For several years, the accounting industry has faced the challenge of a staff shortage. The problem has only gotten worse with the rise of multinational corporation culture and the emergence of new and exciting market opportunities. Accountants nowadays prefer to take on lucrative jobs, often with corporate giants or outsourced accounting services firms that not only pay well but also provide opportunities for skill development. As a result, while large corporations sweep up all the talent with attractive job offers, smaller firms and start-ups are forced to deal with the challenge of finding skilled accountants.
To add to the workforce challenge, the global COVID-19 pandemic has drastically altered the accounting industry, as well as other industries. Firms, on the other hand, have had to deal with scenarios such as cost cutting and job cuts, while accountants have had to deal with incompetent jobs and unemployment. When you add all of the challenges together, you get a massive accounting staffing crisis. So, how do small and medium-sized businesses deal with it? You can't rely on chance to find the right candidates for your company and put your expansion plans on hold until then. So, what can you do in this situation?
We have a promising and proven solution for you: outsourcing! Outsourced accounting services have been in huge demand across the world owing to their numerous benefits. In order to scale their firms quickly, a large number of CPA firms have been turning to experienced and reliable accounting outsourcing companies. Outsourced accounting refers to accounting tasks carried out virtually by accountants employed and managed by a third party.
However, many CPA firms get the terms "virtual accounting" and "outsourced accounting" mixed up. While the two are frequently used in the same context and share many similarities, there are some important distinctions to be made.
Virtual accounting refers to accounting tasks that are completed virtually, i.e., via the internet. Virtual accountants are resources employed by a CPA firm or belonging to a third party, and they frequently work from home. The global trend of virtual accounting has been on the rise, particularly since the outbreak of the COVID-19 pandemic. To meet the increasing workload and challenges of accounting, several CPA firms are now allowing their accountants to work virtually.
There are numerous advantages to virtual accounting that have only recently come to light. Among them are the following:
1. Workplace comfort and convenience
2. Reduced operational costs in the office
3. Improved turnaround time for critical tasks
4. Accountants' work-life balance has improved.
Accounting tasks that are outsourced are those that are performed virtually by accountants hired and overseen by a third party. These accountants work from a delivery centre and are based remotely, sometimes even across borders.
Because of their numerous advantages, outsourced accounting services are in high demand all over the world. A large number of CPA firms have turned to experienced and dependable accounting outsourcing companies in order to scale their firms rapidly without incurring significant cost increases.
Outsourced accounting not only provides all of the advantages of virtual accounting, but it also adds to the funnel. Among them are the following:
1. CPA firms experience less stress and hassle.
2. Significant cost savings and increased profit.
3. Quicker turnaround times.
4. There are no operational issues.
5. Accountants with extensive knowledge and experience.
6. Use of cutting-edge technology and software.
7. Data security and confidentiality are guaranteed.
Since they both refer to accounting tasks that are performed virtually, "virtual accounting" and "outsourced accounting" may appear to be synonymous. However, there are a few vital distinctions between them that CPAs should understand in order to select the best work model for their firm.
To begin, all outsourced accounting is virtual accounting; however, not all virtual accounting is outsourced accounting. The following are the key differences between the two models:
1. Payroll: In virtual accounting, you can hire the accountant who works for you, whereas in outsourced accounting services, the accountant is hired by the outsourcing company. As a result, the latter is not on the payroll of the CPA firm but rather is compensated by the outsourced accounting firm.
2. Onshore vs. Offshore: The second distinction between the two models is the use of onshore versus offshore. Virtual accounting enables accountants to work remotely while remaining in the same city or country as the company. However, when you use outsourced accounting services, your accountant or team may be based overseas and work in a fulfilment centre.
3. Training: When accountants work virtually, it is the responsibility of the company to properly train their accountants. Outsourced accounting, on the other hand, places all of this responsibility on the shoulders of the outsourcing company.
4. Technology: As previously stated, "virtual accounting" can only refer to a virtual accountant employed by a CPA firm. As a result, if a company struggles to integrate cutting-edge technology into its processes, virtual accounting will do little to help. On the contrary, outsourced accounting services can assist businesses in rapidly expanding. We provide professionals with extensive knowledge and experience in cutting-edge technologies.
5. Expertise: Unless in-house professionals are upskilled and trained on the new processes and laws, they may not gain any additional expertise. However, even after doing so, your company may incur additional costs. While outsourcing accounting services ensures that the work is done by experts who pay close attention to detail, you can actually transfer the more complex accounts to them and be confident that they will be completed on time. Accounting outsourcing firms benefit from the timely training of their professionals.
6. Infrastructure: Working through virtual accountants, it becomes the firm's responsibility to manage and provide them with the infrastructure and also pay them the cost of maintaining the given entitlements. On the other hand, the infrastructure is managed by the outsourcing firms, who take care of the maintenance, employees, and everything related.
To sum up, virtual accounting can be a great help to CPA firms, but when it comes to growth and scalability, it is the outsourced accounting firms that can take care of it. There are numerous benefits to outsourcing services, and we cannot ignore how beneficial it is for both small and large businesses. When you outsource your needs to a reputable outsourcing company, you get guarantees of quality, expertise, and end-to-end security. CPAs can easily drive significant cost savings, survive ever-increasing competition, and scale effectively by partnering with the right firm.
Stanfox is a leading accounting business process outsourcing firm that provides custom-made accounting solutions to growth-driven CPA firms. Stanfox specialises in a wide range of accounting functions, with a team of professional accountants dedicated to making accounting concerns a seamless process for CPAs. We are proud to be one of the fastest-growing accounting outsourcing firms in West India.
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