Here are the do’s and don’ts, tips and tricks of walking an accounting practice through the transition to offshore accounting. If I can do it, so can you! In a nutshell, in just three years, my practice has seen a 312.5 percent increase in gross sales.
To overcome this fear of implementing an offshore team, you need to look at four main categories:
- Growth goals
- Choosing an offshore team
- Cost and sales
- Trust - client data security and client notification
Let’s begin with growth goals. My endgame is to reach $1 million in recurring revenue in 20 years. What is your endgame? How big do you want to get? And by what year? Write this down and divide your sales goal by the number of years you can give yourself to attain it. Lack of scalability is a deterrent in reaching your endgame.
You need to prepare your streamlined scalability processes. Simplified onboarding for employees and clients as well as democratizing client workloads are musts to prepare for scaling with an offshore team.
What can you expect to be removed from your plate? A wealth of knowledge at your fingertips will unburden you from having to train. An offshore team will be expected to know the programs you work on. You won’t need to teach the team how to use QuickBooks Online or QuickBooks Desktop. The offshore team will do their own hiring, so you don’t have to. You will be able to focus on sales, client onboarding and retention. You can allow the offshore team to do the back-end accounting while you can hire for front-end support. Hire an administrative assistant and remove non-accounting, collections, firm billing and the internal operations from your to do list.
So now that you are sold, you need to Take The Plunge. How do you choose the right offshore team? Here are some simple litmus tests: Does the offshore team have a client portal for your clients to use? Is the client portal included in the team’s price? Do you need to implement the team’s workflows? Or is the team willing to adopt your workflows? What level of interface do you want the offshore team to have with your clients? As an FYI, the more interface the team can bring to the table, the quicker you will be able to scale.
As another FYI, this process is no harder than hiring a good employee and building an exceptional streamlined working environment. It is simply that you are hiring multiple employees at the same time, so you only have to go through the hiring procedure once. That said, what are the potential roadblocks? How long have their employees been at their company? Make sure you get a team that will not change. Who is the team lead you will be assigned? What is the level of the lead’s accounting knowledge? How long has this company been around?
If the team’s company is older than yours, you can be sure the company has better systems in place which you may want to adopt. How many accounting general ledger apps is the team familiar with? How many app certifications does the team have? With the compound knowledge the team should bring to the table, you should feel confident taking on otherwise unattainable projects that you can now pitch with backing from your team. And to come around full circle to your end-game, how scalable is the offshore team’s practice? If you are going to take on clients as fast as your scalability plan dictates, will this team be able to keep up? The team cannot push current clients aside to accommodate the new, shiny ones!
One of the true considerations of going offshore is the ease of offboarding if necessary. Make sure your offshore team does not ask for an accountant user access directly from each client’s file, since this is not easy to undo! Stick to adding your new offshore team as team members in your QuickBooks Online Accountant portal. You can add all the team members that need access or they can share a user via a password vault. Safe surely is never sorry.
The white elephant in the offshore environment is client data security. Do the offshore company’s employees come to a central office? Do they use firm-issued computers? What is their password vault and how is it used? What are the company’s cyber security credentials? Before this endeavor, having a SOC1 or SOC2 security attainment did not mean a lot, but with extensive research on the importance and difficulty to attain these credentials, knowing your offshore team has one or the other is paramount. Additionally, what level of cyber security is your firm willing to achieve? You should add a WISP (Wireless ISP) to your firm’s internal processes. (You can read more about these credentials by clicking the links.) And most importantly, does the company make it a practice to use a U.S.-based servicer for all client communications and work? You will know when a U.S.-based server is not used, since clients will receive notifications and proceed to inundate you with hacking notifications from their financial institutions, which will freak you and them out!
Each time you add a new offshore employee or set up a new computer, you will have to re-credential. This is truly one of the most painful parts of the process, especially while trying to coordinate the time difference. You will need a phone that can accept SMS short code texts, not a text-only number. Additionally, a shared firm email for security verifications is helpful.
If you have not chosen a client portal yet, one of your first considerations in choosing an offshore team should be whether the team’s company includes its client portal in its fees. This is a large savings, as the cost of additional subscriptions seems never-ending. For small clients, QuickBooks Online now includes a lot of technology like the new receipts and bill features. In the final phase of onboarding your offshore team, you will need to prepare your rollout to your clients with an email introduction and training video. Aboveboard is best, but it does not have to be blatant. Add the team members as staff to your website.
“Low-budget” app stacks include: Keeper Security, Method:CRM, Client Hub, Gusto, Slack, AutoEntry and Melio. In the end, what app stack will work for your workflow and your budget? And speaking of budget, this team cannot bill your firm hourly. If you have converted to flat-fee pricing, the team has to commit to the same revenue model. You can do this with an annual agreed revenue split.
To come again around back full circle, you will only be able to manage so many clients before you will need to hire an additional client liaison. So at some point, you will need to grow your internal staff to handle the increasing practice size. The nice part of having a seasoned offshore team is its ability to train the new in-house staff on the app stack and workflows already in place.
Trust is the final deciding factor. Simply stated, do you feel you can trust your new team? Do you feel the team’s dedication and commitment to your clients? If you feel comfortable, your clients will too!
A year ago, I was going to many sessions on how to grow and scale. The lady across from me at a roundtable discussion was about to fire her key employee. She did not know what she was going to do, since she was in uber-growth mode. The fellow next to me was the owner of an outsourced accounting firm in India. He helped accounting firms remotely. Watching the fellow listen to the lady across from me after his introduction was amusing. I chuckled and said to the gal, “Well, here is your solution!” I think she took his card just to be polite, but I don’t think she would have called him to take action after the conference. And I was wondering why not? This made me want to shout, “Lady, jump offshore!! This solution could save your practice.” Or at least put her in a good position to feel comfortable getting rid of her key employee.