Outsourced Accounting Services – Managing Professional Risk

Flatlay of a professional

Offshoring many of the accounting and bookkeeping processes in your firm offers one of the most exciting opportunities for accounting firms to diversify their staff base and increase profits without any requirement to increase turnover.

The resulting ability to reclassify skilled resources to income earning functions is an added benefit for management strategy that demands higher profits and lower costs while maintaining positive work ethics with improved resource capability.

The Philippines is an increasingly prominent provider of accounting outsourcing services and bookkeeping outsourcing services. Profitmaster is based in the Philippines.

Despite the growth of outsourced accounting services, and outsourced bookkeeping services, there are many firms who still ask: what is offshore accounting?

Once explained, the next question about the use of offshore accountants is about the quality of work. Profitmaster’s use of degree qualified, experienced CPA’s having strong skill and language proficiencies and producing high quality work is the reason given clients why outsource accounting services work for them.

And there is the question of PI insurance. If you are in public practice and considering offshore accounting to the Philippines for your firm, it is worth a call to your PI insurer to understand your policy provisions about outsourcing accounting work offshore.

Many PI providers will not provide cover unless the outsourced accountant Philippines provider can demonstrate that they have also cover for their Australian clients.

As the industry of offshoring continues to skyrocket, the range of services provided by outsourced accounting professionals also grows in intricacy and variety. Clients have shown increased preparedness to work with these professionals and are likewise significantly prepared to claim for negligence wherever offshoring financial services agreement may have been compromised or when there is a delay or incurred losses.

The issue is important because of the significant risks being faced by accounting firms in Australia. There are many cases where firms have suffered considerable liabilities as a result of the work done by poor providers. These risks must be considered no matter whether you are considering using offshore bookkeeping services or offshore accounting services.

The Australian professional bodies have provided guidance to assist accountant understand and mitigate these risks, as does the Tax Practitioners Board. The TPB states “providing adequate supervisory arrangements is critical in the offshoring tax service business model”.

APES GN 30 Outsourced Service has been issued by Accounting Professional & Ethical Standards Board Limited (“APES”). APES GN 30 provides guidance for Members in Public Practice to consider when managing the risks associated with providing or utilising Outsourced Services.

Accountants utilising outsourced accounting services are required to evaluate their ability to comply with Section 130, Professional Competence and Due Care of APES 110 Code of Ethics for Professional Accountants.

Basically this means that accountants are required to consider the risk of potential inability to perform an engagement due to poor performance of the outsourced accounting services provider.

Profitmaster is a professional services firm providing bookkeeping and offshore accounting. This year we celebrate our third year of operation and ensuring and our compliance with all of the requirements of the Australian accounting bodies has been an essential element of our success as an accounting bpo.

Our founder and CEO is a Chartered Accountant with more than 30 years’ experience holding a practicing certificate with CAANZ. Accounting firm are assured that our professional indemnity insurance policy complies with the requirements of CAANZ and CPA Australia.