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Are Offshore Accountants Superior to Domestic Ones?

 

Written By David Landau

All businesses can benefit from having a good accountant. More than just helping manage the books, a good accountant can mean the difference between success and failure. In 2023 alone it was found that 82% of businesses had closed down due to cash flow problems.1 Having an employee who always has their finger on the pulse of a business’s finances can go a long way to ensuring its long-term survival and an accountant can be that employee. 

Today, qualified accountants are in short supply, and should a business find one, they will come at a premium in North America. Offshore accountants provide businesses with countless opportunities, and for several reasons compare well to domestic ones.

 By using an offshore accountant, a business can –

  • Reduce expenses and improve cash flow
  • Find a skilled professional to “captain” the finances
  • Benefit from the standardization of global accounting practices

 

Great Accountants Make an Impact

A skilled accountant is a game-changer for any business. Beyond managing finances and ensuring compliance with regulatory requirements, they significantly minimize tax liabilities. Accountants expertly handle bookkeeping, prepare financial statements and tax returns, manage accounts payable and receivable, and process payroll. Partnering with an accountant frees businesses to focus on growth, innovation, and strategic planning, transforming financial management from a burden into a powerful tool for success.

Accountants today have even begun to go beyond just their traditional roles. A skilled accountant can act as a business’s guiding hand, performing revenue forecasting, and engaging in active financial stewardship. An accountant can help a business maximize revenues, minimize expenses, and make the best decisions for both short and long-term financial success.

 

No Accountants in North America

Unfortunately, accountants can be hard to come by. More than 300,000 accountants quit their jobs between 2019 and 2021, and colleges have seen a steady decrease in enrollment in accounting majors since 2017. Accounting firms have found themselves facing staff shortages and struggling to keep up. Firms have been forced to turn away work and clients. In 2023, nearly 50% of businesses were unable to work with the accountant of their choice.2

Despite the lack of qualified accounting professionals within the United States, the rest of the world remains quite unaffected. The United States has approximately 665,000 certified public accountants, but the Philippines has approximately 200,000 CPAs in spite of having a population of only 115 million people, and Mexico has an incredible 450,000 CPAs to a population of 127 million people. 3 This surplus of accounting professionals means that US businesses now have access to a large pool of qualified candidates.

Accountants may be difficult to find in the United States, but they are abundant overseas, and many are looking for employment by American businesses.

 

Why Use an Offshore Accountant?

A business can find a qualified accountant in the United States, but they are difficult to find and come at a premium. By using an offshore accountant, any business can –

Reduce its expenses

All businesses want to cut costs and get more return on their investments. In spite of all of their benefits, accountants are expensive. By using an offshore accountant, businesses have an unprecedented opportunity to reduce their expenses while still reaping the rewards of great financial practices.

*All values are approximate

By making the switch to an offshore accountant, a business can potentially cut labor expenses by well over 75%. Such a reduction in expenses frees up a business to reinvest its savings into other priorities, potentially further cutting costs and even increasing revenues in the process.

More than just cutting costs though, switching to an offshore accountant can give a business unprecedented scalability. For the price of one US accountant, a business can hire two or even three offshore ones. What can’t be done by one accountant can be done by two or even three for less.

Using an offshore accountant enables a business to reduce expenses and maximize its investment more effectively than it ever could with a US-based accountant.

 

Find a skilled professional

Businesses considering making the switch to offshore labor are often concerned about the quality of candidates they may find overseas. When searching for a qualified accounting professional, this concern is only magnified. Different accounting standards and different education standards can be tough for many businesses to translate. Fortunately, businesses need not worry; a qualified accountant who understands their local accounting standards can now be found anywhere in the world.

Every business knows that different countries and states practice different accounting standards. What works in the Philippines may not work in the United States, and what works in California may not work in Texas. But no matter how different accounting standards around the world may appear, numbers are numbers. No matter where in the world someone goes, “1” will always be “1”. Any accountant anywhere in the world can understand a business’s financial figures and provide them with all of the benefits of a domestic accountant.

More than just understanding local accounting standards, offshore accountants are just as well educated as domestic ones. Most accounting education programs fall under the regulations put forward by the International Federation of Accountants (IFAC). 130 countries educate their accountants to IFAC standards, including the United States, the Philippines, India, and Mexico. Such universal standards in education mean that an accountant educated in any one of these 130 countries is more than qualified to help a business in the United States.4

The growth of remote work technologies today is only increasing the universality of accounting education and the pool of qualified accountants with it. Workers around the world are not only more capable of working with US-based businesses than ever before but are also endeavoring to make themselves more attractive to US-based businesses. Accountants in the Philippines or India will often pursue an education in the United States or take specialized courses in their home countries to gain an understanding of US accounting standards.

Any concerns that a business may have about the quality of a prospective offshore accountant can also be set aside by using a reputable employment agency specializing in offshore labor. Employment agencies are more than capable of understanding the quality of education that an offshore candidate has received, and can rigorously test candidates to weed out the most qualified ones.

Any business can easily find an accountant overseas who is just as qualified as a domestic one and for far less.

 

Benefit from different accounting standards

Using an offshore accountant becomes even more attractive when considering the rise of the International Financial Reporting Standards (IFRS). As of 2022, the IFRS has been adopted to some extent by approximately 120 countries around the world, and fully adopted by 90.

Adopting the IFRS offers a business countless opportunities including –

  • Global Recognition: By using IFRS, a business can share its financial data with potential clients across the world, facilitating international business transactions and creating global opportunities.
  • Access to Capital: IFRS-compliant financial statements attract global investors. Their universality makes them easy to share with potential business partners and investors no matter where they are in the world. 
  • Streamlined Reporting: The uniformity of IFRS significantly reduces accounting costs and helps simplify the preparation of financial statements. For multinational businesses or those with international clients or partners, such uniformity is a game changer.

 

IFRS offers businesses a global reach they may once have never had.  While many US-based accountants are familiar with IFRS, an accountant trained in a country that uses IFRS more extensively can make the switch far easier for a business.

 

Offshore Labor Offers Far More Than Just Accountants

Accountants are just the tip of the iceberg of professionals that a business can get by using offshore labor. Businesses can find personnel specializing in bookkeeping and data entry and analysis. Businesses can get financial experts, virtual assistants, marketing professionals, and tech support. A business can use offshore labor to get an accountant and their entire support staff and so much more all for significantly less than their domestic counterparts.

 

What Does This All Mean?

An accountant can benefit any business. Unfortunately, in the United States, accountants have come into short supply, and in spite of all of the benefits they can provide, they come with a premium price tag.

Leveraging an offshore accountant can offer businesses a superior alternative to domestic options. For North American companies that value strong financial practices, it’s crucial to explore international talent. Failing to do so risks falling behind competitors who are already capitalizing on this advantage.

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