Outsourcing Beyond Tax Returns
The evolution of tax outsourcing from a prediction to a reality is evident today. Outsourcing has become commonplace in many firms around the country and is projected to increase substantially year over year. Client resistance, mainly attributed to security concerns, has been overcome through education about the process of outsourcing. The security measures implemented by the outsourcing industry typically mitigate security risk rather than increase it. Outsourcing results in quicker turnaround times and improved customer service, making it more palatable to clients. Clients continue to focus primarily on their local relationships and timely service rather than the processes that occur behind the scenes.
As the BPO industry overcomes technological and communication challenges, outsourcing continues to evolve and is beginning to permeate other areas of financial services beyond tax preparation. What is the next frontier for outsourcing? Is it applicable to bookkeeping and accounting? Can bank reconciliations, trial balance work, depreciation calculations, invoice inputs, and report generation be outsourced? The answer is a resounding yes.
For the past several years, outsourcing tax firms have been taking on more of the daily routine tasks in accounting offices across the U.S. A dedicated overseas staffer that knows accounting procedures and style can easily assume incremental workload during peak periods or even daily using the web interfaces that allow for data sharing, storage, and communication. Web-based accounting software, as well as traditional accounting products are easily understood and readily embraced by qualified trained overseas accountants.
The virtual office is here and the virtual worker is anywhere and everywhere. Often the training time for outsourced employees is less than that of typical in-house employees and the personnel issues are fewer. As a result, the home office’s internal personnel is able to devote more time and energy to providing superior customer service. The focus of the client relationship manager shifts from managing production to identifying additional services that can add value to the firm-client relationship.
The addition of outsourced bookkeeping and accounting services is a win-win for the outsourcing industry and its clients. U.S. firms continue to struggle with the recruiting and retention of talent in the areas of tax, audit, bookkeeping and consulting. With outsourcing, firms are able to adjust their internal policies and develop higher-performing staff by limiting the mundane and repetitive tasks they perform. Firms can focus instead on exposing employees to more complicated tasks historically reserved for those with greater experience. This ultimately results in smarter, more empowered accountants and stronger firms.
Outsourcing bookkeeping and accounting functions creates a steady stream of work for overseas employees and enables outsourcers to constantly challenge its offshore employees. This provides continuity of service and reduces the likelihood of churn. The firms are better positioned to attract and retain qualified personnel by offering less repetitive work and accelerated career growth. The shift of routine accounting tasks overseas allows U.S. office personnel to focus more exclusively on identifying and addressing client needs. Progressive firms should be able to add value to their client relationships, both internally and externally.
At Xpitax, we see significant variations in the implementation of outsourcing solutions. Many firms view outsourcing as strictly tactical, allowing them to manage the incremental workload during the busiest time of year—an insurance policy of sorts. Other firms view outsourcing as a strategic imperative, allowing them to expand their services beyond tax preparation to bookkeeping and other special projects within their office. The reality is that outsourcing can be whatever a firm needs it to be—ultimately, a powerful tool in the quest for competitive advantage.
Add comment February 4th, 2007
