How Much Do Offshore Accounting Services Cost?

In the changing accounting industry, more CPA firms and enterprises are turning to offshore accounting services to streamline their operations, lower costs, and access global talent. But before making this shift, it’s vital to understand the true cost of offshore accounting services, what you’ll actually pay, how pricing works, what factors affect fees, and the real return on your investment.

What Are Offshore Accounting Services?

Offshore accounting services require the use of professionals who live in some other, usually less expensive, country and do bookkeeping and accounting for your business. Providers usually include:

• Bookkeeping and upkeep of general ledger
• Processing of payroll
• Preparation and filing of taxes
• Account payable/receivable upkeep
• Financial analysis and report
• Audit assistance

These providers handle the services remotely using secure cloud-based software, usually providing you with access to around-the-clock service and considerable cost savings.

Average Offshore Accounting Services Cost

Below is an average cost of offshore accounting services in different countries and packages:

1. Hourly Fees

• General bookkeeping: $8-$30/hour (India, Philippines, Eastern Europe)
• Financial analysis or tax preparation: $30-$75/hour
• Advanced advisory or controller-level service: $50-$100+ per hour

To put this in perspective, U.S. hourly rates for accounting are actually reasonable at $100-$500 for the same quality of work.

2. Packages Monthly or Annually

• Junior-level bookkeeper: $500-$2,500 per month ($18,000-$28,000 per year)
• Senior accountant: $2,000-$4,000 per month ($24,000-$48,000 per year)
• Full-service accounting (SMBs): $1,000-$10,000+ monthly, depth and level of service negotiable.

3. Project-based or fixed-fee

• Preparation of tax returns: $500-$5,000+ a year
• Processing payroll: $20-$100/month/employee
• High-end consulting and CFO-type and full-service advisory projects: $7,800-$16,800 per year.

4. Percentage of revenue

• Average companies pay 0.5% to 1.5% annually revenue for outsourced accounting and more for small businesses or special needs.

5. Savings Potential

• 40% to 70% less than what most businesses pay for someone to work in-house, sometimes more for high-overhead niches or specialties.

Pricing Plans: How Offshore Accounting Firms Charge

Offshore accounting companies can make use of different price schemes to meet diverse business requirements:

• Hourly rate: For infrequent or intermittent use; bill only for months utilized.
• Month retainer: Infrequent periodic work for set monthly fee. Simple, easy budgeting.
• By project: One-time flat fee per individual project (e.g., help with tax return, aid for audit)
• Full-Time Equivalent (FTE): Charge per foreign accountant or employee on annual or monthly basis.
• Transaction-based: Invoice, pay period, or processed transaction, that are best for firms with a high repeat volume.
• Value-based: Fee amount to equal value gained (e.g., percentage of cost savings).

Offshore Accounting Services Cost Determination

Cost of offshore accounting will be determined by the following:

• Scope and Sophistication: More advanced or higher-order services will be more expensive.
• Experience Level Required: Experienced or specialist accountants will be more expensive than juniors.
• Service Frequency: Recurring retainer work done sporadically will be more expensive than engagements year-by-year.
• Customization: Enormous quantities of reports, consulting, or specialty work tailored push cost upward.
• Technology Integration: Automatable software, automation, and add-on fees are feasible.
• Provider Reputation: Seasoned high-grade off-shore providers of compliance and security will be more expensive and less risky.
• Location: Major metropolitan areas or financial hubs will have more expensive providers than smaller towns or less developed countries.
• Setup and Other Fees: Setup/one-time signing on, additional for overtime, busy season, or special projects.

Comparison: Offshore vs. In-House Accounting Costs

Here’s a comparison of offshore and in-house accounting services:

• Offshore Bookkeepers: $8–$30/hour
• U.S. Bookkeepers: $30–$60/hour (or $60,000–$100,000/year full-time)
• Offshore Full-Service: $1,000–$3,000/month small/medium-sized business
• In-House Employees: Typically much better than $5,000–$10,000/month salary, benefits, overhead, and training

Add-on savings:

• No cost of health insurance premium, office rent, or equipment charges
• No pension or payroll tax burden
• Lower recruitment and training costs

Fact: Offshore accounting saves 60% overhead, tying up capital for innovation and growth.

Return on Investment with Offshore Accounting Services: What Do You Get

To place a value on the value of offshore accounting services, use actual ROI to place a value on it:

• Savings: 70% or more compared to internal staff
• Access to experienced expertise: Top-tier leaders with current credentials, U.S. GAAP and IRS compliance
• Scalability: Grow or shrink as business requires, no long-term risk of a bad hire
• Efficiency: 24/7 work cycles speed up reporting and decision-making
• Less stress: Lower HR admin, employee turnover, and compliance headache

Hot to Lower Offshore Accounting Expenses

Here’s how you can save the most with little risk:

• Audit your needs: Descriptive for work performed and not great to spend extra money on other services.
• Choose the proper costing method used: Hourly/project will be just barely more suitable for repeat fluke clients; repeat orders can be allocated a just fair monthly retainer.
• Negotiate bulk discount price: Bulk term agreements or large buyers are able to negotiate better prices.
• Bundled services: Booking and payroll and tax reporting as a package will provide lower total rates.
• Screen stealth providers: Select established firms with open pricing, U.S. accreditation, and improved security record.
• Screen for secret costs: Ask installation charges, report and overtime charges to be broken down to you.

Offshore accounting service providers are pre-screened professionals who can help you save money and provide expert insights at a fraction of the cost. The cost of offshore accounting services as compared to in-house hiring can be much lower, saving you approximately 40-70% of the original cost normally.

Other than that, scalability, flexibility, and offshore partner expertise can be utilized to improve profitability and allow your in-house personnel additional time for value-added strategic work. Once you have determined the most critical cost drivers and effectively qualified your offshore partner, then you can be better prepared to utilize the power of offshore accounting services and achieve your firm's financial and business goals.

Connect with our experts at The Fino Partners to get expert assistance in handling your expenses and accounts.

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