Businesses are increasingly using offshore accounting to obtain talented individuals and reduce costs. According to a research, over 40% of US businesses outsource some of their accounting work to foreign nations.

What is Offshore Accounting?

An accounting firm outside a client’s home country manages and maintains financial records and statements as part of the professional service known as offshore accounting. Bookkeeping, tax preparation, financial statement preparation, budgeting, and other financial management services are among some of the services offered.

While the majority of organizations handle these tasks internally, others would rather work with an offshore crew from nations like the Philippines and India.

Some reports claim that small and medium-sized businesses (SMEs) outsource accounting tasks more than any other function.

The following complex and non-core tasks can be effectively delegated with the help of offshore accounting services:

• Compliance with taxes
• Payable and receivable accounts
• Accounting
• Management of payroll
• Management of inventories

Why Businesses Use Offshore Accounting

Although hiring accounting services in-house is an option for businesses, it is sometimes too costly and requires too much management monitoring.

Offshore accounting offers high-quality services at a fraction of the cost of hiring internal staff. The experienced outsourced team can provide expertise comparable to that of an in-house accounting department.

Because of the benefits that offshore bookkeeping services provide, businesses frequently go for offshore accounting.

Everything from basic bookkeeping and management accounts to tax accounting, and even CFO advisory can all be done effectively from overseas.

Outsourcing their accounting needs offshore can be a game-changer for businesses looking to streamline operations, cut costs, and gain access to top-tier talent. Here is how it benefits the businesses:

1. Cost Savings

One of the best reasons for businesses to think about outsourcing is cost reduction. Hiring workers from low-cost nations usually results in pay that is significantly lower than hiring domestically. Additionally, because of the larger economies of scale, fewer workers are required to complete the same task. Spending less on software and hardware is another option.

2. Communication

Offshore accounting can offer significant tax advantages to businesses operating globally. By strategically locating certain operations or assets in countries with favorable tax regimes, companies can reduce their overall tax burden.

3. High Quality Talent

When you opt for resources at offshore locations, you are most likely to find highly educated human resources who are also open to doing tasks such as data entry that may be out of your employees’ reach. It’s easier to get these tasks done when you have employees who are happy to execute them.

4. Operational Excellence

Some parts of the world have a long history of operational excellence because global multinational companies have been taking advantage of these locations as centralized offshore centers for decades. Some of the notable locations include China, Malaysia, India, and the Philippines.

While the technical compliance support remains onshore, the majority of these centers handle transactional processing. Consequently, these sites prioritize and adopt a culture of continual development and operational excellence.

5. Scalability

Lastly, offshore accounting services give you the liberty of scaling up or down as per your project’s needs. But how is this beneficial for businesses? The answer is that with offshore outsourcing of accounting services, the businesses need not invest their time and money in shortlisting and hiring new resources or even lay off the existing (mostly trained) employees.

Let’s Cut to the Chase

Find the best local talent, pay them great salaries, hire onshore teams that are bought into the concept (clean slate!), and allocate the tasks effectively.

If you think offshoring works best for your business, feel free to contact us here so we can share how you can make it a reality.