Outsourced Accounting: A Guide for Accounting Firms
Accounting and CPA firms in the U.S. are continuously looking for innovative strategies to boost efficiency, cut costs, and provide enhanced services to their clients. An approach that really took off with IT and is now prevalent in the accounting industry is outsourced accounting solutions.
In this comprehensive guide, we will dive into the world of outsourced accounting for CPA firms, examining its benefits, challenges, and best practices.
We quickly begin by discussing accounting outsourcing. This practice of entrusting specific accounting tasks or processes to external service providers has become a transformative approach for many CPA firms. It enables them to streamline operations, tap into specialized expertise, and refocus on their core strengths.
However, the decision to embrace outsourcing should be well-informed, weighing the advantages against potential challenges.
The 2023 Deloitte survey revealed that the top objectives of outsourced accounting are “Cost Reduction” and “Standardization and Efficiency of Processes.” Firms no longer have to hire in-house employees for routine and small tasks. Instead, they can simply outsource their functions while the in-house team can focus on core business. This can save costs but, more importantly, increase the firm's efficiency.
While these two are the most preferred benefits of outsourced accounting services, they are not the only benefits. Outsourcing accounting brings more benefits to the table.
Outsourced accounting occurs when a business hires external professionals to handle accounting tasks such as bookkeeping, payroll, tax filing, or financial reporting. Basically, outsourced accounting provides:
For example, a startup hires an outsourced accounting firm to manage payroll and monthly financial statements. This lets the team focus on product development while experts handle the books.
In outsourced accounting, the type of outsourcing you choose, local, nearshore, or offshore, directly impacts cost, communication, and collaboration. Each model serves different needs depending on your business goals and budget.
Local outsourcing means hiring through an agency in your own country.
It ensures strong cultural alignment, native English communication, and legal clarity. Time zone issues are minimal, which improves team collaboration and accountability.
However, it’s the most expensive option. Hourly rates for U.S. professionals can be significantly higher than nearshore or offshore alternatives.
Offshore outsourcing means working with professionals in faraway countries, such as India, the Philippines, or Eastern Europe.
This model offers the lowest labor costs, making it attractive for businesses seeking affordable outsourced accounting solutions.
The trade-offs include time zone gaps, language barriers, and limited face-to-face interaction, which can affect project speed and clarity.
Nearshore outsourcing involves hiring from countries in close geographic proximity, often sharing similar time zones. In the U.S., this includes Mexico, Colombia, or Costa Rica.
This model balances cost-efficiency and real-time collaboration. It’s easier to align schedules, communicate clearly, and even meet in person if needed.
For outsourced accounting, nearshore teams offer a mix of quality, compliance, and cultural familiarity at lower rates than local hires.
Factor | Virtual Accounting | Outsourced Accounting |
---|---|---|
Payroll | Accountants are employed directly by your firm and stay on your payroll. | Accountants are employed by the outsourced accounting firm, not your company. |
Location | Accountants may work remotely, but usually reside in the same country. | Often offshore, working from a delivery center in another region or country. |
Training | Your firm is responsible for training and upskilling virtual accountants. | The outsourcing firm handles all training and skill upgrades for its team. |
Technology | Limited tech support; depends on your firm’s existing setup. | Access to advanced tools and tech-savvy professionals from the outsourced accounting team. |
Expertise | Expertise depends on your internal team’s skill level and training investments. | Offers access to highly skilled, pre-trained experts in outsourced accounting. |
Infrastructure | You manage systems, software, and employee benefits. | The outsourcing firm manages infrastructure and benefits. |
Startups need accurate and timely financial tracking to survive and scale. But hiring a full-time accountant early on can strain resources.
This is where remote accounting services offer a lean, cost-effective solution. By outsourcing accounting, startups gain expert support without the overhead of full-time staff.
With CPA outsourcing, startups can streamline the following tasks:
E-commerce brands face fast-moving financial operations with complex sales channels.
