For CPA firms, tax preparation services form a significant portion of their income, and when you consider how many people must file tax returns every year, it’s perhaps little wonder. But, as profitable as this service may be, with so many US taxpayers needing to file returns at the same time, it can prove to be a huge burden for CPA firms.
Fortunately, there are plenty of options for outsourcing this particular service nowadays, and accounting firms are spoilt for choice when it comes to third party vendors with the skills and resources to help them out at busy times of the year. Outsourcing tax return preparation to India, for example, is a particularly effective solution for overburdened accountants and bookkeepers. However, there are some misconceptions about this particular service that are preventing some professionals from being able to reap its rewards.
To help you understand just how effective outsourcing tax preparation to India can be, here are 6 untruths that are absolutely not to be believed:
1. The sharing of data isn’t safe
While it is true that sharing data with third parties online can be risky, provided you and your chosen outsourced tax service share data safely between servers, the threat can be mitigated.
With the use of private cloud servers instead of public servers, sensitive data can be kept secure when shared between parties.
2. You’ll be charged more
The great thing about outsourced tax preparation services, is that they only ever charge you for the work you ask them to carry out. Unlike a full-time employee who must be paid the same irrespective of their workload (not to mention their benefits such as health insurance and sick pay), third party service actually enable CPA firms to save money.
3. It’s against the law
It is absolutely true that you should gain consent from your clients before outsourcing any of their tax requirements, but provided you do, there is absolutely nothing unethically or legally wrong with it.
4. Their tax professionals aren’t as highly qualified
There are plenty of experienced and qualified tax professionals in India, many of whom have been trained to the very highest accounting standards and who understand US tax laws fully. By choosing the right third party provider, both you and your clients can benefit from their expertise.
5. Technical capabilities are lacking
India has well and truly put itself on the map when it comes to IT, and from some of the fastest internet connections in the world, to the latest advances in technology and software, India has everything and more when it comes to technical capabilities.
6. Times zones present an issue
The reality is that rather than the difference in time zones becoming a hindrance, it is in fact, a blessing in disguise. For example, if you’re a CPA firm based in the U.S., you can assign work to an Indian outsourced tax preparation provider at the end of the working day, and have it completed for you by the morning; something which can be especially beneficial during busy periods, such as tax season.
Outsourcing tax preparation to a country like India has so many advantages, that it’s little surprise more and more U.S. based accounting and bookkeeping firms are using their services. And, if you want to offer your clients an enhanced level of service, reduce you and your employees workload, save money, and improve the quality of your work overall, don’t believe the untruths above, and try putting your trust in an experienced overseas outsourced tax prep provider.