How Outsourcing Eliminates Key Problems Accounting Firms Face Today
Running a CPA firm is always challenging. Unless there's an expansion strategy in place, it is easy for the practice to run into muddy waters. Fortunately, outsourcing has taken the world by storm, and the accounting industry is no exception.
CPA firms everywhere are seizing the opportunity to access a large talent pool and recruit the best accountants to work with them.
Outsourcing has enabled them to make time to carry out high-margin jobs such as forecasting and budgeting, while the outsourced accountants drive low-margin bookkeeping and payroll functions for the practice.
Outsourcing also helps CPA firms eliminate four key challenges they face today. Let us have a look:
Problem #1: To scale a business and drive revenues
The whole point of running a business is to make profits and enable its growth. However, it’s not as easy as it seems. The fourth annual survey by Wolters Kluwer reveals that 62% of accounting firms struggle to drive revenues and business growth.
Outsourced accounting solution: Frees up staff to focus on value add-ons like client servicing.
As mentioned before, outsourced accounting solutions take up low-value tasks such as bookkeeping. That frees up the practice staff and enables them to focus on more productive and value-added tasks.
Outsourcing invariably boosts the productivity levels of the staff who then drive more functions; thus enabling the CPA firm to drive more revenues.
To build a competitive and profitable business, CPA firms must expand their services efficiently. Outsourcing helps them to do that.
Problem #2: To adopt cloud accounting systems
It's no secret that taxation has gone digital. However, in a recent survey, 69% of small business owners reported that they are not very knowledgeable about the cloud.
Therefore, CPA firms that don't adopt cloud accounting systems often get left behind, and that's detrimental to the practice growth.
Outsourced accounting solution: Gives access to cloud expertise.
Adopting the latest technologies can give CPA firms a competitive edge. Experienced outsourced accountants can help the in-house practice staff get trained in cloud technologies and make them ready for future projects.
Problem #3: To recruit and retain staff effectively.
Staff recruitment and retention are one of the biggest challenges for a CPA firm. According to Statista, 1.4 million accountants are expected to join the industry by 2022. However, there’s still a shortage of talent in the accounting world.
Did you know 65% of leading CPA firms say it's quite challenging for them to find qualified candidates? The survey also reported that they even lose key team members during the crucial time of the year, such as the tax season.
Outsourced accounting solution: Helps build an offshore team, that's available throughout the year.
For CPA firms that want to scale fast and keep offering their services without any interruption, outsourcing is an ideal option. There are many accounting outsourcing companies in India that can help CPA firms set up a team of qualified, experienced accountants.
The good thing about outsourced accountants is that the CPA firm doesn't need to worry about them leaving during busy periods of the year.
Problem #4: To deal with cash flow problems.
Accounting firms always say managing employee expenses is one of the vital challenges in accounting. According to PayScale, the annual salary of an accountant in the USA is around $38.8T-70.6k. The senior accountants take even more.
Besides, the accounting firms have to bear other employee expenses such as training, office space, extra funds. That, sometimes, can take a toll on small CPA firms that could have a cash flow problem.
Outsourced accounting solution: Cuts down the employee cost by up to 50%.
When a CPA firm hires an outsourcing team to do the job, they don't have to worry about overhead expenses. They save money on office space, furniture, extra funds, and more.
Along with that, the cost of outsourcing work is 25% lower than what the CPA firms pay. Apart from that, there are many accounting outsourcing companies in India and the Philippines, where the wages are a bit low. That allows the CPA firms to increase the production capacity by almost 200%.
Accounting is one of the most dynamic industries in the world. Therefore, with the right support system, CPA firms can function more smoothly and efficiently. Looking to work with an experienced outsourced accounting solutions provider? Write to us at firstname.lastname@example.org or call us at +1 800 310 9312.