Tax regulations are complex and that is why firms need to evaluate their offshoring strategies. Modern operational processes, the firm’s ability to scale, the number of clients, and the geographical differences are among the top factors to consider. Tax is a critical scenario and in today’s ever-changing accounting and tax setup, CPAs are under tremendous pressure to deliver efficient, cost-effective, accurate, and completely compliant services. These challenges aren’t always as straightforward as they might appear. And that is why, many firms turn to offshore solutions to address the challenges and maintain the highest degree of compliance.
Tax preparation, through offshoring, is a strategic preference in modern times to counter taxation challenges. And CPA firms use it to optimize their tax-related processes. Most offshore partners provide a low-cost alternative that allows timely delivery to clients without having to worry about the sudden splurge in the requirements. Offshore teams have seasoned tax professionals, who are well aware of the complicated tax regulations and ensure accurate and timely tax preparation.
In this blog, Finsmart Accounting – trusted globally for accounts outsourcing services – will share major challenges in taxation and also list out how to manage the tax work overflow with offshore solutions.
But before we delve deeper into how offshoring can help small firms with tax management, let us understand the challenges that they face. If you are yet to pick an offshore partner, this section will provide you with a much-needed reality check.
The Challenges in Taxation
Small tax firms have limited resources and expertise. Those with the expertise end up working for multiple resources, which ultimately causes burnout. Keeping track of the ever-changing laws and regulations can be extremely challenging. This needs the team to be constantly educated and trained. Small firms often lack the resources and bandwidth to conduct such informative sessions.
Most clients expect personalized services and quick responses, which can be a daunting task for a small team with a heavy workload and existing taxation challenges. Another major challenge that tax firms face is that of resources. Tax is a seasonal task and firms struggle to keep the resources when there is no workload. They also have to deal with the challenge of hiring new resources during peak season.
Now that you have some idea of taxation challenges faced by small tax firms, let’s learn why optimize your firm’s efficiency with offshoring.
Why optimize tax efficiency with offshoring?
Access to a wealth of expertise
A reputed offshoring firm like Finsmart Accounting has been around for years. When small tax firms outsource their accounting and taxation tasks, they get access to a highly-skilled workforce, who are equipped to understand and work according to international standards. They have evolved, and have access to and understand advanced technology while providing cost-effective solutions. A large English-speaking population in countries like India and the Philippines makes them a favorable location for offshoring your tax practice.
Precision and cost-efficiency
The countries that provide offshoring solutions often provide precise and cost-effective tax preparation services. There are dedicated resources in the offshore teams who efficiently manage tax compliance. Small tax firms in the US should leverage their expertise in tax regulations, and ensure precision and punctuality. It allows the firms to focus on tasks that are top-tier and need their attention in the large picture.
Opportunity to scale without overhead
Although offshoring as a solution has been around for decades, modern-day offshoring has brought about a transformation that allows small CPA firms to expand their teams without increasing infrastructure, hiring, or any other overhead cost. Through offshoring, tax firms get access to a talented workforce, without bearing the costs associated with local hiring. They have a dedicated team of professionals in the field they desire, like tax. This enables firms to continue taking clients in a profitable circumstance.
Adherence to the regulations
When it comes to performing taxes, maintaining compliance with regulatory standards is a key concern for tax firms. Offshore firms bring comprehensive support including audits, identifying areas of improvement, and helping the firms make sure that they do not get into legal pitfalls. For small firms, it is relatively difficult to keep track of the changing regulations and it is not until the ultimate moment they find themselves in a fix. An offshore team helps the firm navigate through these complexities easily.
Managing tax work overflow and challenges with offshore solutions
Below are some tips and ideas to manage the tax work overflow and challenges with offshore solutions:
Boost profit with a low-cost accounting firm
Tax firms, due to increasing competition and changing landscape, are under severe pressure. By offshoring your tax practice, you can hire a team that can perform excellent quality work at a lesser cost without the leaders having to do it themselves. This helps the team save time and money. The bulky work gets done and you get time to focus on more critical jobs.
Expand business that doesn’t cost a fortune
Business scaling is known to cost a fortune. There are investment expenditures that need to be covered and overhead costs to be met. But that is not the case when you are offshoring. You get to start making more money than before, your current practice isn’t hampered and you can add more offerings, like bookkeeping, consulting, etc, to your profile. This is a method of choice for the firm owners as they no longer spend on hiring new employees or on training and re-hiring, infrastructure, or personnel-related. Although they do employ an efficient team who handle everything.
Focus on core jobs
As a leader and business owner, you do not want to spend your time on things that can be easily done by other professionals. As you expand your business, you would want to concentrate on strategic tasks, tasks that require knowledge transfer and are profitable. Many clients require more time from the service providers. After outsourcing tax preparation tasks, your clients get a dedicated team of professionals for the services they require. The clients are happy and the firm continues to remain productive.
Get rid of the peak season stress
Most often, it is the holiday season that is also the peak tax season. It puts the entire in-house team and the leaders under tremendous pressure. By outsourcing your taxes, you do not end up dealing with the dissatisfaction of your staff due to a hefty workload in the peak season. It also relieves you of the burden of covering the salary of the contractual staff and the following cash flow issues. Offshoring also makes room for additional work during high demand.
Offshoring Tax Preparation: Endnote
Strategic offshoring has become an integral business solution for small tax firms. Overcoming accounting and tax challenges related to limited resources and expertise are some advantages that these firms reap. Offshore firms like Finsmart Accounting not only specialize in offering comprehensive tax benefits to clients but also help save costs and achieve efficiency.
To ensure maximum benefits, small tax firms must assess the needs of their clients, choose the right partner, set clear expectations, and ensure that the offshore team is adequately trained. Make sure to acquaint them with data security strategies and regularly monitor and evaluate their performances. With the right strategy, small tax firms can achieve maximum growth and success through offshoring.
Want to offshore accounting and taxation? Email us your goals at connect@finsmartaccounting.com
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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.