With remote accounting services, e-commerce businesses can streamline vital financial tasks such as:
The global healthcare CRM market is projected to grow at a CAGR of over 14.1% between 2022 and 2028. Software remains the dominant segment, holding the largest share of the market. Here are the use cases for outsourced accounting in the healthcare industry:
Outsourced accounting services provide access to a full suite of specialized financial functions designed to boost efficiency, accuracy, and profitability. Below are the key services businesses can benefit from:
Here’s a guide for more on outsourcing tax preparation.
Partnering with accounting outsourcing experts, CPA and accounting firms gain access to a wealth of experience and knowledge. These professionals are well-versed in the latest industry regulations and best practices, ensuring the accounting work is accurate and compliant.
The Accounting Today raises concerns that only 29% of firms focus on advisory services and 24% on administrative work. One major reason for a firm’s inability to focus on advisory and administrative work is a lack of resources.
Scaling the team with the best outsourced accounting services is a preferred solution for Accounting and CPA firms to tackle this. Outsourcing routine accounting functions liberates CPA firms to allocate their in-house resources and skills to more value-added services.
Firms can scale their outsourced accounting services up or down according to their needs. Whether it's handling a sudden surge in workload during tax season or streamlining operations during slower periods, outsourcing provides a cost-effective solution.
Not only this, but it can also be utilized for seasonal requirements. However, most firms that start using it for that purpose realize its greater value.
As discussed above, talent shortage in the accounting field is a headache for firms, and the bigger problem is those who are left with skills demand high salaries.
By accounting outsourcing, firms can minimize the expenses associated with hiring, training, and maintaining in-house accounting teams.
Technology and Accounting might sound weird together! But the truth is technology has always been a tough row to hoe for the accounting industry. Accounting is a traditional profession and many of its processes have undergone technological transformations.
Top accounting outsourcing partners offer technologically adept candidates who are well-versed in the latest accounting and bookkeeping software. Partnering with them allows accounting and CPA firms to undergo a technological revolution within their firms.
By acknowledging the potential backlash and understanding their mitigation strategies, firms can leverage accounting outsourcing as a powerful tool for growth and success.
CPA firms deal with highly sensitive financial information. Entrusting this data to third-party providers raises legitimate concerns about data security and confidentiality. Therefore, it's crucial to select reputable outsourcing partners who prioritize robust security measures. Data breaches are sensitive issues that can cost accounting and CPA firms a lot.
Before contracting an outsourced accounting solutions partner, review their data security protocols and verify they are ISO, SOC certified, and GDPR compliant.
See how MYCPE ONE ensures data security:
It's often said that you get what you pay for, and this nugget of wisdom holds true in the realm of outsourcing, too. Cheaper services can sometimes be akin to buying a pig in a poke—you think you're getting bacon, but what you really end up with is more like a ham.
Accounting services outsourcing often presents challenges like sloppy account management, miscalculations, or compliance issues. It's a bit like showing up to a chili cook-off with a can of beans—it's just not what anyone was hopin’ for.
It is understandable that some outsourcing companies offer services at cheap rates but with potential risks. However, this risk can be mitigated if you partner with a professional outsourcing company. Leading offshoring providers prioritize quality and reliability. So, it's better for an accounting firm to settle for "pigs in a poke"; instead, they can partner with outsourcing companies.
Like raiding grandma's secret cookie jar, the initial savings of outsourcing can be sweet, this can be due to inflation, contractual changes, or unintentional but inevitable service increments.
It's a classic tale of diminishing returns, akin to eating the same meal every single day; the novelty wears off pretty quickly, huh? Unsustainable Savings is also a major reason for accounting outsourcing failures.
Proactive partners manage these challenges. How? With their transparent pricing models and contracts, they ensure that outsourcing benefits remain sustainable in the long run.
Language Barriers are a primary disadvantage of outsourcing accounting services. Communication is the lubricant that keeps the gears of firms running smoothly. Toss a language barrier into the mix, though, and you might find those gears grinding like a rusty bicycle chain.
Bridge the language gap by implementing English as the communication language between the client and outsourcing partner. Moreover, clear and seamless communication channels are facilitated to convey details accurately.
