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5 Common Outsourced Accounting Services Myths That Have Been Disturbing Small CPA Firms

December 27th, 2023

Don’t believe in the myths related to outsourced accounting services as most of them are baseless. You can check out the most common accounting outsourcing myths and the reality behind them in this post.

Are you a new CPA firm with high hopes and ambitions? Are you trying to establish your account business in the cut-throat competition of the US economy? Do you want to serve your clients with perfection?

Then, you have to surf the boat of outsourced accounting services. That’s because by accounting outsourcing in the US market, you will be able to – hire talented employees at lower rates, can reduce your overhead cost, improve your productivity, expand the client base of your small accounting business and so much more.

However, if you are not sure about outsourcing for accounting firms yet, and you are wondering in the land of outsourcing accounting myths – then you need to pull yourself out of the misconception world and try to accept the reality.

Outsourced Accounting Services Myths – Hindrance in your Success

For small CPA firms, it is economically not possible to hire full time experienced professionals in various areas like taxation, bookkeeping or management. Plus, they can’t afford to update accounting technology every other month. So, outsourcing for accounting firms here is a great solution that can empower small CPA firms.

But, still, there are some myths regarding the outsourced accounting industry lurking in the market that has been disturbing small CPA firms to invest in the outsourcing services. So, today we are going to discuss a few common outsourcing accounting myths that you need to wipe out today from your mind.

Myth #1. Outsourcing services is beneficial for large companies only.

Reality – It is a misconception going in the minds of lots of CapActix clients that only big accounting firms in the US can benefit from our services. But, that’s a sheer myth – the large firms can indeed increase their productivity and efficiency by outsourcing accounting work, but it doesn’t mean that small or mid-sized accounting companies can’t gain benefits as well.

With the help of outsourced services, small accounting firms can provide a variety of services to their clients at affordable rates. For instance, if any of your clients wants you to perform taxation as well as bookkeeping services, but you only have bookkeepers in the house. Then, you can outsource tax professional’s services and use your in house staff for bookkeeping services. These way small accounting companies will be able to offer all kinds of services to their clients without hiring full-time professionals.

Myth #2. My company’s safety and privacy will be compromised.

Reality – This is a myth that has been stopping numerous companies in accounting outsourcing in the US. People assume that once they share confidential information with strangers and welcome outsourcers in their business, then their companies’ safety and privacy will affect.

Well, this is somehow true – now, if you handover confidential clients files to strangers without any verification, then you are indeed compromising your company’s safety. But, if you hire well trusted outsourced accounting firms with good client reviews and reputation, then you won’t lose anything.

Moreover, all the trustworthy accounting outsourcing firms foremost sign agreement with their clients so that all the terms and conditions will be legalized in the written to avoid any future conflicts. So, if you are using the services of trustworthy and reputed accounting firms, then your company’s safety and privacy will remain well intact.

Myth #3. There is no difference between offshoring and outsourcing.

Reality – Accounting business holders often get confused between the offshoring and outsourcing accounting services. Both these terms are completely opposite from one another. Outsourcing accounting services is an agreement between you and a third party company that will provide particular services to you. However, offshoring means hiring an accounting team from a different country where professionals will be available at cheaper rates, but the employees remain part of a company.

Offshoring is adopted by US accounting firms because some countries have low wage rates and tax rates as per the US. So, if you are wondering that you have to manage your outsourced accounting team, then you are mistaken as outsourcers aren’t part of your team. They will be managed and trained by the service provider company that means apart from assigning the work and making the payment – CPA firms have nothing to worry about.

Myth #4. Long term partnerships can’t be established with outsourced accounting companies.

Reality – Most of the accounting firms consider outsourcing accounting services short term activity only. They think that outsourced services can offer them a one-time solution only. Now, of course, it is a myth because CPA firms can establish long term relationships with outsources service providers.

You can entirely outsource certain accounting services from the outsourced company. Such as if you don’t have tax expertise in your team, and then you can still effectively provide tax services to your clients by outsourcing the service. Moreover, tax services are required during a specific period so you can easily make long term contracts with outsourced accounting firms.

Myth #5. High level IT infrastructure is required for outsourcing accounting services.

Reality – a large number of accounting firms hesitate to use outsourcing services because they don’t find themselves sufficient enough to deal with the large IT database required to establish a connection with outsourced service providers. Well, that was an old story, because communication tools and numerous other IT applications are now available at very cheaper rates.

Small accounting firms can easily acquire the tools and applications to establish a connection with their outsourcing accounting service providers. Moreover, due to intensive competition in the technology sector – some of the IT tools are available for free. So, if you are not using the services of outsourced accounting companies because you don’t want to increase your IT expenses, then no need to worry as hiring outsourced team won’t affect your budget much.

Myths Are Useless

Myths are just created out of a few bad experiences. You can’t judge the full book from the cover page – similarly, if you want to experience the outsourced accounting services benefits, then you have to try yourself. You can’t believe in some baseless myths – you have to first try, and then believe. So, if you believe in any of the above discussed five accounting myths, then immediately clear your thoughts.