Is Outsourcing in Your Future?

Source: Inside Public Accounting

CPA firms can deal with staff shortages, especially during tax season, by using temporary workers or by outsourcing to companies such as Xpitax, CCHG Datamatics, and SurePrep. According to consultant Chris Frederiksen in Mill Valley, California, outsourcing provides:

• Faster turnaround for tax return preparation.
• Higher level opportunities for staff.

One firm used temporary workers and audit staff but found that to be inefficient. The firm decided to outsource to Xpitax, which has offices in Chennai, India.

Though outsourcing is relatively rare now, many observers expect it to grow.

The process involves scanning client documents to a secure VPN connection and processing them remotely. The documents do not leave the United States. Indian accountants prepare the returns using dummy terminals. A complete description of the Xpitax process can be found at www.xpitax.com/outsource/process.htm.

Because it can be time consuming to scan voluminous documents, tax returns for clients who bring in boxes of documents are sometimes kept in-house.

Firms and their clients are concerned about security. Frederiksen visited Xpitax and other outsourcing firms and endorsed their security procedures. Their employees do not have hard-drives, cell phones, cameras, or paper and pens.

Some firms empathize with clients’ security concerns and give them the choice to have their returns prepared in-house.

Frederiksen expects outsourcing to expand into bookkeeping, payrolls, and more. A description of outsourcing solutions at Xpitax can be found at www.xpitax.com/about/solutions.htm.

From Inside Public Accounting, July 2007, p. 9. The Platt Consulting Group (www.plattgroupllc.com). Subscription $369 per year; back issues—nonsubscribers $50. 317-733-1920.