20 Offshoring and Outsourcing Best Practices for Accounting & Tax Firms

Here are the 20 essential offshoring and outsourcing best practices that accounting and tax firms should know and implement.

1. Tips to Interview Offshore Staff:

The first offshore outsourcing best practices that comes is tips to interview offshore staff. When interviewing offshore accountants, consider conducting video interviews to establish a personal connection. Assess their technical skills, communication abilities, cultural fit, and willingness to learn. It is essential to have a structured interview process and involve relevant stakeholders to make informed decisions.

2. Onshore Anchor (HR):

Designate an onshore anchor who will act as a point of contact for the offshore team. The onshore anchor should have a deep understanding of the company’s goals, processes, and expectations. They will be responsible for managing communication, addressing concerns, and ensuring alignment between onshore and offshore teams.

3. Offshore Account Manager (HR):

Appointing an offshore account manager is one of the most important offshore best practices. An offshore account manager is who will oversee the offshore accountant’s day-to-day activities. This person should have excellent leadership skills, knowledge of accounting and tax processes, and the ability to communicate with the onshore anchor and the offshore team effectively.

4. Onboarding Process:

Develop a comprehensive onboarding process that includes introducing the offshore team to the company’s culture, values, and goals. Provide access to necessary tools, software, and resources. Clarify roles, responsibilities, and expectations to ensure a smooth transition and integration.

5. Integrating Teams:

Promote collaboration and integration between onshore and offshore teams. Encourage regular communication, both formal and informal, through video conferences, instant messaging, and project management tools. Foster a sense of camaraderie and unity across the entire team.

6. Training & Hand Holding:

Provide thorough training and hand-holding to the offshore team, particularly during the initial stages. Provide detailed instructions, process documentation, and knowledge transfer sessions. Encourage mentors and onshore counterparts to guide and support offshore team members as they familiarize themselves with their roles.

7. Regular Meetings, Reviews & Feedback:

Another important offshoring best practices is scheduling regular meetings, reviews, and feedback sessions to ensure ongoing alignment and performance improvement. Provide constructive feedback and recognize achievements. This helps maintain accountability, boost morale, and address any concerns or challenges.

8. Interview & Test:

The next offshore outsourcing best practices to follow is interview and test. Conduct skill-based interviews and tests to assess the offshore accountant’s proficiency in relevant areas such as accounting principles, tax regulations, software usage, and data analysis. Customize these assessments to meet your firm’s specific requirements and objectives.

9. Clear & Right Expectations:

Set clear expectations regarding performance, deliverables, deadlines, and quality standards. Clearly communicate the firm’s values, work ethics, and client expectations to the offshore team. Avoid assumptions and ensure everyone is on the same page.

10. First Onshore & Then Offshore:

Consider starting with onshore resources to establish a solid foundation and refine processes before expanding offshore accounting solutions. This allows for better knowledge transfer, identification of challenges, and documentation of best practices before scaling the offshore accountant.

11. Buddy System:

Implement a buddy system where each offshore team member is paired with an onshore counterpart. This fosters knowledge sharing and peer support and builds stronger relationships between team members.

12. Growth Work / Compensation / Position:

Growth work, compensation, and position are some of the offshore outsourcing best practices that every CPA accounting & tax firm must follow. Provide opportunities for growth and professional development within the offshore team. Offer career advancement paths, training programs, and competitive compensation structures to retain talent and motivate individuals to perform at their best.

13. Flexibility / Time / Work Mode / PTO:

Understand and accommodate the offshore accountant’s work mode preferences, time zone differences, and flexible work arrangements. Establish policies for paid time off (PTO) and ensure a healthy work-life balance.

14. Proper Reporting Structure:

Establish a clear reporting structure within the offshore team. Define reporting lines, escalation processes, and decision-making protocols. This promotes accountability, efficiency, and effective communication.

15. Documented Process:

Having a documented process has proved to be one of the most important offshoring best practices. Creating a comprehensive process documentation that outlines standard operating procedures (SOPs), guidelines, and workflows. This ensures consistency, reduces errors, and facilitates knowledge transfer.

16. Hiring Full-Time Round the Year:

Adopt a strategic approach to offshore hiring by recruiting full-time resources throughout the year. This allows for better resource allocation, consistent availability, and smoother workflow management.

17. Cross Training:

Encourage cross-training among team members to enhance skills, foster collaboration, and reduce dependency on specific individuals. This builds a versatile and resilient team that can handle a variety of tasks.

18. Graveyard Shift Challenges:

Acknowledge and address challenges associated with graveyard shifts when operating in different time zones. Provide support mechanisms, offer additional incentives, and ensure the well-being of the offshore accountant.

19. Phase Wise Building Offshore Team:

Build the offshore team in phases, gradually adding resources and expanding their responsibilities. This allows for effective training, monitoring, and adjustment of processes while minimizing disruption.

20. Tasks That Can Go Offshore:

Identify tasks and processes that can be effectively and securely offshored. Common examples include bookkeeping, data entry, tax preparation, payroll processing, accounts payable/receivable, and financial analysis. Focus on non-client-facing activities to maintain data confidentiality and minimize regulatory risks.

Conclusion:

Offshoring/outsourcing can provide numerous benefits for CPA, accounting, and tax firms when approached strategically and with proper implementation.

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Shawn Parikh is CEO of Entigrity.