Accounting salaries in the US are rising whether you like it or not and the competition to hire and retain qualified accountants is becoming more fierce, especially in a competitive market where talent is scarce and expensive.
That’s why many accounting and finance firms are looking for alternative ways to expand their operations and reduce their expenses. Many CPA Firms are recruiting non-accounting graduates resulting in a younger workforce. Others, those who need more experienced talent, are looking for a rising strategic approach such as offshoring their accounting positions to other countries.
What is Offshore Accounting Talent?
The global market today has made it possible for companies to look beyond their local confines and tap into the global talent pool. Often confused with "Offshore Accounting," which is designed for companies across all industries to entrust their accounting operations to international firms, offshoring accounting roles and tasks to talent from different countries involves outsourcing services to a low-cost country.
Offshore talent hunting has become a critical strategy for companies to attract top-notch professionals and diversify their workforce.
However, managing and integrating offshore talent presents its own challenges, such as cultural differences, language barriers, and time zone differences. To tackle this, companies should invest in cultural sensitivity training and robust communication tools, ensuring smooth interaction with offshore talent. This will not only improve the overall work environment but also help in retaining the recruited talent.
Advantages of Offshore Talent for Your Firm
Before delving into the steps of building an offshore accounting team, it's crucial to understand the advantages that come with this approach. These advantages can significantly impact your firm's growth and competitiveness:
Cost Savings: Offshoring can help firms save up to 60% on labor costs, according to a study by the Global Sourcing Association. This can result in significant savings on salaries, benefits, taxes, overheads, and infrastructure.
Access to Specialized Skills: Finding talent offshore can mean accessing specialized skills and expertise that might be scarce or expensive locally, enhancing the overall quality of financial services provided by your firm.
Scalability: Offshore teams are a flexible solution for scaling up or down based on your firm's needs, ensuring efficient resource utilization.
Diversity: A globally distributed team brings diverse perspectives and innovative ideas, contributing to enhanced problem-solving and decision-making.
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- Also, read >> 8 Common Questions About Hiring Remote Workers in Other Countries
Steps to Build an Offshore Accounting Team
#1. Define Your Needs and Offshoring Objectives
Begin by identifying which accounting functions you want to offshore. Determine your objectives clearly, whether it's cost reduction, skill augmentation, or process improvement. The outsourcing model and country you choose will be tightly linked to these objectives.
You also need to assess your current situation and capabilities, such as your budget, resources, skills, technology, processes, and performance. This will help you determine your gaps and opportunities for improvement through offshoring.
These are some questions you need to ask yourself at this stage are:
- What are your short-term and long-term goals for your accounting function?
- What are your key performance indicators (KPIs) for measuring your accounting team’s success?
- What are your expectations and requirements for quality, timeliness, security, compliance, communication, and collaboration in your accounting function?
- How much control do you want to have over your offshore hires?
- How much are you willing to invest in offshoring?
#2. Research the Location
Not all countries have the same working culture, and not all firms can adapt to various time zones and accounting standards. So, you need to thoroughly research the potential offshore locations.
For instance, countries in South America like Colombia, Brazil, and Argentina offer a strong talent pool of accountants proficient in English and well-versed in international accounting standards. These countries have little to no differences in time zones, depending on where you are set, and usually have cost-effective salaries compared to the US.
Other countries like The Philippines and India are also very popular, with even lower prices and a wide talent pool, but some minor disadvantages like a bigger time zone gap and a very different working culture. Depending on your goals, is the country more suited to fill your open positions?
#3. Selecting the Perfect Offshoring Model for Your Business
Choose an offshoring model that suits your firm's requirements – whether it's establishing your own subsidiary, partnering with an outsourcing provider, or utilizing a freelance marketplace.
Now, let’s break them through Setting up your own entity is expensive and complex, and unless your goal is to actually open apparitions in that country, it sounds like small to medium accounting firms can afford it. The cheapest option, without a doubt, is working solely with contractors which can lead to limited control over workload and timeframes, and of course, a higher turnover rate.
Most firms are going for the best of both worlds: partnering with an outsourcing provider. This is just like hiring a full-time, dedicated employee without needing to set up your own entity in a different country. If it is your first time working with an outsourcing provider, here are some useful common mistakes to avoid.
