By Paul Ursich
Outsourcing accounting consultancy services overseas can be a tempting strategy for gaining expertise at a highly competitive cost. But as someone who’s previously done that, here are a few precautions I learned along the way.
- Language can be a barrier. I admire anyone with any degree of fluency in a second language. But while you can easily find English-speaking talent almost anywhere, there are degrees of familiarity with the language. When addressing, in person, someone who speaks heavily accented English, body language can help you understand. Over the phone, or in written communications, however, it’s not as easy. I’ve received more than my share of mangled written communications from consultants whose grasp of the language wasn’t as firm as I’d hoped. A company’s finances can be confusing enough without the added challenge of shaky long-distance communications.
- Distance adds confusion. Most of the time, you’ll exchange emails and phone calls with your locally based consultants, but they are available when the situation demands face-to-face contact. In person, you can more easily work together as a team to gain full familiarity with your general ledger system and other issues. In-person meetings with foreign talent can range from highly inconvenient to impossible – or at such a high expense that it more than offsets the cost advantage of hiring offshore. There can also be negative repercussions when the distance is measured across multiple time zones, as either you’ll have to hold meetings in the middle of the night, or your consultant will. Sleep deprivation might explain the time I received a balance sheet figure from an offshore accountant that was off by a decimal point — and tens of millions of dollars.
- Standards can vary. How familiar is your offshore talent with GAAP standards? You might not know until it’s too late. Verifying qualifications and interviewing your consultants can be a difficult process, and you’re unlikely to have much insight into your consultant’s bottom-line abilities.
When deciding to seek an offshore consultant over a local accounting consultant, you need to be aware of the risks. It could turn out to be one of the most expensive hiring decisions you’ll ever make.
As Director of the CFO Advisory Group, Paul Ursich specializes in streamlining processes and developing reporting to ensure the efficient operation of client accounting departments. Reach him at pursich@wiss.visioncreativegroup.com