, every firm owner must determine which model best suits their firm.

In this article, we look at the benefits and challenges of getting your offshore employees directly and using a partner firm to help you make the right decision.

Understanding Offshore Accounting Services

• Overview of Offshore Accounting

Offshore accounting is when a firm (accounting, bookkeeping, CPA, CFO, etc.) contracts an external firm in another country (usually with lower labor costs) to deliver specific client projects for them.

• Why Businesses are Moving Offshore in 2025

Accounting practices (like every other business) are moving offshore model to take advantage of specific advantages, including:

• Cost Efficiency: Offshoring saves firms the financial burden of paying the salaries and other overhead costs of in-house accountants.

 

• Access to Skilled Talent: Offshoring countries like India provide a diverse pool of accounting professionals who are highly skilled in accounting procedures and technology.

 

• Scalability and Flexibility: Offshoring allows accounting firms to find plug-and-play talent to handle a surge in workload.

The ease of hiring and firing in offshoring also saves firms the stress of worrying about what would happen when the relationship ends.

 

• Technological Advancements: The development of tech solutions to bridge the gap in time and distance, which has made remote work possible, has also enabled accounting firms in one country to use the services of professionals in other countries.

 

• 24/7 Operations: Accounting firms also offshore their services to take advantage of the time zone difference to deliver round-the-clock client services, which improves their project turnaround time.

 

• Focus on Core Business Activities: Using offshore accounting talent frees in-house resources, enabling firm owners to focus on the services that matter the most to them.

 

The Full Scope of Offshore Accounting: What Can Be Outsourced?

• Offshore Bookkeeping: the day-to-day recording and management of financial transactions.
• Accounts Payable/Receivable: processing invoices to ensure timely payments and managing collections for positive cash flow.
• Tax Planning and Preparation: tax filing and other related tasks that improve your client’s tax refund (while adhering to relevant laws).
• Managed Payroll: administration of employee compensation and tax withholding according to applicable payroll regulations.
• Virtual CFO: providing leadership in financial strategy, cash flow management, and risk control through forecasting, budgeting, and compliance.

Hiring Directly vs. Partnering with an Offshore Accounting Firm

What It Means to Hire Offshore Accountants Directly

The Process:

Employing an offshore accountant requires you to:

• Understand your needs and define your requirements

Be clear on why you need an offshore accountant and define the ideal person to fill the role. This usually includes their skill level, budget, and cultural alignment with your firm.

• Select Target Country

The primary goal of offshoring is cost reduction. That’s why choosing a country with low labor costs (like India) is a great decision.

With the country chosen, you’ll need to understand their employment and labor laws to engage the professional appropriately.

• Hire and Onboard

The traditional hiring process should include sourcing a candidate by sending out the job ad.

Screen the candidate’s background and interview for core competencies and cultural alignment with your system (team, process, and technology).

You may have to repeat this process to find a good fit. When you do, onboard them by training them to understand your processes and best practices.

• Set Up Data Security Infrastructure

This step ensures the security of the client information you share with the offshore employee. Be sure to provide secure software solutions with encryption technology, multi-factor authentication, etc.

• Ongoing Management

For performance review and effective collaboration, you can assign one of your staff as a contact person for the offshore employee or use a project management software that lets you track their performance the same way you do for every other employee in your firm.

 

Pros:

• Direct offshoring gives you greater control over your offshore team’s processes and timelines.
• The absence of company structure makes this model more flexible, but what you gain in flexibility, you may lose in reliability.

 

Cons:

• Requires more time, money, and effort in recruitment.
• You’re solely responsible for navigating local labor laws, which will be stressful.
• Requires you to build a secure remote work system for professionals.

 

Cost Breakdown:

The rough estimate for hiring an accounting professional from India directly is:

• Salary: $10,000-$25,000.
• Recruitment (job ad, background checks): $600-$2,300 (postings, background checks).
• Technology: $900-$3,500 (software, cybersecurity, hardware).
• Training: $700-$2,500 (onboarding, ongoing training).
• Total: ($12,200-$33,300).

How Partnering with an Offshore Accounting Firm Works

Using a partner firm transfers all the work of pre-vetting your offshore employees (for skills, experience, and cultural fit), negotiating their payment package, and handling compliance-related matters to the offshoring company.

All you need to do is pay the subscription fee. The offshoring firm takes care of everything else.

Here’s what the process looks like:

• Needs Assessment

Apart from helping you understand the accounting service to outsource, and being clear about your outsourcing needs, it’s easier to identify a suitable partner firm (and offshore employee) when you see them.

For example, if you need more control over your offshore employee, a partner firm that uses the embedded offshoring model will serve you better.

It allows you to assign tasks, track performance, and receive their performance like your in-house team.

• Create Service Agreement and Onboarding

This is where you define the scope of service, the price and payment structure, and outline every other information needed to guide the offshoring relationship.

Once the agreement is accepted by both parties, onboarding the firm (or a dedicated professional) should follow. This allows you to integrate your systems with your partner firm for real-time collaboration.

If you’re using the embedded model, all you do here is train the professional assigned to you on your standard operating procedures.

• Task Execution and Communication

Assign projects and tasks to your offshoring team members and review reports when due. Creating a regular check-in will ensure effective communication and timely service delivery.

With the embedded offshoring, you will be able to track your offshoring team members’ tasks in your project management software.

Benefits

• Cost Savings: Offshoring to countries like India costs around $20 per hour and $2,600 per month compared with $30 per hour and $4,600 per month in the U.S.

Most offshoring companies take care of the background recruitment work and provide a subscription-based model that allows you to pay for the services you need.

• Expertise: The large pool of accounting professionals (chartered accountants knowledgeable about the latest financial reporting standards) in offshoring companies makes it easy to find the right expertise to take on your firm’s workload.

