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IQ BackOffice/Offsite Office  President & CEO David Schnitt Shares Expertise at the Digital CPA Conference 2024

In a recent digital CPA Conference webinar, Dave Schnitt, President and CEO of IQ BackOffice and Offsite Office, shared valuable insights, drawing from his company's extensive experience in providing outsourced accounting services and offshore staffing solutions.
David Schnitt

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Expanding Capacity Through Offshore Teams: Insights from IQ BackOffice & Offsite Office

In today’s rapidly evolving business landscape, CPA firms and accounting professionals constantly seek innovative ways to enhance their capacity and streamline operations. One increasingly popular solution is the utilization of offshore teams. In a recent digital CPA Conference webinar, Dave Schnitt, President and CEO of IQ BackOffice and Offsite Office, shared valuable insights, drawing from his company’s extensive experience in providing outsourced accounting services and offshore staffing solutions.

Overview of IQ BackOffice

IQ BackOffice, established in 2002, has been at the forefront of accounting services for over two decades. The company caters to a diverse clientele, including CPA firms, private equity-backed businesses, and private companies. Their service offerings range from comprehensive accounting to specific process solutions such as Accounts Payable, Accounts Receivable, and Payroll management.

Distinguishing Between Outsourcing and Offshoring

Mr. Schnitt emphasized the importance of understanding the difference between outsourcing and offshoring:

What is Offshoring?

Offshoring involves building your own team abroad or partnering with a firm that provides staff. The key aspect of offshoring is that the company retains management responsibilities, including process setup, documentation, technology implementation, and quality control.

What is Outsourcing?

In this model, a company hires a firm to deliver specific services at guaranteed service levels and costs. The outsourcing provider manages all aspects of the operation, making it a more turnkey solution for businesses.

While offshoring can be cost-effective, it typically requires a significant scale (around 100 employees) to be viable. On the other hand, outsourcing often yields more significant savings and is easier to implement, especially for firms new to global workforce solutions.

IQ BackOffice: A Global Presence

With approximately 1,000 professionals worldwide, IQ BackOffice operates from two strategic locations:

Chennai, India (750 employees): Focuses on transactional work such as Accounts Payable, Accounts Receivable, and Bank Reconciliations.

Manila, Philippines (250 employees): Handles higher-end accounting work, leveraging the local workforce’s training in US GAAP and superior English language skills.

This dual-center approach allows IQ BackOffice to optimize costs while maintaining high quality and service levels.

Service Models and Client Interaction

IQ BackOffice offers two primary service models:

Fully Outsourced Model

The company provides comprehensive services, including direct client interaction and financial statement production.

Background Support Model

IQ BackOffice performs the work while the client firm maintains the primary interface with end clients.

The choice between these models depends on the client’s specific needs and objectives.

Keys to Successful Offshoring

Mr. Schnitt highlighted several critical factors for successful offshoring:

  • Detailed documentation
  • Well-established processes
  • Effective use of technology
  • Robust quality control measures
  • Proper review procedures

He cautioned that many firms underestimate the differences between managing onshore and offshore teams, which can lead to potential failures if not properly addressed.

The Importance of Leverage

To maximize profitability in outsourced accounting, Mr. Schnitt stressed the importance of leverage – assigning lower-cost resources to transactional work while higher-skilled professionals handle book closings and client interactions.

Quality Assurance and Accuracy

IQ BackOffice prides itself on maintaining a 99.97% accuracy rate per transaction. This high level of quality is achieved through years of process refinement and the development of proprietary technologies.

Dedicated Teams and Client Relationships

The company employs a dedicated team model, allowing staff to develop a deep understanding of client needs, business rules, and processes. This approach fosters strong client relationships and enables customized service delivery.

Service Areas and Technology Integration

IQ BackOffice primarily focuses on outsourced accounting, individual accounting processes, and HR Payroll services. Their technology seamlessly integrates with clients’ existing systems, enhancing efficiency while maintaining familiar workflows.

Communication and Security

Effective communication is crucial for offshore teams. IQ BackOffice provide various channels, including US phone numbers, online chat, email, and video conferencing to ensure seamless interaction. Mr. Schnitt also addressed security concerns, noting that offshore operations often offer better data security than onshore alternatives. He supports this further with a case on how their offshore team prevented a significant financial loss for a client by catching a fraudulent wire transfer. However, he also emphasizes the importance of having proper security measures in place regardless of location.

Cost Savings and ROI

While cost savings are a significant benefit of offshore teams, Mr. Schnitt advised against making this the primary motivation. Typical savings range from 30-40% for offshore staffing and up to 70% for outsourcing. However, he emphasized that the focus should be on acquiring great global talent and improving business operations rather than solely on cost reduction.

Conclusion

Expanding capacity through offshore teams offers significant potential for CPA firms and accounting professionals. By understanding the nuances of outsourcing versus offshoring, implementing robust processes, and focusing on quality and communication, firms can leverage global talent to enhance their services and grow their businesses. As the accounting industry continues to evolve, embracing these global workforce solutions may become increasingly crucial for firms looking to remain competitive and efficient in the years to come.

Are you looking for a dedicated, remote Accounting Team? OffsiteOffice can help.

Here at OffsiteOffice, we build remote, offshore accounting teams that work as an integral part of our clients’ operations. We offer the best global talent at cost-effective rates so you can enhance your financial operations and achieve your goals faster. We help you do everything needed to build a team, from helping you design a strategy to recruiting, setting up interviews, onboarding your team, providing infrastructure and ongoing administration.

OffsiteOffice will meet with you to understand your business goals and the requirements for each position and then find the perfect candidates to join your team. We build dedicated teams exclusive to your account that we provide with the infrastructure and tools to work effectively with you. Lastly, we handle the administrative aspects of your team – payroll, HR, etc., so you never have to. All for 1 simple monthly fee.

Contact OffsiteOffice today to learn more about building an effective Global Accounting Team.

FAQs

Offshoring involves building your own team abroad or partnering with a firm that provides staff, while outsourcing entails hiring a firm to deliver specific services and manage all aspects of the operation.
Yes, offshore teams offer a cost-effective solution for expanding capacity and streamlining operations for CPA firms and accounting professionals.
Detailed documentation, well-established processes, effective technology, robust quality control measures, and proper review procedures are essential for successful offshoring.
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