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Unless you’re an accountant - scratch that - even if you’re an accountant, handling all of your organization’s accounting tasks can feel like a chore. Seeing as how you still can’t outsource it to ChatGPT, there are few options available. I’m here to help, showing you how to best find and evaluate offshore accounting services in 2023.

Operating a successful tech business in the US often means juggling multiple responsibilities, including maintaining financial health, focusing on core business operations, and achieving profitability. You don’t have all day to quiz accounting firms to figure out if they know the difference between financial reporting and tax preparation. Luckily, there are ways to quickly evaluate cost-effective, offshore solutions so you don’t have to hire and train an in-house accounting team.

Why Offshore Accounting?

Offshore accounting, often known as accounting outsourcing, allows businesses to contract their financial transactions, accounts receivable, payroll processing, and payable operations to professionals located in different countries, such as India and the Philippines. These offshore accounting firms offer a range of bookkeeping services, helping (mainly) small businesses manage their accounting needs efficiently and effectively.

Offshoring offers several benefits over an in-house team, including cost savings, access to a broader pool of accounting professionals, and 24/7 services due to differing time zones. This approach frees up time for business owners to focus on their core business operations, improving overall profitability.

Finding the right offshore accounting services for your tech business is crucial. Here are some factors to consider:

Experience and Expertise

The best offshore accounting teams are those with a solid foundation in bookkeeping and managing accounting tasks. While basic accounting knowledge is essential, you also want a team that understands the unique financial landscape of tech and SaaS businesses. For instance, they should be adept at financial reporting tailored to SaaS businesses, managing the nuances of tax returns in the tech sector, and safeguarding sensitive data intrinsic to these businesses.

Another crucial area of expertise is proficiency in accounting software. Tools like QuickBooks and Xero are commonly used in the industry and can dramatically improve the efficiency of accounting operations. Ensure your offshore team is well-versed with these platforms and can utilize them effectively to manage your accounting needs.

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While cost savings is one of the main benefits of offshore accounting, it's essential to look beyond just the price tag. The focus should be on getting value for money. You want a service provider that offers high-quality services at a competitive price. More importantly, the pricing structure should be transparent. Hidden costs can quickly erode the financial advantage of offshoring, so make sure the pricing terms are clear right from the start.

Data Security

When you're outsourcing accounting tasks, you're entrusting the provider with sensitive financial information. It's essential that the offshore accounting firm understands the gravity of this responsibility and has stringent data security protocols in place.

Look for service providers that adhere to your payment security policies as well as international data security standards, and are proactive about staying updated with the latest best practices in data security. The firm should have a robust data protection framework that covers physical security measures, IT security protocols, and regular staff training on data privacy.

Communication and Business Process Integration

Seamless communication is the cornerstone of a successful offshore relationship. Language barriers or significant differences in time zones can hamper effective communication and slow down processes. Therefore, it's critical to choose an offshore partner that can ensure clear, consistent, and timely communication.

Moreover, the offshore accounting firm should be flexible enough to adapt to your existing business processes. This ensures seamless integration between your in-house and offshore teams, minimizing disruptions and enhancing productivity. A partner who can mirror your business hours, match your operational tempo, and work with your preferred communication tools will be a valuable addition to your team.

Where to Find Offshore Accounting Firms

Okay so, you’ve determined that you want an offshore, cost-effective team to handle some of your internal accounting functions. Now, where do you go looking for them?

This part can be extremely simple if paired with the evaluation methods that follow. Some places that I would recommend looking for accounting services are:

P2P Platforms: Websites like Upwork, Fiverr, and Freelancer have numerous accountants and accounting firms offering their services. You can filter by location if you're looking for companies in a specific region, or that work in a specific region (as they may have their filters set similarly).

Social Media: LinkedIn and other networking sites can be a good place to find offshore accounting services if you find the right groups to join. There’s a lot of spam and low-quality people on social media though, so be wary on most networks other than LinkedIn (and even then, practice a bit of additional caution).

Referrals: This is the best route, in my opinion. If you know other business operators who use offshore accounting services and have similar issues to you, they may be able to recommend a provider. If you don’t know any, it’d be worth connecting with some, to be able to tackle issues like this with more confidence moving forward!