Offshoring companies also train their staff in advanced accounting software, enabling them to deliver accurate work quickly.

• Compliance: The average offshore employee has years of experience working for different businesses in your client’s industry. This exposure makes them grounded in the relevant financial reporting requirements.

Risks Mitigated by Outsourcing Firms

• Data Security and Confidentiality: Getting accounting work done in an offshore system involves the cross-border exchange of confidential information and all the data security risks you can imagine.

Reputable offshoring firms use confidentiality and diverse cybersecurity measures (such as NDAs, encryption technology, managed switches, multi-factor authentication, and security certifications (SOC 2, ISO, GDPR, etc.) to protect you and your client’s data.

• Compliance and Regulatory Risks

With direct offshoring, you will have to ensure your offshore team member understands relevant regulatory requirements like the SOX Act.

Using an offshoring firm saves you the stress of training the professionals assigned to you, as the firm already trains its staff on existing and emerging financial reporting and data privacy legislation.

Key Factors to Consider Before Choosing an Approach

• Budget and Cost-Effectiveness

Direct Hiring

Direct hiring costs between 12,000 and 25,000 a year per employee. That excludes the cost of hiring, training, and setting them up with relevant tech tools, which could increase costs by up to 50%.

 

Offshoring Firm

Using Finsmart Accounting as an example, it’ll cost you between $32,000 and $36,000 a year for a dedicated accounting professional (depending on the service you’re outsourcing).

This may include subscription costs, so you wouldn’t have to pay an additional fee for tech.

You can find them with just a Google search, so you don’t have to post job ads or incur any other recruitment expenses.

• Time Investment and Scalability

Direct Hiring

It takes around 2-6 weeks for hiring and another 1-2 months for onboarding and integration efforts.

Scaling this model will require you to continually recruit more professionals, which means extra time and financial investment.

Offshoring Firm

It takes 1-2 weeks for hiring and onboarding because this model requires a shorter recruitment cycle and minimal efforts to integrate the firm.

If you’re using the embedded model, you only need to train the dedicated resource on your SOPs and best practices.

Scaling only requires you to request additional professionals, and the partner firm will assign more to you.

“When we’ve had to bring on additional projects, Finsmart assigned additional staff to help us during that process.”

Elizabeth Bergen, Owner of Foray Business Group

• Risk and Compliance Concerns

Direct Hiring

With direct hiring, you take more responsibility for your offshore employees’ security and data handling protocols.

You’re also responsible for compliance with the accountant’s local employment laws. In many cases, you will need to hire a legal consultant with expertise in local legislation to help you navigate the process.

Outsourcing Firm

Reputable offshoring firms have specialized data centers and operational procedures built to comply with global data privacy frameworks (NDAs, SOC 2, GDPR, ISO, etc.).

Once you confirm their compliance with these standards, you should be sure of the security standards of your client’s data.

Plus, offshoring firms take the burden of navigating local labor laws off you.

• Quality Control and Training

Direct Hiring

You have more control over the professional’s work quality, like every other team member, since they’ll most likely be working in your project management system.

They’ll need regular training to get work done and process client information to your standards.

Outsourcing Firm

Offshoring firms have an effective internal system of quality control where a manager reviews an assignee’s work before it is delivered.

With the embedded offshoring model, you’ll have your dedicated professional working directly in your project management system, allowing you to control the quality of their work much the same way you do with your full-time team.

Offshoring firms provide accountants who have been trained in all technical and analytical accounting procedures. Only training on your firm’s unique workflow is needed.

Industry Trends & Best Practices in Offshore Accounting (2025)

• Data Security Considerations

Security standards like ISO 27001 and SOC 2 (Type II) are currently part of standard efforts to ensure the security of your client information.

International security frameworks (like GDPR) also help offshoring firms to comply with cross-border data sharing

 

Best Practice

Use software providers with these security certifications and train your staff to abide by NDAs and stay updated on emerging cybersecurity threats.

• Cloud-based Accounting Solutions

There are numerous cloud-based accounting solutions available to accounting firms today, and each tool seeks to streamline your financial reporting and improve project accuracy.

When used separately, these tools can get overwhelming, which can threaten your team’s productivity.

Best Practice

Use programs that integrate with other project-critical applications to cut costs, save time, and make your team more productive by working from one central platform.

• The Rise of AI in Offshore Accounting

It feels like there’s an AI tool for every accounting process these days.

From invoice processing to bookkeeping reconciliation to fraud detection and predictive analysis, accounting firms must look for ways to make AI do the heavy lifting while they focus on quality control and strategic work.

Best Practice

Train your team to be proficient in emerging AI tools to reduce your operating costs and improve client service.

 

Is Offshore Accounting Right for Your Firm?

The question is not whether you need offshoring, it is whether you can build an offshoring strategy that truly saves you cost, lightens the workload for your in-house team, and improves client service.

That’s why we recommend an offshoring readiness checklist. It helps you to:

• Understand where exactly you need offshore talent.
• Prepare your firm for offshoring success, like documenting your processes to make onboarding smoother and more efficient.
• Create clear KPIs to measure the effectiveness of your offshore team.

Get Expert Offshore Accounting Services with Finsmart

Every accounting firm owner wants work-life balance, but there’s hardly enough time to meet client demands, much less leisure.

 

Finsmart Accounting provides accounting professionals to augment your internal capacity and reduce operational costs, freeing you up to work on strategic tasks and make time for important activities outside of work.

 

Our Accounting Seat model allows you to embed our offshoring resources (accounting professionals) into your firm. They’ll report to you like every other staff member in your firm.

 

We’d love to discuss your offshoring needs (and strategy) to see if direct offshoring or a partner firm will suit your firm better. Click here to Book a Free Consultation.