I’ve been a big advocate for offshore accounting services for many years now.
Why?
Three reasons:
- It’s an effective way for firms to reduce operational costs without compromising on the quality of skilled professionals.
- You have access to a global pool of skilled talent.
- It lets you pay team members rates they are happy with.
And while Future Firm isn’t an accounting firm, my team is almost completely offshore.
They get excellent work done, and I can trust them to move things forward even without my involvement.
In this article, you’ll learn how offshore accounting works, how it supports your firm’s growth, and tips to start offshoring.
Let’s go!
What is Offshore Accounting, and How Does It Work?
Offshore accounting means hiring accountants who are based in a different country to do the work your firm needs done.
Similar to how some businesses work with offshore accounting firms, you can also hire offshore talent directly: bringing them onto your team as dedicated staff.
They handle the same tasks a local hire would:
- Bookkeeping
- Payroll
- Tax preparation
- Financial reporting
- Etc.
They’re functionally similar to an onshore team, with the main difference being their location.
Like I mentioned earlier, I’m a big believer in this model.
Honestly, my offshore Future Firm team is some of the best people I’ve ever worked with. 🙂
(Here’s a photo of us during a team retreat in Bohol, Philippines.)
Why Should You Offshore Accounting Services?
Offshoring has come a long way.
The talent pool is bigger, the tools that make remote collaboration seamless are better, and the overall model is more proven.
Here’s why more and more firm owners are making the move:
1. Cost Savings
There’s a real cost advantage of having an offshore accounting team.
And for many businesses, this is the number one reason they offshore.
To give you an example, here’s the average staff accountant salary in the US, according to Indeed:
In comparison, below is the average salary for that same position in the Philippines:
That’s about $8,800…
Or 13.5% of the salary of an onshore team member.
2. You Can Pay Team Members More (and Keep Them Happy)
In theory, you can maximize your savings by paying your team members the average salary.
But the best candidates know their worth.
Yes, there are still people who will apply for a job that pays the average salary…
But what do you think is going to happen when they find a job that pays better?
That’s why one of the best ways to take advantage of offshoring is paying your team members more than the average.
For instance, based on the numbers above, let’s say you’re paying 2 onshore team members the average salary.
So, $130,000 per year.
But let’s say you have 1 onshore team member and 2 offshore…
You’re paying the onshore team member $80,000 (about 25% over the average).
And you’re paying each of the offshore team members $11,000 (also 25% over the average).
That’s $102,000 per year.
This saves you $28,000 every year while having 1 extra team member, but more importantly…
You make both onshore and offshore team members happier because you’re paying them significantly more than what they might get elsewhere!
This is my philosophy in my Future Firm team.
I pay them well above the market rate.
As a result, I’ve never had a team member resign because of salary reasons.
(I’m very proud of the company’s eNPS score, which I think speaks for itself. 🙂)
3. Access to a Global Talent Pool
Offshoring opens up your hiring pool in a big way.
Instead of being limited to what’s available in your local market, you can tap into a much broader range of candidates.
That said, one of the primary concerns for many firm owners is the language barrier.
It’s understandable, but top offshoring destinations like the Philippines and India have no shortage of professionals who are highly fluent in English, both written and spoken.
Personally?
Communication with my team has always been easy.
Plus, I spent 2.5 weeks vacationing in the Philippines…
(Here’s one of the photos I took.)
And not once did I struggle to communicate with anyone. 🙂
4. Scalability
One of the biggest bottlenecks to firm growth for most firms is capacity.
You can’t take on more clients if you don’t have the people to service them.
And if hiring locally is slow, expensive, or just plain difficult in your market, that bottleneck doesn’t go away on its own.
Offshoring helps remove it.
With access to a larger, more available talent pool, adding capacity becomes a lot less painful.
5. It Makes You a Better Leader
This is a benefit most people don’t talk about, but it’s one I’m very appreciative of.
When you go offshore, you’re introducing new variables into how you run your team.
Time zone differences mean you have to get good at async work.
You have to learn to trust your people to move things forward without your involvement.
Then, there are cultural differences.
This isn’t as daunting as it sounds, but it does require awareness.
I’ll give you a personal story.
I once had a Filipino team member leave because of how I was managing her.
I was direct.