We found it to be one of the major accounting outsourcing drawbacks. It's like trying to put a square peg into a round hole—they just don't mesh. If an outsourced team doesn't understand the cultural nuances of their client firm, they might misinterpret crucial instructions like mistaking cilantro for parsley in grandma's meatball recipe. Now, that would be a disaster!
Maintain effective communication and mutual respect toward each other's culture. Consider outsourcing as a platform for cultural exchange and collaboration.
Time-zone disparities can also complicate matters, throwing a wrench in the works of the outsourced communication machine. It's the equivalent of working on opposite sides of a see-saw—you're never quite on the same level at the same time.
Organize workflows strategically and leverage technology properly. This can lead to seamless communication and collaboration across different time zones. Use time-zone differences as an opportunity for around-the-clock productivity. For non-end client-facing roles, 3-4 hours of overlap with client hours is sufficient. So, it is better to schedule meetings with the offshore team within the first hour of the day. For end client-facing roles, 6-7 hours of overlap with business hours is needed.
A lack of solid due diligence can be a killer. It's like playing darts in the dark—you'll likely end up nowhere near the bull's-eye. Rushed outsourced decisions can overlook significant discrepancies or operational flaws, leading to a fall from grace that lands harder than a belly flop off the high dive. Inadequate due diligence is one of the mistakes in accounting outsourcing.
Before selecting an offshore accounting partner or company, do the proper due diligence. Avoid "mom-and-pop" shops, which can potentially steal your client’s confidential information. Always work with specialists who have more significant experience in the accounting domain.
Unclear contracts in accounting outsourcing can be as tricky as a greased pig at the county fair. Without clear terms, firms can get mired in misunderstandings that lead to conflicts, delays, and possibly even more complex and expensive litigation. Now, ain’t nobody got time for that!
Clear contracts are a cornerstone of successful outsourcing, so choose a company that always prioritizes transparency and clarity in its contractual agreements.
Poor oversight can let the outsourced situation go awry, like a pack of unsupervised toddlers in a candy store. If no one monitors quality and efficiency, it can lead to a below-par performance, tarnishing the firm's reputation worse than a scarlet letter at a church gathering.
Many offshore staffing companies implement robust monitoring to ensure the ultimate quality and efficiency. Considering monitoring and evaluation as drawbacks is of no use; indeed, firms need to rely on outsourcing partners to enhance transparency, accountability, and performance.
With outsourced accounting services, shadier-than-a-maple IT security risks can crop up like moles in a perfectly manicured lawn. Confidential client information and financial data at stake? It's like playing Russian roulette with cyber thieves and hackers—a risk not worth taking.
It is suggested that the IT security measures of an offshoring company be thoroughly examined. Look for a company with no data breaches.
Mismatched tech systems can turn the process into a regular carnival of chaos and one of the accounting outsourcing challenges. It's like trying to solve a jigsaw puzzle when half of the pieces belong to a completely different set. Settings and protocols gelling together with the ease of oil and water can make seamless operations a pipe dream.
Yes, mismatched tech systems can create chaos, but if we see the positive side of it, we see that it is an opportunity for outsourcing companies to showcase their expertise and skills. When a company uses the right knowledge and tools, these challenges can be overcome, improving efficiency as a result.
Poor support can feel like showing up to a gunfight armed with a rubber duck. Without the right tools and know-how, glitches and hiccups in the system can snowball into full-blown operational disasters.
Before choosing an outsourcing company or partner, review the tech support they provide. Inadequate tech support can hinder operations, so always partner with an outsourcing company with robust technical expertise and resources. The company should be able to respond effectively, resolve troubleshooting issues, and ensure smooth operations.
A lack of industry knowledge can spell doom for an outsourcing venture and create accounting outsourcing challenges. It's like trying to bake a soufflé without knowing the first thing about baking—you're bound to end up with a flat, yucky mess.
While choosing an outsourcing company, keep in mind to know their expertise in the industry you have. Just as a skilled chef can guide a novice through the intricacies of baking a soufflé, a well-reputed outsourcing partner can navigate complex accounting processes with finesse and precision.
