Top Issues With Offshore Accounting and How to Solve Them

Offshore accounting and bookkeeping services increase cost savings and job efficiency, but they aren't perfect—financial and accounting outsourcing comes with a slew of obstacles. If you don't deal with offshore accounting issues quickly enough, they can become a greater problem than you can imagine.

Accounting outsourcing in the United States is currently more difficult due to the Tax Cuts and Jobs Act (TCJA), worldwide pandemics, and a slew of other state and federal reforms, so it's fair to assume some new problems are looming for all organizations in 2021.

Finance and accounting outsourcing services offer a slew of financial advantages, but only if you can overcome the following obstacles:

Obtaining High-End Cybersecurity

According to a Gartner report, $125 billion was spent on information security globally in 2019.

Because accounting data is constantly a popular target for hackers, providing high-level security to clients is extremely difficult for offshore accounting businesses. Small accounting firms, in particular, are targeted because they lack a robust cybersecurity defense mechanism.

All work is done digitally in an offshore arrangement, from sending accounting data to recording data. Therefore the cybersecurity challenge becomes more intense. As a result, even in 2021, the fear of a data breach is one of the key reasons many people would not employ offshore accounting services.

The solution is simple: select a small business bookkeeping service with a dedicated cybersecurity channel. Your outsourcing partner should have a comprehensive in-house IT security system to protect your confidential financial data.

Automation, AI, and Other New Technologies Are All Being Used

Your jobs will not be taken over by robots anytime soon. However, every day, AI is rising in strength, automating mundane accounting tasks like gathering frequent transactions and compiling them into different tax and financial reports.

The accounting team of 40 individuals might save up to 25,000 hours of rework each year by implementing robotic process automation (RPA). Due to this, accounting teams will have more time to focus on other essential issues.

However, it is difficult for accounting firms or any other organization to keep up with the latest accounting technologies in an offshore environment.

The solution: Accounting is a competitive and rapidly growing field, to put it bluntly. As a result, staying abreast with the newest technology advancements is critical for offshore or in-house accounting staff. As a result, offshore accounting firms must establish a distinct IT department to increase the quality and efficiency of their operations.

Language and Cultural Barriers  

Offshore accounting has no bounds, both a benefit and a disadvantage for accounting firms. Offshore enterprises can work with worldwide clients, but they must first learn global languages and cultures to communicate with them.

Consider this: When an accounting outsourcing firm in India works with clients in the United States, it is required to speak English and respect their cultural values. The problem is that India is not an English-speaking country and has a distinct culture from the United States.

These language and cultural problems cause miscommunication between teams, which might cause the project to be derailed.

The solution: Offshore accounting firms should hire bilingual, open-minded employees who can communicate smoothly with an international clientele. For example, we provide accounting outsourcing in the United States, the United Kingdom, and other important English-speaking countries; as a result, each member of our team is proficient in English and mindful of global cultures.

Conclusion

There are a few issues with outsourcing accounting services, but they aren't serious issues that can't be resolved quickly. You won't have to worry about anything, especially if you select an experienced offshore accounting firm or a QuickBooks bookkeeper.  

Totally Booked simplifies the financial side of your business, making it more manageable. Accounts payable/receivables, budgeting, payroll, app integrations, sales tax, custom reports, bank reconciliations, and so much more are all handled by them. Contact us if you need bookkeeping services for your business!