What is Offshore Accounting A Beginner’s Guide and Its Benefits
What is Offshore Accounting
It is simple to understand offshore accounting which is nothing but delegating or assigning certain portions of your accounting tasks to a third-party service provider. It is also a type of outsourcing practice where you are assigning certain accounting tasks to an accounting service provider based in some faraway country.
Small business enterprises and accounting firms increasingly utilize offshoring accounting to address challenges like talent shortage, workload, and cost. Through it, you can delegate your complex and non-core activities such as:
- Tax Compliance
- Accounts Receivable and Payable
- Bookkeeping
- Payroll Management
- Inventory Management
Let’s get into the world of offshore accounting and understand why it’s not going away anytime soon.
Reasons Why You Should Choose Offshore Accounting Services
From bookkeeping to management accounts, offshore accounting will cover everything essential for running an SME and accounting firm smoothly. Down below we have elaborated the reason why you should choose offshore accounting services.
Cost of Offshore Accounting
By availing of offshore accounting services, you can reduce the need for hiring a team of accountants, thus saving costs that would have come in the form of salary, benefits, and related infrastructure expenses. Furthermore, delegating tasks to an offshore accounting service provider eliminates the need for spending on recruitment and training. By outsourcing some of your accounting duties to an accounting service provider you will be able to save on labour costs and other related expenses. This way, you will able to reinvest the money saved on business expansion and development and improvement of services.
Handling of Peak Season Workload
If you are an owner of an SME, you would have noticed that your accounting firm will audit your enterprise’s financial records at the end of the year which leads to more work on your accountant. Such a sudden increase in workload will increase the chances of human errors or mistakes. By choosing to outsource via offshore accounting, you can save on time by outsourcing tasks that would have consumed a lot of time such as bookkeeping, financial reporting, audit, tax calculation, and preparing trail balance, to name a few. By ensuring that you do not overburden your accountant, you can reduce the chances of errors.
Getting Access to a Pool of Experienced Talent
It is possible that you may face difficulties in hiring the right accounting talent to run your SME or accounting firm smoothly for multiple reasons. Rather than stressing about finding the eligible recruit, you can focus on getting that talent through offshore accounting services. Through offshoring, you can get access to the professional and experienced accounting talent of third-party service providers located in foreign locations at a lower cost.
Focus on Important In-House Priorities
When your enterprise or accounting firm grows in size and business then your in-house team will find it difficult to manage the increase in workload. Waiting up to last minute will only increase the pressure on your in-house staff which will cost you the quality of services. Therefore, it’s wise to opt for offshoring accounting services which will relieve the burden on your in-house staff who can concentrate on business expansion. Thus, resulting in quality improvement and an increase in profits. Through offshoring, you save time for your in-house staff which can be invested in developing or acquiring new skills.
Benefits of Offshore Accounting for Businesses
Apart from the above-mentioned reasons which can qualify as benefits, there are some other important benefits or advantages offered by offshoring accounting that are important to mention. These benefits are:]
Ensuring Full Compliance
Through offshoring accounting via experienced accounting service providers, you will not have to worry about missing tax deadlines. All this will be handled by your offshore accountant who will be well-versed in UK tax laws and regulations stipulated by HM Revenue and Services.
Fewer Risks in Operational Management
Recruiting people into your organisation has its own set of challenges such as the cost of salary, benefits, and related expenses, which has to be borne. Furthermore, desktops, office infrastructure, accounting software, and fulfilling ISO (International Organization for Standardization) requirements for the workplace are a few things.
Also, plan for requirements accordingly because recruiting a talent in-house for work that is only for a short period might be difficult. That’s why by availing the services of an offshoring accounting firm, you will not have to shell out extra money on recruitment, training, and maintenance of staff. All your accounting tasks will be handled by the service provider thus enabling you to reduce the risk and improve your services.
Quality with Fewer Errors
The complex field of accounting can only be handled perfectly with accuracy, experience, and attention. While you may be experienced in your business and must be confident in handling multiple tasks accounting is a different beast altogether. Any mistakes in financial records will lead to hefty fines and loss of reputation. Through offshoring accounting services, you will get access to skills and experienced talent who can deal with huge volumes of paper, bills, and books of accounts for your firm. Through this outsourcing, you are saving time and getting documents done correctly and before the tax deadline.
Strict Data Security and Transparency
You may be heisting to offshore accounting services because of the fear of your data being exposed to third-party service providers but that fear is completely unwarranted. Accounting outsourcing and offshoring service providers are bound to adhere to data security measures to protect sensitive information because their business depends on it.
Scalability
There will be periods when you may not have much accounting work such as payroll, quarterly financial reports, and so on. In that case, you cannot lay off your in-house staff because they have an interest in a long-term association with your organization. This is where offshoring accounting comes to your rescue.
Under it, you can offshore certain crucial tasks whose requirements go up and down. Through offshoring, your staff can receive crucial support when the workload is high, and you can scale down the requirement when it reduces. Thus, reduces the requirement of hiring and laying off staff that adds to your financial burden.
The Best Advice for Organisations Considering Offshore Accounting Outsourcing
Multiple service providers are offering offshoring accounting services that cater to various sectors. They conduct accounting tasks such as generating financial reports, tax calculations, income tax filing, and accounting for accounts payable. But the question remains as to how are you going to select from them the best one that can meet your requirements. Well, we can guide you in this, you only have to follow the below points.
- Check the Cost Effectiveness of the Offshoring Team
- Get Hold of a Professional Team
- Is Your Service Provider Reliable
- Check for Technology and Infrastructure Capabilities
- Are They Offering Customised Client Centric Services?
Offshore Accounting Service Types
Bookkeeping Services
Bookkeeping involves keeping track of, classifying, and organising your business’s daily financial activity. Of course, it involves a lot of work and you cannot afford to devote your resources or staff all the time. By outsourcing bookkeeping to an offshoring bookkeeping service provider, you can focus on other important tasks.
Financial Statement Preparations
If you are not able to devote time to the preparation of financial statements then you must delegate this responsibility to an offshoring service provider. Their accountants will ensure proper preparation of financial statements by providing them with all necessary information.
Tax Preparation
Not preparing your tax on time can put your firm and business in danger but we understand that it is complex and time-consuming. Still, one cannot ignore it since it involves calculating, preparing, and filing income tax returns at the end of the year. Tax preparation aids in balancing accounting books; preparing tax and financial reports, submitting a return, and much more.
Payroll Services
Rather than managing payroll through your in-house payroll team which is a recurring and time-consuming process why not outsource payroll to an offshore accounting firm? Through it, you can control salaries and benefits and also save time and reduce errors thanks to the accounting software used by offshore accountants. These accountants also ensure that your payroll is compliant with all tax rules and regulations.
Conclusion
Offshore accounting services will be quite beneficial for your accounting firm or business. In this blog, we have tried to make you aware of the benefits of offshore accounting, questions you must ask while selecting an offshore service provider, and a brief about types of offshore accounting services. All this will help in finding the perfect offshore accounting service provider such as Corient Business Solutions.
We specialise in offering tailored accounting services such as Bookkeeping, Payroll, Year-End, and VAT, to name a few. Our teams have vast experience in multiple payroll applications such as Sage, Brightpay, Xero, Moneysoft, Earnie, Star Payroll, and several others. We design our services to provide your practice with a competitive edge in the market. Upgrade your services by partnering with us and add value to your services. We can connect at your convenience on a call or online meeting where we can discuss in detail about our services.