Employee resistance can hamper the whole operation faster than a one-legged man in a hopscotch tournament. Changes can cause frustrations or resentment, leading to productivity dips and a souring workplace culture.
Navigating changes with ease is not everyone's cup of tea. So, choose an outsourcing partner wisely who can deal with changes and address your concerns.
Over-reliance on outsourcing can lead to unhealthy dependencies. It's like feeding a cat exclusively canned food— eventually, Garfield is going to forget how to hunt. Firms may lose valuable in-house skills and experience, which, in the long run, can do more harm than good. Over-reliance is the disadvantage of outsourcing accounting services.
You should depend on your outsourcing partner but not entirely on them. Keep your hold also. However, many offshoring partners offer a balanced approach.
As your business grows, managing finances in-house can become inefficient and risky. Accounting outsourcing offers expert support, cost savings, and improved efficiency.
Below are five signs it's time to consider outsourced accounting services:
Why it matters:
Why it matters:
Why it matters:
Why it matters:
Why it matters:
Not all outsourced accounting partners are created equal. The right provider can streamline your operations, improve accuracy, and drive long-term growth. The wrong one? It may cost you time, money, and peace of mind.
Here's what to look for:
Your accounting needs don’t stop at bookkeeping.
An ideal provider should offer a wide range of financial services, including:
As your business grows, your outsourcing partner should be able to scale with you, adapting services to meet evolving demands.
Remote accounting services rely on reliable, secure tech.
Make sure your provider uses cloud-based tools and modern IT systems for data safety and seamless delivery.
For much clarity, here is a guide for a complete tech stack for accounting firm success.
Look for providers with at least 6+ years of proven experience offering outsourced bookkeeping or CFO-level services, especially within your industry. Experienced firms understand compliance and sector-specific challenges and can offer valuable strategic insights, not just data entry.
Watch the full success story here:
Outsourced accounting services rely heavily on digital tools and remote access.
Ensure your provider:
Your provider should have a team of qualified accountants, analysts, and controllers with up-to-date knowledge of tax laws, accounting standards, and software platforms like QuickBooks, Xero, or NetSuite. For example, firms hiring a virtual tax accountant in the Philippines often benefit from both global expertise and cost efficiency.
Every business is different. Your outsourcing partner should begin with a proper needs assessment and then build a solution around your unique processes, goals, and reporting preferences.
Cookie-cutter services often fall short in high-stakes financial management.
Your CPA outsourcing firm must know how to work with top accounting software.
Whether it’s QuickBooks, Xero, NetSuite, or others, proficiency in these tools leads to smoother transitions and fewer errors. Many firms are also exploring the latest AI tools for finance and accounting professionals to boost productivity and accuracy.
While outsourcing can save you up to 70% on costs, choosing the cheapest provider may lead to poor service and costly mistakes. Instead, look for transparent, value-driven pricing that fits your budget without compromising reliability.
Research the company’s reputation through:
Also, consider the provider’s values and communication style. Cultural fit matters, especially for long-term collaborations. You want a partner who “gets” your business and operates with integrity and accountability.
Basil Agrocostea from Agro Accounting CPA shared his positive experience with MYCPE ONE, highlighting a smooth offshore team integration and efficient onboarding. He praised the CRM team's 24/7 support and responsiveness. Despite initial concerns, the partnership has proven valuable as his firm continues to grow. Basil affirms his long-term commitment to MYCPE ONE.
Watch the full success story here:
Are you outsourcing just to save money, or to streamline and scale your business? Make sure the provider understands your goals and can support you in:
Make sure the provider understands your goals and can help you free internal resources, improve financial visibility, and support key considerations in an accounting firm merger.
Before delving deeper into the pricing models, review the table to determine which model to choose.
Model | Best For | Pros | Cons |
---|---|---|---|
Hourly | Ad-hoc or short-term needs | Pay only for what you use | Costs can vary and fluctuate |
Fixed Monthly | Predictable, ongoing requirements | Budget-friendly and scalable | May pay for unused hours |
Value-Based | Strategic or complex financial work | Customized support and flexibility | Requires a strong upfront assessment |
Hourly billing is one of the most straightforward and commonly used pricing models.
