Accounting Offshoring Strategies Your Clients Will Support!

A study from Bond University into accounting offshoring – looking exclusively at the auditing function – found 67% of small accounting firms don’t disclose they offshore. Compared to 100% of the large accounting firms who categorically do. In the case of the small firms, upon disclosure of offshoring, not one of their clients precluded them from offshoring work related to their audit.

Of the many hundreds of firms we have spoken to about offshoring in the last two years – some believe that clients won’t like to learn that their work may be conducted in parts overseas. The reality, as this Bond University research showed us and our own experience demonstrates, this is not the case.

Clients want great outcomes. They also want a firm they can trust – so transparency and open conversations matter.

Offshoring accounting services is a smart strategy for SMEs looking to overcome talent shortages, salary limitations to great staff or simply to boost profit margins. It’s not a dirty secret to be hidden in the fine print. However, it is essential that offshoring is approached in a thoughtful manner, particularly with regards to data privacy and the treatment of offshore staff.

In this guide, we’ll share how accounting firms can approach offshoring transparently in a compliant, smart and safe way. And win the full support of clients.

Listen to the ATO 

The Australian Taxation Office stipulates that tax returns must be lodged by an Australian accredited professional. Returns may be prepared offshore, but they must be reviewed, and lodged, in Australia by someone qualified to do so. It does not dictate where or how the return is prepared. 

 Of course you have the duty of care to review all work and ensure it is accurate. This is something you should be doing regardless of whether you’re offshoring any finance and accounting function. 

The CPA offers sage advice too  

The CPA states you must abide by the rules and procedures outlined by the Accounting Professional and Ethical Standards board and have adequate security in place to safeguard data. Furthermore, the Standards board states that clients must know where your outsourced staff are located and the extent of their involvement in delivering professional services.

We agree. 

Transparency builds trust.

Do not hide information in small print in a clause buried in your terms of engagement. If you have chosen a professional offshoring partner, then in effect, you have an office overseas, with your own employees. Trained by you, coached by you, collaborating with your team and following your company’s policies and procedures.

That is something worth promoting upfront as an asset and is certainly worth discussing openly with your clients to dispel any concerns about parts of their work being outsourced offshore. Ultimately, you’re not outsourcing your work at all – it’s being completed by your team in the Philippines.

Data security and privacy is paramount.   

The greatest, and a legitimate concern from clients – is the matter of data security. This is an area that you must consider and discuss at length with your short list of offshore suppliers. Staff Domain for example, has strict security protocols in its Manila office including but not limited to redundant fiber optic internet links; local destruction of storage media (hard disk, SSD, CD-ROM); removable media restrictions and disabled USB ports on PCs; Secure printing; BitLocker drive encryption and much more. Even policies regarding the use of smart phones with cameras.

Discuss openly your approach to security and privacy from an organisational point of view, not just an offshoring one. Security breaches aren’t exclusive to offshore instances!

Only hire the best staff, regardless of their geography

Outsourcing offshore for many firms just like yours, involves hiring a team of your own but hosted in a space you lease. They are your team members. Think of a global organisation. Are the team members based in Asia any less qualified or valued than their Australian peers in the same role?

Team members regardless of location, need to be selected carefully, trained thoroughly and nurtured constantly. That is how you develop great talent – and great talent is what your clients expect from you. Hire great talent and you (and your clients) will get great outcomes.

When you work with a professional offshoring organisation, your team will be qualified. They must also be fully equipped with the necessary tools to perform their jobs well and collaborate seamlessly with their Australian or New Zealand based team or clients. They’re not hidden in a sweat box somewhere, and they certainly aren’t treated any differently to your local staff. You can find out for yourself which offshoring companies are professional and provide the same experience your Australian team expect from you. Just follow the questions in our checklist which you can access here.

If you don’t want to hurt your reputation, then don’t support offshoring organisations that don’t treat people the way you’d expect to be treated yourself.

Don’t entertain the suggestion that companies offshore to avoid paying superannuation, maternity leave or firing compliance.

Filipino labour laws may be different to Australia, but they are equally protective of employees. For example, they have compulsory healthcare for every employee after 6 months. In fact Staff Domain offers employees what’s called “HMO” from day one not just for the employee, but for a plus one of their choice.

Every office must have a health station with a nurse for staff over 50, and if there are over 100+ staff, you need a visiting doctor on board weekly.

There are also laws in place to ensure that employees are safeguarded against fairweather employers. This includes notice periods of 1 month for every year and processes that can take weeks.

In our experience no client turns to offshoring to avoid Australian compliance laws. Small accounting firms turn to offshoring to overcome barriers to their growth. There is no shame in that and it is certainly a path many of your clients will understand and relate to.

Don’t go into offshoring blind.

If you’re interested in growing your business, spend the time learning how to offshore in a compliant, safe and seamless way. Our website offers extensive information. You can also book an obligation free meeting with one of our business development partners who will happily answer any questions you have.