Current State of Tax Outsourcing

The Current State of Tax Outsourcing

Posted on September 22, 2016

Outsourcing is becoming popular globally, and over the last decade, several accounting firms, whether large international enterprises or small local firms have adopted tax outsourcing as one of the ways to enhance client service, efficiency, and staff retention. This post will present a brief insight about the benefits offered by tax outsourcing while discussing about the diverse regulatory & security issues pertaining to the business process.

How Is Tax Outsourcing Beneficial?

Tax Outsourcing improves the efficiency of an organization in multiple ways. These include:

  • By using offshore tax processing, firms can significantly reduce costs, as outsourcing the work is far more economical than hiring in-house tax professionals
  • Tax outsourcing enables an organization to adopt a paperless tax workflow, which in turn, standardizes and streamlines the tax preparation and review process
  • Organizations can also achieve significant cost efficiency by outsourcing work during the off-season instead of the peak-season

Tax Outsourcing Improves Client Service

Tax outsourcing is also known to significantly improve client service by enabling faster completion of tax related tasks. Also, as mundane file organization and data entry tasks are no longer required to be performed by in-house professionals, they can emphasize on high-level & value added services.

What to Ensure Before Outsourcing the Tax Processing?

While the aforementioned benefits accentuate the fact that tax processing outsourcing is beneficial in several ways and even reduces the overall costs, but, there are a few vital aspects which need to be taken care of, before choosing the offshoring partner and outsourcing the work to them.

One of the top concerns amongst CPA firms who find themselves thinking about tax processing outsourcing is the privacy and security of the taxpayer’s personal information. Thus, the firms must ensure that their tax processing service providers will guarantee the confidentiality of the data and overall secure access. NDAs (Non-Disclosure Agreements) can also be signed between the firm and the service provider to legally bind the latter from disclosing any personal information of any taxpayer.

The CPA firms can also ask about the details of the security measures being applied on the service center or location, where the tax processing work is being performed, the security of the hardware devices where the data is being stored, the security of the software tools being used for completing the tasks and finally, the security of the data when it is in transit.

When finally comparing the pros and cons, tax processing outsourcing, indeed, is a great way to reduce costs and improve efficiency, but CPA firms need to be very careful about whom they are handling the work and quality of the tasks being performed. Thus, initially, only a small batch of tasks should be outsourced in order to evaluate the quality and timeliness of the outsourcing service providers.

Flatworld Solutions is a leading provider of offshore finance & accounting services including unmatched tax processing services, bookkeeping services, financial analysis, payroll processing and many more. With a seasoned team of accounting and tax experts, we deliver an unsurpassed array of services characterized by accuracy, flawlessness and efficacy.

Contact us to share your tax processing services or other finance related service requirements in the form of a comment in the below given box and our finance consultants will contact you shortly.

Interested to know more?

The following two tabs change content below.

Leave a Reply

Your email address will not be published. Required fields are marked *

seven + eight =