How it works
You pay a fixed rate for each hour of work the outsourced accountant performs.
Typical range
According to Worldmetrics.org, U.S.-based bookkeeping services typically charge between $20 to $50 per hour, depending on:
Best for
Businesses with occasional or unpredictable bookkeeping needs.
Companies want to test a service provider before committing long-term.
Pro Tip: Even at higher hourly rates, outsourcing often costs significantly less than hiring a full-time in-house bookkeeper (which can include benefits, training, and overhead).
Fixed monthly pricing provides clarity and predictability for businesses with regular bookkeeping needs.
How it works
You pay a flat monthly fee based on a pre-defined package of services. This typically includes tasks such as:
Typical range
Small businesses typically pay $500 to $1,500 per month, depending on:
Best for
This model is tailored to your specific needs and business goals.
How it works
Instead of billing by the hour or a pre-set package, the provider assesses your business needs and delivers custom pricing based on the value they’re providing.
Typical range
Prices vary widely but often align with or slightly exceed fixed-rate models. However, the strategic benefits can far outweigh the added cost.
Best for
With the growing demand for outsourced accounting services, multiple platforms and directories have emerged to help you connect with skilled professionals across the globe.
Here's a breakdown of the most effective places to begin your search:
Start by using targeted keywords based on your specific accounting needs, such as:
What to do:
Use variations of your search query to expand your options.
Focus on top-ranking firms with strong online reviews, detailed websites, and relevant industry case studies.
Check for certifications, industry affiliations, and client testimonials to build trust.
Popular platforms include:
These platforms are great for finding established firms with verified reviews, detailed profiles, and performance history.
Clutch
GoodFirms
G2
Once you’ve built a shortlist of potential accounting outsourcing providers, the next step is to evaluate them effectively. Here’s a breakdown of the key factors that should guide your decision:
Not all accounting providers are created equal. Many specialize in certain industries or financial functions. Ask about similar clients they’ve served, and request industry-specific success metrics.
Look for firms that have deep experience in your niche, such as:
Verified reviews can reveal things a service brochure won’t, like how the provider handles pressure or adapts to change.
Reputable firms often publish real-world case studies or whitepapers that demonstrate their capability to deliver results. These resources typically show:
Questions to ask on Discovery Calls
Core questions to ask:
Here are the top questions to ask before choosing outsourced accounting services
Provider | Specialty | Key Features | Pricing |
---|---|---|---|
MYCPE ONE | Offshore staffing for CPA firms | 3,000+ staff, 0 data breaches, SOC/ISO/GDPR, 70% cost savings | Custom quote : Schedule a Free Consultation |
QX Accounting | End-to-end accounting & compliance outsourcing | 20+ yrs experience, US GAAP/IRS expertise, flexible engagement models | Custom quote |
TOA Global | Dedicated accounting roles (100+ profiles) | 3,400+ pros, US-trained, tax/compliance ready | Custom quote |
The Back Room | Custom offshore staffing for compliance & tax work | Tailored plans, firm-led hiring, setup & support included | Setup + monthly fee (on request) |
Maxim Liberty | Low-cost, white-label bookkeeping | CPA-focused, flexible frequency, industry experience | $60–$240/month |
With over a decade of proven experience, MYCPE ONE is a trusted offshore accounting solutions provider dedicated to helping small to mid-sized accounting and CPA firms grow, scale, and streamline operations.
From hiring and onboarding offshore accountants to ensuring compliance and data security, MYCPE ONE handles the heavy lifting so firms can focus on strategic growth and client service. With over 3,000 team members, 40+ offices across five countries, and a network of 250,000 professionals, MYCPE ONE provides not just manpower but value-driven talent and insights.
MYCPE ONE offers customized pricing based on role, experience level, and workload.
Typical cost savings of up to 70% compared to U.S.-based hires, with no compromise on talent quality or service reliability.