And in Filipino work culture, that doesn’t always land the way you intend it to.
Filipinos tend to be more reserved, and what I thought was clear, straightforward feedback was actually making her uncomfortable.
I didn’t pick up on the signals until it was too late.
(That one stung.)
But it made me a better manager.
It taught me to slow down, read the room more carefully, and adapt my communication style to the person in front of me.
That’s the hidden upside of offshoring.
You’re building yourself into a better leader and collaborator in the process.
What Services Can You Offshore?
Offshore accountants can handle a wide range of financial tasks and various accounting functions across your firm.
Tax Preparation
A common concern: if my team is based overseas, will they actually understand our tax code?
Fair question.
But offshore accountants who specialize in this area have typically completed training specifically around the tax codes of the countries they serve.
They bring the specialized expertise needed to handle compliance services without you having to hold their hand.
That includes things like:
- Tax planning and compliance
- Income tax return preparation
- VAT and GST compliance
- Electronic filing
- Tax deduction analysis
Bookkeeping
This is one of the most popular financial tasks to hand off, and for good reason:
It frees up your onshore team to focus on tasks focused on advisory and client communication while your offshore staff handles the day-to-day.
Offshore bookkeeping services typically cover:
- Data entry and reconciliations
- Financial reporting
- Other routine accounting processes
Payroll Processing
Payroll is time-consuming and detail-heavy.
This is why it’s great candidate for offshoring.
Your offshore team can manage:
- Data collection and salary calculations
- Payment disbursement
- Tax compliance
- Reporting and documentation
Accounts Receivable and Payable
AR and AP involve a lot of repetitive process work, but it’s also the kind of thing offshore staff handles well.
This includes:
- Invoicing
- Payment processing
- Collections
- Reconciliations
- Expense reports
- Invoice processing
Financial Statement Preparation
Offshore accountants can also manage the creation and upkeep of financial statements.
This covers:
- Transaction recording
- Adjustments and reconciliations
- Preparation of income statements and balance sheets
- Cash flow analysis
- Compliance with accounting standards
Many firms also use their offshore team to provide audit support when the time comes.
Where Can You Find Good Offshore Accountants?
There’s no shortage of places to look.
The real question is knowing where to start.
Here are some of the best options depending on how hands-on you want to be with the hiring process.
1. OnlineJobs.ph
If you’re hiring from the Philippines specifically, OnlineJobs.ph is one of the most popular platforms out there.
It’s essentially a job board dedicated to Filipino remote workers, and the talent pool is deep.
You post a role, filter through applicants, and hire directly without a middleman involved.
I didn’t offshore during my days as firm owner, but for my Future Firm team, I found a lot of success looking on this platform.
2. LinkedIn
LinkedIn works well if you want to cast a wider net or you’re looking for someone with a more specific background or credential.
It takes a bit more effort to sort through candidates, but the depth of profile information makes it easier to vet people before you even get on a call.
3. TeamUp
TeamUp is a staffing solution built specifically for accounting firms looking to hire offshore.
It’s one of my top picks for accounting staffing agencies.
If you’d rather skip the DIY approach and have someone else handle the sourcing and vetting, this is worth a look.
4. Cloudstaff
Similar to TeamUp, Cloudstaff handles the heavy lifting on the staffing side.
They manage recruitment, compliance, and HR.
What you get is a dedicated offshore team member without having to navigate all of that yourself.
5. Online Communities
While online communities aren’t designed specifically for finding candidates like the others I mentioned above, they’re a good source.
Warm leads are usually better than cold ones, and some of the best hiring referrals might come from other firm owners who’ve already done the vetting for you.
As an example, in my Future Firm Accelerate community, firm owners like you frequently ask each other for hiring referrals.
They also regularly share recommendations and lessons learned from their own offshore hiring experiences.
Offshore Accounting Best Practices
Offshoring isn’t complicated.
But like anything in your firm, how well it works comes down to how well you set it up.
Here are some best practices that will make a difference.
Hire The Best Talent You Can Afford
Like I mentioned earlier, you should offer more than the average salary for the position.
While it might incur a slightly higher cost, the returns in terms of quality and productivity often far outweigh the initial investment.
The key to the whole offshoring approach is hiring the best talent with the right attitude.
If you manage to nail this part, all the practices and strategies below will be easier to implement.
