Outsource CPA Services: Everything You Need to Know Before You Start

If you’ve made the decision to outsource CPA service work, you may be wondering what’s next. For business owners and financial leaders looking to offload their CPA needs, outsourcing accounting services can be a cost-effective and scalable solution.

In this article, we’ll explore everything you need to know about outsourcing CPA work, including the tasks your external accounting firm can take on, the advantages, and how to find the right outsourced CPA provider.

What is CPA Outsourcing?

CPA outsourcing is the process of hiring an external accounting firm instead of hiring in-house talent. Outsourced CPAs provide all of the same services as an in-house employee, such as payroll processing, financial reporting, and tax preparation. In some instances, outsourced accounting firms can expand their service coverage to include assurance services, like reviews and audits.

It’s important to note the difference between an outsourced bookkeeper and an outsourced CPA. Bookkeepers are not considered CPAs, but CPAs can be considered bookkeepers. A bookkeeper has basic knowledge of accounting transaction management and can handle a majority of the back office work in your accounting department.

CPAs take these services a step further, providing interpretation of your financial information, financial statement preparation, assurance services, and tax filings. When business owners need a CPA, they are often looking for services that exceed the basic capabilities of a bookkeeper.

What Does an Outsourced CPA Do?

Outsourced CPA services can cover everything from basic bookkeeping to CFO-level services. Let’s explore some of the main roles and responsibilities of offshore CPA services:

Outsourcing CPA solutions offers comprehensive back office support, whether that be assistance in preparing accurate financial statements or general management of your business’s financial information.

Why More Businesses Are Choosing to Outsource CPA Service Functions

Making the decision to outsource CPA solutions can be easy for some business owners, especially when looking at the advantages. Here is why more businesses are choosing to outsource CPA service support:

Lower Overhead

 When you work with an external accounting firm, you won’t have to worry about offering competitive salaries and benefits. Instead, you can unlock cost savings from removing employer payroll taxes and hiring and training expenses.

Scalability Through Outsourced CPA Service

Outsourcing CPA work is generally a long-term partnership. When partnering with an outsourced accounting team, you don’t have to worry about constant turnover. You can leverage scalability and easily onboard more team members as your business grows. You only pay for what you need.

Expanded CPA Expertise When You Outsource

Outsourced accounting firms often have multiple team members, each of whom brings unique expertise and experience to the table. Your small business can leverage these insights at a fraction of the cost compared to hiring a full in-house team.

Technology Access

Accounting tools can be expensive, from tax filing software to payroll processing apps or fixed asset databases. By outsourcing accounting services, you can leverage these tools without making the investment yourself.

Reduced Fraud

Outsourced CPA providers are held to high professional standards, one of which is independence. By serving as an independent third-party with no financial interest in your business, you can reduce fraud and asset misappropriation.

Improved Compliance with an Outsourced CPA Service

Your outsourced accounting team can tackle compliance on your behalf, ensuring you are meeting all relevant deadlines and filings.

Assurance Services

Outsourced CPA firms provide more than just accounts payable and accounts receivable support. In fact, they can issue formal financial statements that lenders, investors, and business owners rely on.

CFO Services

Whether you need an interim CFO or a long-term partnership, one of the top outsourcing CPA solutions is CFO services. Having a strong tone at the top can help your business reach its strategic growth and financial goals.

The benefits listed here are just the beginning when business owners outsource CPA services. Discover 3 unexpected accounting outsourcing benefits that might surprise you.

How to Hire an Outsourced CPA Service Provider

Looking for a reliable CPA provider to manage your accounting function is an important decision. You want to be sure the professional or firm you choose is the right fit for your business. Here are the steps needed to outsource CPA services:

1. Define Your Needs

   The first step to hiring an outsourced CPA provider is to understand your specific needs. First, confirm that you need an outsourced CPA and not a bookkeeper. CPAs often charge higher rates because of their expertise. If you don’t plan on using the exclusive services they can offer, you may realize more cost savings by onboarding an outsourced bookkeeper.

   It can be helpful to make a list of your objectives and strategic goals. For example, if your goals are to improve tax compliance or grow your business, what services do you need from a CPA to accomplish those goals? Is it real-time financial reporting? How about consulting services to help you make informed decisions? Defining your needs will help you select the right outsourcing CPA solutions.

2. Interview Prospective CPAs

   Next, it’s time to interview prospective CPAs. If you are choosing virtual CPA services, you likely will not meet in person. Instead, you may have a video call. Here’s what to inquire about:

   • Services Offered

     One of the most important inquiries is the services the CPA offers. The outsourced CPA should offer all of the services your business needs, such as consulting, tax preparation, or financial statement generation. It can be helpful to partner with an outsourced CPA firm if you are looking for a range of services.

   • Cost

      The cost of your CPA is another essential consideration. Do they charge by the hour or by the project? For example, it’s not uncommon for CPA firms to give you a fixed price for certain services, like preparing a tax return. Other ongoing services, like CFO services or monthly work, will likely be on an hourly basis. Be sure you know the expected costs upfront and the tentative payment method, such as credit card or ETF.

   • Certifications

     Your CPA should have the necessary credentials, including a valid CPA license. You can verify the status of CPA licenses online. Other credentials can also be helpful, such as a bookkeeping certification or CFA designation. Remember, if you offshore CPA services, there may be differing license requirements. Be sure these requirements are satisfactory to fit your needs.

   • Technology

     What technology does your prospective outsourced firm offer? Do they pass these costs on to you or provide them as a perk of working with them? Think of all of the different software programs, like forecasting software or a fixed asset database. Similarly, be sure that your CPA can work in your accounting software, whether that be through cloud-based access or a remote desktop connection.

   • Past Reviews

     Past reviews are an important component to consider. What have other business owners said about the prospective CPA? Did they have a good experience or have some negative thoughts? Past reviews give you an insider’s access to the quality of service you will be receiving.

3. Select the CPA Service You Want to Outsource

   Once you’ve found a provider that checks all your boxes, it’s time to get to work. Most CPA firms should need little to no onboarding services. Instead, they will jump right in. However, it is important to define your expectations and goals beforehand. For example, if you need monthly reports by the 7th of each month, make that clear. The more clear and upfront you can be with your goals and expectations, the higher the likelihood of a successful partnership.

4. Review and Adjust

   As you begin to outsource CPA service tasks, you may come across other items that you can delegate. While you don’t want to overwhelm your outsourced CPA right away, make a list of these tasks and talk to your CPA about taking on more responsibility. An outsourced CPA firm should have the capabilities to bring on additional team members.

Finding the right provider is the most critical step in this process. For a deeper look at what separates a good partner from a great one, read our guide on the top five things to look for in an outsourcing partner.

Summary

Making the decision to outsource CPA service expertise can help your business scale, reduce costs, and maintain an efficient accounting function. Take the time to find the right provider to build a lasting, long-term relationship.

At Personiv, we specialize in building dedicated teams of financial experts to provide the scalable CPA support your business needs to thrive. From ensuring tax compliance to delivering strategic CFO services, we act as a true extension of your team. If you’re ready to see how a custom partnership can help you achieve your financial goals, our team is here to help.