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What Does it Cost to Outsource Your Tax Preparation Tasks?
More and more business firms are opting for outsource tax return preparation offered by foreign companies based in developing countries for reducing their costs and concentrate on more productive activities.
The outsourcing of tax preparation is among the most sought-after outsourcing services. CPA firms based in developed countries are looking to take advantage of lower labor costs in countries like India and efficient work performance. But hiring these services has various ramifications which have been discussed below.
The process of hiring the services of Outsourcing Tax Preparation is very simple:
- The CPA firm located in a developed nation will place tax documents into a .pdf file in a shared network folder.
- The offshore outsourcing company will then upload the scanned documents through the data center.
- The outsourced workers will then complete the tax return process and sent it to the company based in the developed country.
Cost cutting is the major reason for outsourcing tax preparation work. According to reliable surveys created by US CPA Journal an accountant is offered $39 per billable hour. But by outsourcing the costs can be brought to 50%.
Another important factor is the quick turnaround time. Due to the time difference between countries like US and India, a tax return task assigned in the evening can be completed and given back to the U.S. firm in the morning. During the busy season this facility can prove to be extremely useful. The heavy workload can be eased by outsourcing the work. Quick turnaround helps in managing the process efficiently.
How to Choose the Right Outsourcing Partner for Preparing Taxes
But there are also a few concerns related to outsourcing tax preparation services. The confidentiality of the client information is put under threat. Though data-encryption techniques and other security features are offered but still the clients remain uneasy. They fear that the data could fall in to wrong hands like competitors. The outsourced firms like Cogneesol generally assure that the confidentiality of clients’ personal information is maintained. Written contracts are signed and the work of the outsourced companies is monitored by offshore clients.
The process of outsourcing also prevents companies from training their in-house staff in this task. This makes them dependent on the outsourcing companies as they unable to groom seasoned tax professionals.
The state tax rules of some of the states make it difficult for firms to reduce costs by outsourcing their tasks. Some state governments also discourage outsourcing as it reduces employment opportunities in the home nation. So outsourcing tax preparation services has its pros and cons. But it is up to a business organization to decide what is beneficial for them.
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Cognessol has created a niche for itself as far as offering CPA Tax Preparation Services is concerned. For more information, you can call us on +1 646 688 2821 or can push a direct e-mail at [email protected]
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