6 Disadvantages of Outsourcing Accounting Services for Your Firm


Whether it be for cost savings, scalability concerns, or internal fraud risk reduction, outsourcing accounting services has proven to work for myriad firms and industries at the global scale. But with its benefits also come drawbacks that need more than a look see.

If you consider offshore accounting a viable option for your business, then you would need to understand its intricacies, especially the most common concerns and issues that come with it. And as you explore, you’ll also probably come across misconceptions that need to be debunked.

This blog offers practical workarounds to help your business thrive and break the limitations of outsourcing in accounting, as well as to clear up any misconstrued concepts in outsourced accounting services.

What are the Common Disadvantages of Outsourcing for Accounting Firms?

Without any proper research, rendering outsourced accounting services will all but fail to meet your expectations. But with the help of our thematic and research-backed approach, here are the top 6 Cs you should look out for when it comes to outsourcing accounting services.
what are the limitations of outsourcing in accounting

1. Concerns Regarding Quality

Having no in-house accounting team could mean relinquishing some level of control over your day-to-day accounting operations. But without ample quality control, getting outsourced accounting services could also lead to account mismanagement – haphazardly checked calculations and even excessive spending that could eventually hurt your business as your overlooked expenses snowball. So, with that said, rendering accounting staffing services must succeed a meticulous – or better yet, protocolized – selection process.

2. Cultural Barriers

Misinterpretations can be costly – the wrong understanding of important instructions could mean significant business losses for you. Moreover, if your outsourced accountants aren’t native English speakers, then some of your established accounting standards and protocols may not be understood and honored too. Not to mention the time zone disparities that delay, shorten, and overall compromise the quality of your communication with your offshore team, which especially happens when we fail to designate the right schedule for our teams.

3. Cost-Related Issues

Hidden charges, unanticipated expenses, and currency conversion miscalculations all but make for a disappointing – or even traumatic – experience dealing with outsourced accounting staff. In fact, there might even arise some trust-related issues regarding financial handling, especially if there’s little to no room for law-protected financial regulations implemented for the offshore team to abide by.

4. Challenges on IT Security and Compatibility

With occurrences of security breaches becoming more commonplace by the day, your personal information and financial data are at a huge risk of getting hacked when placed in the wrong hands. And while an outsourced team with a good track record is ideal, this could sometimes be overlooked after a convincing pitch, sans any mentions of questionable past records.

And there’s also the problem of incompatibility among both existing and incoming technology systems, which could significantly hamper your business operations.

5. Compliance Issues

Contracts with ambiguous and unclear terms and conditions – or simply having no contract at all – is a recipe for a potentially chaotic role reversal with your outsourced accountants. You might end up bending over to your team’s demands instead of the other way around. This issue of noncompliance can largely be attributed to the lack of protocolization among offshore workers.

6. Consequences of Overdependence

Lastly, there is also the issue of overdependence on your accounting staffing services, which can also harm your accounting operations – issues with the amount of time and tasks for your outsourced team could arise as well. If one of your staff files for maternity leave, your operations might be put to an indefinite halt. Moreover, the number of turnover decisions in your outsourced team could increase, especially if the aforesaid compliance issues are also in the mix.

Misconceptions Surrounding Outsourced Accounting Services

If you notice, most problems only occur under certain conditions – specifically, those when the people involved fail to plan and calculate. And while there are legitimate limitations of outsourcing that need strategic workarounds, there are also widespread misconceptions about it that need to be addressed and corrected.

1. Cost-Effectiveness is the Best Possible Reason for Outsourcing
To drive business growth, securing an elite pool of accounting talents that’s aligned to your company’s goals and values is key – be they an in-house or an offshore team. And while cost-cutting is rational when it comes to your business operations, top talent knows no nationality or territory. To put it simply: if you find gold, you find gold.

2. Outsourcing is Only for Short-Term Projects
The truth of the matter is that high-impact and long-term projects don’t require in-house teams – they require driven, digitally adept, innovation-oriented, and quick-thinking brains. Top-quality outsourced teams are determined, goal-oriented, and willing to align your vision with theirs. They honor and respect the mission, values, and ethos of your accounting firm, while still being able to bring fresh ideas to the table.

3. Security Risks are Inevitable When Outsourcing
Whether cloud, blockchain, or any other type of data storage, there will arise certain security risks especially when it comes to client-owned data. This is where tapping reputable companies come in – those who honor legal regulations, observe stringent cybersecurity standards, and possess a proven track record of high employee morale through awards and certifications, like this one.

So, Is It Worth Hiring Outsourced Accountants?

should you get offshore accountants despite outsourcing disadvantages

Figuring out the outsourcing process (and how to get it to work to your firm’s advantage) can be quite a puzzle. The options in the market seem to be endless – from freelancers with high accounting expertise all the way to overseas firms offering business solutions packages that promise unbridled profitability.

What truly matters at the end of the day is the quality of your experience with outsourced accountants, which largely depends on the kind of global team you tap. And while this boils down to the level of research you should do, your business most likely takes up all the time you have.

It can be quite confusing and even tedious when it comes to deciding on which firm or agent to work with, especially since there’s the difficulty that comes with background checking, quality control, and hidden cost concerns, among other possible problems.

This is where TOA Global comes in.

How TOA Global Addresses the Challenges of Outsourcing

Considering the issues mentioned above regarding outsourced accounting services, TOA Global addresses these as discussed below:

Guaranteed Top-Quality Accounting Work

TOA Global is partnered with Ab2 Institute of Accounting, which offers courses on accounting that are catered to the level of mastery in accounting required by your firm. With over 4,000 enrolled students and 1,000 firms operating in 4 countries, Ab2 Institute of Accounting prides itself on producing accounting staff with global competence.

Some courses include tax training, software and management courses, and other crucial courses on accounting. With TOA Global, account mismanagement risks are significantly reduced or even eliminated, thanks to our elite team of accounting professionals.

No Struggle with Cultural Barriers

One of the best non-native English speakers who are heavily influenced by the West, Philippines-based accounting professionals break any cultural barriers that you might be worrying about. With morning shift employees for Australia and New Zealand-based clients and night shift teams for North American clients, there are no time disparities that could get in the way of a thorough and systematic communication with your offshore team

Slashed (and Straightforward) Cost

One of the best non-native English speakers who are heavily influenced by the West, Philippines-based accounting professionals break any cultural barriers that you might be worrying about. With morning shift employees for Australia and New Zealand-based clients and night shift teams for North American clients, there are no time disparities that could get in the way of a thorough and systematic communication with your offshore team