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What’s the difference between offshoring and outsourcing?

By tipustg

February 27, 2024

The terms offshoring and outsourcing get thrown around a lot. Typically speaking, outsourcing involves delegating specific tasks to offshore accountants, while offshoring requires the firm to move a portion of its business operations to another country.


What is Offshoring?

When people talk about offshoring, they usually refer to back-office processing, also known as BPO. This model is when a firm sets up an office in another country. The best part about this model is that the offshore team belongs to you. They become your full-time employees and focus entirely on your clients and processes. 


What is Outsourcing?

Outsourcing is the simple act of delegating tasks to people outside your firm. Due to a lack of skilled accountants in New Zealand and Australia, outsourcing usually consists of finding offshore talent. When it’s done well, it can save you time and money, and improve efficiency. Effective outsourcing enables you and your onsite team to focus on the higher-value work. It is a great choice if you want to expand your firm but are bogged down with too much compliance work.

With this model, you do not have full-time staff. Instead, you’ll pay 20-40% of the client fee in return for people who know what they’re doing.

Outsourcing vs. Offshoring

With decades of industry experience, we know that the traditional form of offshoring just doesn’t work. This old and ineffective method usually involves recent offshore graduates with little experience, resulting in a massive drop in productivity and a high staff turnover.

While outsourcing is the most effective option, it needs to be done well. Some outsourcing firms will supply accountants who also work for other firms. This can impact productivity as you’ll be dealing with different accountants everyday. At Tipu Resourcing, we do things a little differently. Our hybrid model takes the best parts of offshoring and outsourcing, and puts them together to create an industry-leading service that drives actual results.

We build a core team of accountants tasked to look after your firm and your firm only. If a team member leaves, the knowledge (i.e. your systems and processes), will be stored in our database to ensure a smooth handover. You will also have a dedicated team leader to ensure consistency and train staff so that you don’t have to.

It’s so easy to become bogged down in compliance work, unable to expand on your services or offer business advisory to your clients. Many accounting firms struggle to grow. By handing the compliance work over to international accountants, your team can focus on higher-value tasks. This allows you to focus on upskilling your local team and boosts staff morale.

What next?

Now you’ve identified the difference between outsourcing and offshoring, you can start to move forward. Find an outsourcing model that benefits your firm and provides the tools and information you need to progress. Remember, the most important thing is to get the processes in place. 

For more information about our programmes and services, get in touch today.

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