Xpitax president Glen Keenan ticks off the reasons accounting firms can benefit from outsourcing.
1. The profession is aging. That ticking in the background may be the clock on the wall or it could be the countdown to the exodus of thousands of boomer-aged CAs now contemplating retirement. â€œThere isnâ€™t a new, fresh set of people to address the demands that are being put on the profession,â€ says Keenan. Worse, those boomers will be leaving with decades of hard-earned experience and knowledge.
2. Outsource the boring, less profitable stuff. Firms can hand off the low-yield, compliance work to focus on the value-added (and higher-profit) services such as consulting work, â€œthe services that your clients notice, with the higher billing rates and the most interesting work,â€ says Keenan.
3. Staff for 12 months, not two. Keenan calls it just-in-time staffing, but the reality is many firms hire staff during tax time they wouldnâ€™t hire any other time of the year and also overwork their key staff during this period, which can lead to burnout and turnover. Rather than hiring for a short-term surge, outsourcing to a place like India lets someone else worry about staffing. (In fact, firms such as Xpitax typically hire people in India a few months before tax time, train them and then redeploy them or let them go over the summer.) â€œOnce they sell you to do personal tax, next they try to sell you other work because they have created the same problem of having a seasonal business,â€ notes one accountant, whose firm offshores data-intensive work year round.
4. Forced standardization. Because the outsourcing process is entirely digital, beginning to outsource often forces firms to examine processes that will get rolled out throughout the practice. â€œThat ends up being one of those hidden benefits that many firms donâ€™t think of,â€ says Keenan.
5. Virtual, not physical growth. Firms can take on more clients, but do not necessarily have to move to new facilities, add computers and staff or worry about client poaching. â€œIt ends up being more of an advantage with our bookkeeping clients,â€ notes Keenan.
6. Faster turnaround time. With India 10 hours ahead of the East Coast of North America, work sent overnight can be returned the next morning. â€œThereâ€™s tremendous value in having that happen across tax, bookkeeping, and financial services accounting.â€
7. Itâ€™s cheaper. Xpitax states that outsourcing accounting functions costs roughly half what it does doing it at home (US$10 to US$12 an hour versus US$20 to US$25 an hour), plus firms avoid the hidden litany of payroll taxes, vacations, sick time, benefits, space and equipment costs