Implement Multiple Communication Channels
Most likely, you’ll be working with people from different cultures and time zones.
I can’t stress enough that having effective communication is the linchpin for success when offshoring.
In an environment where diverse perspectives and experiences converge, effective communication becomes the glue that binds the team together.
Thankfully, modern communication platforms make that easy even with limited in-person interaction!
These types of apps will get you most (if not all) of the way there:
- Video calls: I use Zoom for my weekly team meetings. Google Meet is a good alternative.
- Instant messaging: My team and I use Missive to chat. It also integrates with email, which adds a nice layer of collaboration. Slack is also a viable choice.
- Email: Gmail and Outlook have most of the features you need in an email service.
- Practice management: For collaborating with team members on client work. Check out this list of the best accounting practice management tools for my top picks.
- Recording: Loom is a great tool to provide instructions asynchronously. It can help you cut your meetings in half.
Apply Comprehensive Security Measures
Data security is a legitimate concern when you’re working with a team overseas.
You’re dealing with sensitive client financial information, after all.
Here’s what that looks like in practice:
- Make sure your team is using encrypted communication channels and a VPN like TunnelBear to keep data transfers secure.
- Limit access to sensitive information based on job roles. Not everyone on your team needs access to everything!
- Use secure cloud storage for file sharing rather than email attachments.
I also recommend getting your team on regular training sessions on data security best practices.
None of this is unique to offshoring, by the way.
(These are smart practices for any remote team.)
Respect Cultural Differences
This may not be related to any specific accounting process, bit it goes a long way in terms of team morale, retention, and overall collaboration.
Earlier, I told a story about how I lost a Filipino team member because I was too direct.
That experience changed how I approach managing an offshore team.
Take something as simple as cameras during team meetings.
Most of my Filipino team members don’t turn theirs on.
(I’ve found that that’s just not how they’re comfortable showing up.)
I could push back on it…
But it’s not worth the friction.
More importantly, it doesn’t affect the quality of their work.
That’s the mindset shift offshoring asks of you.
It’s not just about your offshore team fitting into your firm’s culture.
It’s about you fitting into theirs, too.
Once you start approaching it that way, communication gets easier, trust builds faster, and everything works better.
Respect How Your Offshore Team Works
Working across time zones requires a bit of intentionality, but it’s not as complicated as it might sound.
The key is to work as asynchronously as possible.
Your offshore team has their own working hours, routines, and lives.
And while they might work during your schedule if you ask them, that doesn’t mean you should.
Because imposing your schedule on them is a fast way to burn out good people and push them out of your team.
That doesn’t mean you never meet synchronously.
Scheduled check-ins and team meetings have their place.
But when you do schedule them, be mindful of the time difference and try to find a window that works for both sides rather than defaulting to whatever’s convenient for just one party.
Focus on Results, Not Timesheets
My Future Firm team doesn’t fill out timesheets.
Instead of tracking hours, we focus on deliverables, work quality, and deadlines.
To make this work, we lean on capacity planning rather than time tracking.
Capacity planning is the practice of mapping out what work needs to get done and who has the bandwidth to do it, so nothing falls through the cracks and no one gets overwhelmed.
Here’s an example of a capacity plan:
It keeps the team organized without anyone having to log every hour of their day.
This practice was well-received by my team members, many of whom were tired of the traditional time-tracking model.
Consider Hiring a Local Manager
If you’re going all-in on offshore operations in a specific country, I recommend hiring a local manager.
I learned this one the hard way.
When I had a US-based operations manager overseeing my Filipino team, it just didn’t work.
The cultural nuances, the communication styles, the unspoken dynamics went right over her head.
Misunderstandings piled up, and the disconnect stood out.
(Not her fault.)
Now, my Director of Operations is Filipino, and the difference is night and day.
She picks up on things I’d never catch, bridges gaps before they become problems, and earns the team’s trust in a way that someone from the outside simply can’t.
Build a Scalable Firm With Offshoring
That’s a wrap!
It takes a bit of effort in the beginning to get the hang of offshoring.
But it’s a time-tested way to add reliable people to your team while keeping costs manageable.
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Now, I’d like to hear from you.
Which of the benefits stood out the most to you?
Do you have any success stories in offshoring?
Share them in the comments below!
