Accounting can get really hectic at the best of times, but in the really busy season, say the tax season, CPAs are left scrambling to get the job done. That they get it done is not up for debate, but along the way they suffer from stress and anxiety issues. Working longer hours and mounting pressure to do as much work in as little time as possible is like a Molotov cocktail for stress.
But let’s keep the stress factor aside for a moment.
There are plenty of other challenges faced by CPAs, EAs and accounting firms. Take for instance COVID-19 and the economic challenges that it has brought to the table. By August end (2020), more than 1,60000 businesses had shut down as direct result of the pandemic’s economic toll. There is a very good chance, that quite a few businesses offering professional services such as accounting and tax preparation shut down during this time. If not closed, there is no doubt that they suffered the consequence of this pandemic in some way or form.
Let’s drill down a bit and look through CPA firm tinted glasses. These firms are staring at a New Normal where inefficiencies are rife, productivity issues abound and they need to start exploring new growth avenues, but are scared do so, because this entails adding to their overheads.
So, is there an answer to their problems. Yes, there is. The answer is outsourcing their accounting work or hiring remote workers. E.g. tax preparation outsourcing for accounting firms and hiring remote workers.
Quite a number of CPAs, EAs and accounting firms believe, this is an impractical solution because accounting requires focused expertise and knowledge of US tax and associated legislation. They ask themselves, “how can we be sure that the job will be done, and not just done, but done as per our specifications; does the outsourcing firm have the necessary expertise in Form 1040, 1120 and more from the tax preparation outsourcing purview; do the remote workers have enough expertise to accurately handle all manner of accounting work?”
These are fair questions. Here are a few reasons why it makes an infinite amount of sense to choose remote accounting, wherein accounting experts sitting out of different geographies are doing accounting work for your firm.
Before we begin – outsourcing is essentially work that is handled by remote workers sitting out of an offshore/onshore office space, but remote work does not only mean outsourcing. Your firm/organization can hire staff that does not sit out of your office, but operates out of their homes (ergo – remote work).
Explore New Growth Avenues
According to a Iovautus survey, 53% of polled firms said they expected to do less business because of COVID-19; their growth projections are lower compared to pre-COVID days. Now the easiest solution here is to spread wings. It is about going out there and hunting for new opportunities that will bring in more revenue.
It’s important to note that the opportunities are there. The CARES Act has resulted in accounting firms offering CARES Act Accounting and Reporting services to their clients. Unfortunately, not everyone is able to offer these services, because they just don’t have the time and personnel to do so. E.g. currently firms are trying to cope with the tax season; most of their energies are spent in trying to meet demanding client deadlines.
But here, tax preparation outsourcing for accounting firms can help save the day and free up time that can be spent elsewhere in strategic revenue generation activities. Your remote team that you outsource your work too, will handle all those repetitious tasks for you, that take up a truckload of time, allowing you to focus your energies on the stuff that matters.
Think about remote workers along the same lines. Remember, they are working out of a co-working space or even their homes. Hiring them will help you free up a lot of your time and you can ask your internal staff to take care of more complex work.
Leverage Tech Expertise
Another reason for thinking remote accounting is impractical is the tech aspect. Now, your firm might be working on a commonly used tax/accounting software but does the remote worker you hire or the outsourcing company have this expertise?
An excellent question.
The idea here is to work with an outsourcing partner whose accounting professionals have hands-on expertise on software such as ProSystem fx Tax, CCH Axcess Tax, TaxWise, ATX, Drake, and more. If you are hiring remote accountants to do some work for you, make sure that they have core proficiency in the accounting software you are using.
But wait! It is advisable that you are using cloud accounting to take care of your accounting jobs and while most accounting firms and professionals are using cloud based accounting software it is important to be sure.
Bring Your Costs Down
Whether its tax preparation outsourcing for accounting firms, or hiring a clutch of remote workers to take up accounting work for your firm, these steps help you bring the costs down. You are essentially making optimal use of the tremendous expertise at your disposal, to improve productivity, speed up turnaround times and take up more work, and all this time, you are keeping your costs in check.
Outsourcing helps cut down on costs and that’s not up for debate. But, even if you don’t go the outsourcing route and hire remote workers, you might be able to do so at a far lower cost compared to what you would you pay an in-office accountant.
Saving on employee costs not only helps your bottom line but frees up revenue that can be invested in other activities such as marketing/sales and even learning and development. You can even think about putting a digital transformation plan in action that can improve process efficiencies. A Fujitsu survey states that already, a massive 47% of companies across the financial services sector have implemented digital transformation, while the rest are in various phases of their transformation journey.
Where does your firm stand? Even if you have set your digital transformation plan in motion, think about different areas where some more infusion of tech can happen and prop up your business.
That’s always a good thing, isn’t it?
All that money you save by hiring remote workers or through outsourcing can be spent in many different ways, all of them good, to strengthen your firm, and its accounting activities. Result – increased revenue generation – better profitability.
Immediate Scalability (Up and Down)
A huge reason why remote accounting makes practical sense is that it is extremely scalable. Think of the busy tax season and this busyness is seasonal. So what do you do? Investing in an in-house resource, who works out of your office is not a bad idea but it will drive up costs and what do you do when the lean season kicks in. If the resource is proficient in other areas, he/she delivers value to the firm, but if not, to put it mildly, this resource can become a burden.
Again, remote workers are best placed to improve scalability, seasonal or otherwise. You can hire remote workers to take care of the seasonal accounting tasks and your association with them is seasonal. You can strike a deal with them that ensures their availability at different points of time. This way you have access to the best resources, when you need them.
Outsourcing works the same way. You can partner with a firm and use their services such as tax preparation outsourcing for accounting firms during the busy tax season only. If you want to get some other accounting work done, you can get that done too. But you are not bound to keep this partnership going. If there is work, you use the services of the outsourcing company, if not, you don’t.
The Agility Advantage
Think of remote accounting from the strategic perspective. During COVID-19, accounting firms, CPAs and EAs had to battle a slew of new legislations resulting from the government’s efforts to provide support to businesses and their employees. This requires them to be extremely agile and have the ability to refocus and relearn. All accounting professionals have this ability, but add certain additional pressures and demands to the mix and you have a situation wherein, you might not be able to be as agile as warranted by the situation.
Remote accounting can help you become more agile. You can work with people who have the expertise needed and this means you don’t need to scramble. You can deliver the services your client needs and also market these services. All this is great for business.
As an accounting practice, you need to be in with the trends and respond quickly to changing scenarios. COVID-19 upended the plans of many a business including accounting firms. However, there were a few who re-strategized and reorganized themselves to battle it out. These are the firms that have not only survived but also prospered. If you take a close look at how they have achieved the seemingly impossible, you will note that many of these had added remote accounting to their strategic growth mix, long before COVID-19 appeared on the scene.
So, if you think remote accounting is impractical, you are on the wrong track. It is an advantageous accounting model and should be used as a part of your firm’s efforts to drive growth.