While offshore accounting continues to prove beneficial to businesses and professionals alike, there remains some misgivings about it that have hindered its effective use by others.
Like almost any business strategy, offshore accounting is unquestionably not for everybody. An organisation’s structure and business objectives typically determine whether it is something worth implementing or not. The general nature of offshore accounting, however, has given precedence to a number of myths and misconceptions about it over the years.
Indeed, this concept of offshoring can come across as daunting and a little confusing to the uninitiated, and there certainly are plenty of factors and additional responsibilities that need to be addressed in order for it to be successful. Without this, several issues can arise that collectively will outweigh its benefits. Eventually, it also becomes easier to write off offshore accounting after going through (or even just hearing about) a bad experience with it.
It takes away from local employment
This is possibly the most common misconception about offshore accounting and, actually, offshoring in general. Simplified, offshoring means sending business functions to an external team to accomplish. As “external” nowadays means “overseas”, it is understandable how offshoring can be criticised for taking away opportunities meant for local employees.
Indeed, it does involve sending work elsewhere. However, it does not also mean stripping local teams of job responsibilities and overall employment. Sending process-driven tasks like accounting offshore, local teams get to better prioritise what they consider high-value tasks.
In fact, 88 percent of the 1000 firms that participated in a report called ‘Offshoring of Accounting Services in Australia’ by Bond University considered ‘expanded capacity’ a major benefit of offshore accounting. In short, while some jobs are indeed moved due to offshoring, new opportunities are also created.
Monitoring an overseas team is difficult
Distance between local offices and offshore teams is often seen as the biggest challenge to establishing effective communication and trust. Couple that with the horror stories of supervising teams overseas that is better associated with outsourcing rather than offshoring, and it is evident why some think working with offshore teams is an impossible task.
While the similarities are so apparent that they end up being considered one and the same, the differences between outsourcing and offshoring are significant enough to dispel the myth. The most notable difference is that with offshoring, businesses still get complete transparency because they are involved in the recruitment process of their team/s and have direct control over their functions. As opposed to outsourcing, where businesses mostly pay for only the service/output of the outsourcing company but have little to no hand in how the team is built or how they work.
In the previously mentioned report by Bond University and Staff Domain, Inc. while a little over half of the responding firms who already offshored some of their accounting functions saw loss of managerial control a risk, almost all of them chalked it up as ‘minor’ or one worth taking to reap the benefit of the business solution.
Offshoring is only for ‘minor’ processes
The confusion between outsourcing and offshoring often leads to the thought of the latter, like the assumption is with the former, mostly dealing in customer service or simple tech support solutions.
Granted, training overseas staff is considerably easier when the processes they will handle are simple and structured, and involve little to no risk. However, with many professionals holding specialised degrees and having excellent English literacy, offshoring is also a considerable solution when needing to fill high-quality roles—like those in accounting.
Many firms who participated in the survey for the ‘Offshoring of Accounting Services in Australia’ report were found to already be offshoring a variety of tasks that had low to moderate complexities, and have increased the level of those complexities over the years. Over 80-percent of the firms queried were already offshoring for tasks such as preparing financial reports and bookkeeping and over half are already doing so for their individual and corporate tax accounting needs.
These are just some of the misconceptions some still have about offshoring, many of which are even directly dispelled by benefits that come from the business solution. Granted, offshoring is not perfect, and must be taken into detailed consideration before being implemented by any organisation.
To learn more about offshore accounting and related services, and receive assistance in determining it is ideal for your organisation, contact us today.
For the complete copy of Offshoring of Accounting Services in Australia research, it can be downloaded here.
An Australian Business Process Offshoring (BPO) organisation focused on supporting small to medium businesses, Staff Domain, Inc. is committed to helping its partners overseas achieve cost savings and rapid growth through end-to-end offshore recruitment and operational management.
Based in Pasig City, Metro Manila, Philippines, Staff Domain outsource teams feature the best talent who take pride in the work and the professional choices they make. The company’s State of the Art Facility exceeds the expectations of working professionals and ensures productivity- a space where smart professionals and businesses can grow together.