Tax Preparation Outsourcing: What to Outsource and What to Retain

According to recent statistics, 78% of firms worldwide are satisfied with their outsourcing service providers, and trustworthiness is still one of the top criteria when selecting an outsourcing partner. One obvious advantage of outsourcing tax preparation is that it simplifies data collection. While most accountants are overburdened during the inevitable, busy tax season, staying on top of data collecting for a smooth tax filing process can take time and effort. Outsourcing makes it easier to contact someone when concerns arise, but data gathering, organization, and sorting are also expedited so that risks are minimized, and deadlines are fulfilled. However, not every CPA business that decides to outsource knows about all the benefits of outsourced tax preparation services. The more revenue, inventory, or fixed assets you have – the more complicated your taxes get.

Regardless of your challenges–whether you are understaffed, your team needs more skills and competence, or you are overloaded during tax season–outsourced tax preparation can help you expand your service portfolio. Outsourced tax preparation services have the advantage of faster turnaround times due to time zone differences when working with corporations headquartered in countries such as India. It assists in resolving personnel concerns, and your organization does not have to reject away profitable employment during tax season.

A Ultimate Guide to Tax Preparation Outsourcing for CPA Companies

These hourly prices may also differ based on seniority within the outsourced personnel. This strategy is popular since it provides a dedicated staff to work for you for a set amount of time. As indirect taxes become a leading revenue stream for governments worldwide, navigating the wealth of complex and country-specific tax regulations is more challenging than ever for companies that compete on the global stage.

You can interview and hire suitable candidates from the top outsourced tax preparation service providers. Did you know that outsourcing tax preparation services might save you up to 50% on operational costs? Accounting businesses increasingly turn to outsourced tax preparation services to cut costs and focus on more profitable tasks. Tax preparation services are the most in-demand outsourcing services among CPA companies in the United States. Top accounting firms in the United States outsource tax preparation to reputable outsourcing service providers who set up cutting-edge communication, infrastructure, and processes to ensure minimal friction.

How tax preparation outsourcing services can improve the finance function

Measuring the benefits and development of your firm’s outsourcing strategy and assessing the risks can assist you in taking remedial action at the right moment if staffing expectations are not realized. Let’s explore the scope of tax return outsourcing for accounting firms in the USA and understand the service in detail. Tax season remains one of the busiest times of the year, with accountants scrambling to fulfill tight deadlines while maintaining client confidentiality. Assume you have not explored tax preparation outsourcing before the forthcoming tax season. In that instance, you risk missing out and taking on extra labor you no longer require.

Outsourcing your organization’s tax preparation will give you more time to focus on expansion and innovation and explore new specialized service offerings that will give your firm a competitive advantage. Finally, establish a service-level agreement outlining the foundation for the outsourcing collaboration and begin onboarding the offshore tax preparers to your team. Statistics show that the United States government collected $4.05 trillion in revenue from taxes in 2021 in 2021. This demonstrates the vast market and opportunity that awaits CPAs and accounting companies. Accountants are constantly moving, from keeping up with new tax legislation and engaging with clients to preparing the requisite papers and reams of data.

Step 3: Select a Preferred Engagement Model

This widely held misperception regarding outsourced tax preparation services stops CPA companies from realizing some significant benefits. Companies that provide outsourcing services will only charge you for the services they supply, and you will save up to 50% or more on operational expenditures. However, as with any other alternative, you should research before collaborating with a third-party service provider.

Outsourced tax preparation services offer several benefits, such as cost savings, security, faster response times, and cutting-edge infrastructure. However, some myths about tax outsourcing services keep accounting businesses from enjoying such benefits. At a fixed monthly price, you will be provided with a dedicated staff to serve as an extension of your team under this popular engagement model. The fixed sum will be billed to the CPA firm at the end of each month, and the number of hours to be done during that period will be scoped by the outsourced service provider. If your accounting firm has a huge volume of work, this is a more cost-effective strategy than hourly rates. This is one of the most popular engagement models, and it entails paying based on how much you use the services.

Creating A Tax Return Outsourcing Strategy

Creating an additional to-do list focused solely on indirect tax activities can also make sense when managing multiple filings. Continuously monitoring tasks and timelines enhances visibility and information flow, improving ownership and accountability for each process. The task manager also increases enforcement of best practices and internal controls, methodically organizing people and their tasks to ensure on-time completion. They further help companies navigate the complex collection of withholding taxes for most transactions, from regular payments to credit sales. Automatically updating new tax rates into the system ensures vendor and client invoices are posted correctly.

When selecting an outsourced service provider, data security is a vital factor to consider. Working with an outsourcing service provider that adheres to ISO requirements and employs robust and secure information technology solutions is preferable. This is not the case if you select an outsourcing partner who has stringent data security procedures in place and employs sturdy and secure information technology systems. The top outsourcing service providers will be cyber essential, ISO certified, and information security compliant. Tax preparation outsourcing can provide CPA companies with a significant competitive edge.

Tight Data Security Measures

Our US Tax team is proficient on all major tax software such as Intuit Pro-Series, CCH, Drake, Intuit Lacerte, Turbo Tax, ATX, Ultra Tax and many more. Ensure accurate records and quality control by maintaining excel bookkeeping and bookkeeping services a history of all communications for every open and closed job. Taxfyle is powered by Tax Professionals across the U.S. capable of preparing the simplest to the most complex returns — all at unbeatable prices.

• It can also support the filing of indirect taxes, including local real estate, and sales taxes in the U.S.
• Your in-house staff can focus on higher-value advising services while professional offshore tax preparers handle preparation and first-level reviews.
• You can contact QX Accounting Services by filling up the form on this page, or just calling us, or sending in an email.
• Although it is not a new concept, many people still need to learn about the numerous advantages of tax preparation outsourcing.

Automating these routine, cumbersome tasks can transform the way tax teams operate, freeing up human staff to focus on higher-value work. Even better, robots eliminate the potential for human error – a critical advantage for tax filings. The task manager’s month-end close list should include all indirect tax activities and deliverables.

Daniel E. Greene, CPA Firm Achieves $99,000 Cost Savings with QXAS Outsourcing

For instance, Value-Added Tax (VAT) – the most popular form of indirect tax – now raises about 20% of tax revenues globally. VAT is levied on consumers of goods and services throughout the supply chain, rather than companies selling them. You can contact QX Accounting Services by filling up the form on this page, or just calling us, or sending in an email. Our managers will get in touch, discuss your tax preparation requirements in detail, and explain the process. You will also get a clear idea of the process by going through our migration process.

• Tax preparation, in addition to consuming a significant amount of time and effort, causes considerable burnout in accountants and has a negative impact on their mental health.
• Outsourcing makes it easier to contact someone when concerns arise, but data gathering, organization, and sorting are also expedited so that risks are minimized, and deadlines are fulfilled.
• Creating an additional to-do list focused solely on indirect tax activities can also make sense when managing multiple filings.
• Statistics show that the United States government collected $4.05 trillion in revenue from taxes in 2021 in 2021.

The primary purpose of tax preparation outsourcing is to complete the assignment on time without sacrificing quality. Outsourcing provides you with the benefit of receiving high-quality work from educated and experienced people while assuring compliance and data protection. All the outsourced tax preparers have varying degrees of experience as per the client’s need.