Contact MYCPE ONE for a tailored quote and engagement plan.
QX Accounting Services (QXAS) has over 20 years of experience in the outsourced accounting industry and boasts a zero data breach record.
QXAS is known for transforming the way U.S.-based CPA firms operate by acting as a seamless extension of their in-house team. With deep expertise in U.S. GAAP, IRS regulations, and multiple accounting software platforms, QX helps firms delegate time-consuming tasks, reduce costs, and scale with confidence.
QXAS follows a custom quote model with three scalable engagement plans:
Founded in 2013, TOA Global is a specialized outsourcing provider serving the accounting industry. With over 3,400 trained professionals based in the Philippines, TOA Global delivers dedicated accounting talent to more than 1,000 firms worldwide. Their talent pool spans over 100 roles, including CPAs, bookkeepers, administrators, and financial analysts.
TOA Global does not publicly publish pricing. All services are custom-quoted based on your team’s size, required roles, and workload complexity.
The Back Room is an offshore accounting and business support firm designed to help accounting practices scale.
Based in the Philippines, their team of skilled professionals is well-versed in routine tax, compliance, and bookkeeping work, giving onshore teams the bandwidth to focus on higher-value advisory services and strategic growth.
Founded in 2005, Maxim Liberty offers affordable and scalable outsourced bookkeeping services tailored specifically for CPA firms across the U.S. and Canada.
Know More Here
Put simply, don't rush in headlong like it's a Black Friday sale, folks. Do your homework, set clear contracts, and nurture a healthy monitoring system. Tailor your approach to suit your firm's unique fabric—like a custom-tailored pair of blue jeans, there's nothing quite like a good fit.
While there are risk of offshoring, it's essential to recognize that offshore accounting can offer a viable and advantageous solution when approached thoughtfully.
Here are some reasons why offshore accounting might be a better solution:
While it's commonly assumed that outsourcing and offshoring are interchangeable terms that signify the delegation of tasks to external parties, this oversimplification needs to be more accurate.
To determine which strategy is right for your firm, you first need to analyze and understand its requirements. Based on these results, you will gain clarity on which strategy will work best for your firm.
Outsourced accounting offers a wealth of opportunities for CPA and accounting firms. While there are challenges to consider, selecting the right outsourcing partner and implementing best practices can help firms make the most of this transformative strategy.
MYCPE ONE can be the best outsourcing option for your accounting and CPA firms. If you are thinking why, here are some of the reasons to choose MYCPE ONE:
Deep research and careful consideration of the history and background of our outsourcing partner is a must. Look at their track record and case studies for better clarity.
Moreover, make sure that the company has strong data security policies.
If we talk about the present economic landscape, US accounting firms are experiencing growing demands to lower expenses without compromising service excellence.
With this, outsourcing becomes an appealing choice for many accounting firms in the US. Also, as US is facing talent shortage in accounting field, outsourcing becomes an exceptional choice for firms out there.
This approach offers enhanced adaptability in allocating resources, enabling US accounting firms to respond to fluctuations in demand promptly.
The evolution of technology plays a significant role here. Communication technology, AI, and digitalization improvements can make outsourcing smoother than a freshly iced cake.
Also, steps towards the standardization of international laws could make the decision to outsource easier than Sunday morning.
Is the transition causing disarray? Are expenses mounting like a beanstalk? Can you spot unhappy employees or communication glitches? These signs can signal an outsourcing situation teetering on the edge like a Jenga tower with one too many blocks removed.
Shawn Parikh is the CEO and Co-Founder of MYCPE ONE. A Chartered Accountant by qualification, he has over 15 years of experience of being a problem solver for small to mid-size firms and over time he has given consultation to thousands of CPAs, accountants and tax pros. Shawn has always been a big believer and advocate of social enterprises and small accounting firms & businesses. He consults and speaks on several topics ranging from Building Remote Team - Remote Working, Offshore Staffing, strategic planning, Scalability of Accounting Practice, cloud accounting, practice management, LinkedIn marketing, etc.
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