Many Certified Public Accountants (CPAs) and accounting firms are looking to outsource specific tasks in the hopes of consolidating their business and freeing up time to focus on more important work. Tax return preparation is a popular task to outsource, and large-scale CPA firms have benefited from low labor costs in India and quick turnaround times. Outsourcing is a part of business, but it has many implications, and CPAs have had varying degrees of success in making outsourcing work for them.
Preparing taxes for CPAs is done in a fairly straightforward manner. The US CPA firm scans the tax returns of its clients and stores the results in a PDF file on the network. The scanned documents are uploaded by the outsourcing firms to a US data center so that the workers can easily view them. Tax returns are prepared by experts and electronically sent to the CPA firms for review. Therefore, lower labor costs is one of the main reasons for outsourcing CPA work.
According to information published in the June 2006 issue of CPA Journal, a staff accountant in the United States earning $45,000 annually pays about $39 per billable hour. If the work is outsourced, the cost is $15 per billable hour. Another incentive is quick turnaround times. Owing to the time difference between the US and India, a tax return that is sent abroad during the day is frequently processed in time for the US CPA firm to download in the morning.
Why are CPA firms outsourcing tax preparation?
The expansion of the business is one of the main reasons that companies usually take interest in tax preparation services. Similarly, outsourcing these kinds of services makes it easy to get new customers. You have more time to attend to the crucial needs of your clients when you outsource tax preparation.
Managing an internal team for these responsibilities could jack up the company’s operating expenses.
A firm can’t afford to lose clients. So, outsourcing tax return preparation to offshore companies allows you to maximize your return at a lower cost. Moreover, you don’t want to lose those important clients, which could happen if you get bogged down with important assignments.
The main benefit of outsourcing is that you get a top-notch job from tax experts in the allocated amount of time.
Working with an external firm to prepare taxes for CPA firms is easier than working with an internal accounting team.
When you use an outsourcing company to provide you with a pool of qualified employees, you may be able to increase business efficiency.
Managing the hiring process is even more difficult, and you might not have access to the quality team at work. It is hassle-free for the business to outsource these tasks rather than dealing with these kinds of problems.
It is not surprising that the majority of accountants get frustrated with their work. However, you can still deliver exceptional services to your clients even if you are not focused on tax preparation.