#4. Hire a Local Recruiting Agency
Collaborate with a local recruiting agency that understands the nuances of the offshore talent market. They can help source, screen, and select candidates based on your specific criteria:
- Access to a large network of candidates who match your criteria
- Knowledge of the local labor market, laws, regulations, culture, and trends
- Experience in screening, interviewing, testing, and verifying candidates
- Assistance in negotiating salaries, benefits, contracts, and agreements
- Support in onboarding, training, and retaining employees
If you go for partnering it an outsourcing provider, a viable option is finding an Employer of Record: a company that hires the employee for you. Your accounting firm retains all control of the working relationship, while the employer company absorbs all legal and administrative load.
#5. Hire Team Members with the Right Skills
When hiring offshore accountants, focus on a combination of technical expertise, language proficiency, and cultural fit. Communication skills are vital for seamless collaboration.
Make sure to work with HR services or outsourcing providers who have experience in the accounting industry and know the twigs and perks of the profession.
#6. Establishing Policies and Guidelines for the Offshore Team
Clearly define roles, responsibilities, and expectations for your offshore team. Develop comprehensive policies and guidelines to ensure alignment with your firm's values and processes.
This is especially important for remote teams because undefined guidelines can make team members feel isolated from the rest of the team. Some of the policies and guidelines that you need to think about are:
- Roles and responsibilities: Clarify the scope, objectives, deliverables, deadlines, and quality criteria for each accounting task or process that your offshore team is responsible for. Assign a leader or manager for your offshore team who can oversee their work and report to you regularly.
- Communication and collaboration: You need to specify the modes, methods, frequency, and agenda of communication and collaboration between your offshore team and your home office. Feedback mechanisms are very important.
- Security and compliance: With remote work is very easy to loosen up on best practices and protocols for protecting the confidentiality, integrity, and availability of your accounting data and transactions. Make sure that your offshore team complies with the relevant laws, regulations, standards, and ethics in both your home country and the offshore location.
- Performance management: You need to set up a system for measuring, monitoring, and evaluating the performance of your offshore team based on your key performance indicators (KPIs). You also need to provide them with incentives, recognition, rewards, or penalties based on their performance results.
#7. Set up a Proper Infrastructure
Provide the necessary tools, software, and technology for your offshore team to perform effectively. And we are not just talking about the specific accounting cloud-based software we all know and love. You need to think about management platforms and time-tracking software that will get your distributed team members in sync with any other part of the company. A secure and efficient IT infrastructure is crucial for seamless remote collaboration.
#8. Consider Time Zone and Culture Differences
Consider time zone management and cultural fit when setting up workflows and communication channels. If you can, respect the differences in working hours, holidays, festivals, customs, traditions, values, beliefs, attitudes, behaviors, etiquette, norms, and expectations that may exist between you and your offshore team.
You also need to find ways to overcome or minimize the challenges or conflicts that may arise from these differences. Implement strategies to bridge any potential gaps.
#9. Set up a System for Tracking and Reporting
Implement a robust system for tracking tasks, monitoring progress, and generating regular reports. This ensures transparency and accountability within the offshore team.
The ninth step to building an offshore accounting team is to set up a system for tracking and reporting the progress and performance of your offshore team. You need to have a clear and consistent way of collecting, analyzing, and presenting data and information about your offshore team’s activities, outputs, outcomes, and impacts. You also need to have a regular and timely way of sharing this data and information with your home office, clients, stakeholders, and other parties who are involved or interested in your offshore accounting project.
To do that, take this element into account:
- Metrics: How you are going to measure the progress and performance of your offshore team based on your key performance indicators (KPIs).
- Tools: These tools can include software, applications, platforms, dashboards, reports, charts, graphs etc.
- Processes: You can’t follow and track everything, all the time. You need to establish what processes you want to track, report, and review the data and information about your offshore team’s metrics.
- Frequency: This can depend on factors such as the complexity, urgency, and importance of your accounting tasks or processes.
#10. Regularly Review and Evaluate Performance
Conduct periodic performance reviews to assess the effectiveness of your offshore team. Provide constructive feedback and address any challenges to continuously improve collaboration and outcomes.
Build an Effective Offshore Accounting Team
In today's dynamic business landscape, building an offshore accounting team can be a game-changing strategy for accounting and finance firms. Embracing the advantages of offshore accounting, particularly when hiring from regions like South America, can position your firm for long-term success in an increasingly competitive industry.
If you need help with your offshore accounting project, feel free to contact us at Vintti. We are a leading provider of offshore accounting remote talent with experience in the field. We can help you find, hire, and manage qualified accountants in various offshore locations from South America.
We can also help you set up and manage your own offshore team and all the aspects of your offshore accounting project, such as infrastructure, communication, security, compliance, performance management, and more. Contact us today for a free consultation and quote.