Google Search: If all else fails, a simple Google search can also yield results for offshore accounting service providers. Worth giving it a shot.

I’ve heard good things about a number of offshore accounting services, including:

Here are some low-cost offshore accounting service providers that might be suitable for your US-based SaaS company:

  1. BMC SAAS: An Indian offshore company offering accounting, finance, and payroll services.
  2. Compass East: They aim to make finance and accounting simple for SaaS companies with a bottom-up approach that scales alongside you.
  3. Entigrity: This is an offshore hiring company for CPA & accounting firms. They serve 725+ clients nationwide.
  4. Founder's CPA: They offer fractional services for SaaS startups to help with financial modeling, budgeting, forecasting, KPIs analysis, revenue recognition, and GAAP compliance.
  5. Capactix: They offer outsourced tax preparation services to CPAs, EAs, Accounting, and Tax Firms across the USA; might as well cut the middle man and see if they’d be a fit for you.

Evaluating Offshore Accounting Services

When it comes to selecting the best offshore accounting services for your US tech business, a methodical evaluation is key. It's not just about choosing a service provider that offers an array of services at an attractive price. You also need to ensure that the offshore accounting firm aligns with your business values, operates at a high professional standard, and can adapt to your evolving needs. Here are some key aspects you should examine:

Testimonials and References

The experience of previous clients can be a treasure trove of information about the performance, reliability, and service quality of the offshore accounting firms you're considering. Testimonials usually highlight the strengths of the company, helping you understand if their strong points align with your requirements.

In addition to reading testimonials, you should also request references from the firms. This will allow you to directly connect with their clients, ask pointed questions, and get a genuine, unbiased perspective of the offshore accounting services on offer. Questions might revolve around the firm's proficiency in financial reporting, their aptitude for managing accounts payable and receivable, and the overall experience of outsourcing accounting tasks to them.

Trial Period

A trial period is a window into what you can expect from an offshore accounting service provider. Think of it as a test drive before buying a car. It offers you the opportunity to experience the firm's capabilities, responsiveness, and quality of service firsthand.

During this phase, pay attention to how well the firm manages financial transactions, maintains financial records, prepares financial statements, or any other task they’ll be doing for you consistently. This can provide a clear picture of their ability to handle your accounting needs. Also, observe how well they integrate with your in-house team. This is crucial because a smooth collaboration between your offshore and in-house teams can significantly enhance productivity and efficiency.

Capability to Scale

Your choice of an offshore accounting service provider should not just be based on your current needs but also on future requirements. As your tech business expands, your accounting needs will become more complex. You will have more financial transactions to record, more employees for payroll processing, and potentially, more regulatory norms to adhere to.

Thus, it is crucial that the offshore accounting firm you choose has the ability to scale its services in line with your growth trajectory. They should be able to seamlessly step up their services, whether it involves managing a larger volume of tasks or dealing with more complex accounting functions.

Customer Support

In an era where businesses operate round-the-clock, having access to prompt customer support is non-negotiable. An offshore accounting service provider with a responsive customer support team can address your queries and concerns without delay, thereby ensuring your accounting operations are never disrupted.

Find out if the company provides multiple channels for support, such as phone, email, or chat. Also, consider their response time, especially for critical issues. Ideally, the firm should be able to provide immediate assistance to prevent any hindrance to your accounting tasks.

Straight To The (Out)Source

Remember that the process of evaluating offshore accounting services is as critical as the decision to outsource. A careful evaluation, focusing on these key aspects, can go a long way in ensuring you choose a partner that adds value to your business, and not just another service provider. 

The right choice will provide you with a robust accounting infrastructure that not only saves cost and effort but also fuels your business growth by providing strategic financial insights.

If you want more financial tips and business operating tricks, The CFO Club’s newsletter is right for you; featuring industry leaders as well as specific subject matter experts, it’s the place to get your up-to-date info for running a SaaS or tech business.

By Vidhi Mehta

A Junior Accountant at Black & White Zebra, Vidhi is an ACCA Member with six years of accounting experience.