Keeping track of a company’s finances is a challenging responsibility that involves many complex tasks, from budgeting and forecasting to recordkeeping. As businesses grow, it becomes increasingly complicated to manage these duties.
However, hiring an internal bookkeeper can be time consuming and expensive, especially if your bookkeeping requirements vary over time. That’s why more businesses are choosing the more cost-efficient and flexible option of outsourcing their bookkeeping functions to offshore bookkeepers.
This article will provide insights into the benefits and drawbacks of this alternative and offer guidance on when and how to hire an offshore bookkeeper.
What Is an Offshore Bookkeeper?
An offshore bookkeeper is a remote professional who handles a company’s bookkeeping tasks while being based in a different country.
They can handle all the same responsibilities as an internal bookkeeper—such as recording transactions, preparing financial statements, and managing accounts payable and receivable—without requiring the overhead of an in-house worker.
This means that by hiring an offshore bookkeeper, you can benefit from cost savings while still trusting your company’s finances with an expert who has the specialized knowledge needed to understand your requirements.
It is important not to confuse offshore bookkeeping with the more general practice of bookkeeping outsourcing. While they both involve delegating the task of bookkeeping to a third party outside of your organization, offshore bookkeeping specifically refers to hiring a bookkeeper based outside your country.
However, offshoring still gives you access to talented bookkeepers who can handle your finances while your in-house team focuses on core business functions and driving the company forward.
Advantages of Hiring Offshore Bookkeepers
Considering that 71% of financial service executives outsource financial tasks, it should come as no surprise that recruiting offshore bookkeepers offers several key benefits for businesses.
Here are some of the biggest advantages of remote bookkeeping:
Cost-effectiveness
Due to the lower cost of living in many countries outside of the US, opting for offshore bookkeeping is often a more affordable solution than hiring onshore professionals.
For example, the average annual salary of a bookkeeper located in Latin America (LatAm) ranges from $15,000 to $42,000, which is around 36.82% less than that of a US-based bookkeeper.
Furthermore, you won’t have to pay for the overhead costs of an in-house worker, such as office expenses and accounting software.
Scaling opportunities
The services of an offshore bookkeeper are often more flexible than those of an internal bookkeeper, particularly if you hire a contract bookkeeper on a per-project basis or partner with an offshore bookkeeping outsourcing company.
This makes it easier to scale their bookkeeping services as your business grows and your needs change.
Access to specialized talent
By choosing offshore bookkeeping, you gain access to a far larger pool of talent. This means you have an abundance of bookkeepers to choose from, including those with specialized skill sets and an understanding of your industry. Therefore, you’re more likely to find an effective bookkeeping professional who meets your business requirements.
Disadvantages of Hiring Offshore Bookkeepers
Although offshore bookkeeping may be an effective approach to handling your business’ finances, there are certain aspects you need to consider before opting to offshore your bookkeeping:
Communication barriers
Differences in culture and language can potentially lead to communication complications, such as if you are using an offshore provider who is not a native English speaker. These differences could potentially lead to misunderstandings, delivery delays, or errors.
However, there are plenty of offshore professionals around the world with excellent English proficiency. Additionally, some countries, such as those in LatAm, share cultural similarities with the US.
Less direct control over finances
You may not be able to monitor and manage a remote bookkeeper’s activities as directly and consistently as an in-house bookkeeper. It’s best to choose a bookkeeping provider who deeply understands your business and is adept at working independently.
Information security
Offshore bookkeeping involves sending data and other sensitive information necessary for managing financial records to an external party. Therefore, it’s crucial to entrust this information only with a reliable bookkeeping provider with the proven ability to protect it using the appropriate security protocols and technologies.
When Should You Hire an Offshore Bookkeeper?
It’s not easy to decide whether to work with an offshore bookkeeper. But there are some signs that can tell you when this may be an effective approach:
Your in-house finance team is understaffed
Offshoring your bookkeeping may be the ideal solution when your staff can no longer handle the workload that comes with growing your business.
Outsourcing some processes, such as payroll processing and accounts payable, to an offshore bookkeeper can help ease the burden on your internal staff so that they can better manage their work.
Your company lacks bookkeeping expertise
According to a survey of senior finance professionals, skills shortages were one of the top external factors affecting the efficiency of finance teams in 2023.
If your internal staff isn’t experienced or up to date on certain aspects of bookkeeping, an offshore bookkeeper can provide the required expertise. These professionals have advanced knowledge and specialized skills that enable them to handle your company’s financial processes efficiently with minimal errors.
You have project-based bookkeeping needs
Offshore bookkeeping can come in handy if you have specific project-based bookkeeping requirements. You can use the services of an offshore bookkeeper to handle particular projects as needed to free up time for your internal staff to focus on other important business operations.
This way, you only pay for the specific services you need when you need them.
How To Select the Right Offshore Bookkeeper
We’ve established how working with an offshore bookkeeper can be advantageous for your business. But how can you ensure you select the right provider? Remember to take the following actions to make an informed decision about which offshore bookkeeper to partner with:
Evaluate expertise and experience
An understanding of your industry, accounting standards, and financial markets is essential for an offshore bookkeeping provider.
Thoroughly research the provider’s experience and specialties to ensure they have the required capabilities to handle your business’ finances.
Ask about tools, technologies, and communication methods
An offshore bookkeeping provider should have all the up-to-date tools and technologies needed to conduct bookkeeping processes efficiently and make communication easy.
Also, make sure that the tools they use can be integrated with your company’s to keep your financial operations and communications as smooth as possible.
Check references and reviews
An offshore bookkeeper should be able to provide you with a proven track record that indicates their performance and professionalism. Always ask to check their references and look over their client testimonials to verify that they have managed other companies’ finances successfully.
Assess rates
Carefully evaluate the potential provider’s fee structure to ensure it aligns with your budget and delivers a sufficient return on investment.
A transparent pricing structure will help you avoid unexpected fees, so always ask for a detailed breakdown of the provider’s costs and any additional fees involved for extra services.
Evaluate legal knowledge and security measures
Handling financial data is a sensitive task that requires up-to-date security protocols. Ensure your offshore bookkeeper has the right security measures in place to protect the confidentiality and privacy of the financial information you send.
Additionally, an offshore bookkeeping provider should be able to show you that they are fully compliant with international accounting standards and regulations. This demonstrates their commitment to ethical business practices and social responsibility.
Where Can You Find Offshore Bookkeepers?
Sourcing the right offshore bookkeeper for your business requires a systematic approach. Here are some of the most effective ways to locate top remote talent to handle your bookkeeping:
Online platforms
There are plenty of online resources that can help you locate the right offshore bookkeeper for your business.
Platforms such as Upwork, Freelancer, and Fiverr are great places to source specialized offshore bookkeepers who can manage your financial records. You may also be able to connect with skilled professionals through social media platforms like LinkedIn.
Referrals from your personal network
You can also rely on your own personal network of trusted peers and collaborators who have used offshore bookkeeping services before.
This can be an efficient way to get recommendations for offshore service providers that have already been vetted and can deliver on your specific requirements.
An offshore outsourcing agency
Another option is to partner with an outsourcing company that specializes in recruiting offshore talent. These companies already have an understanding of offshore recruitment and typically have a large pool of pre-vetted offshore professionals ready to get started.
For example, Near’s pool of over 35,000 pre-vetted offshore bookkeepers based in LatAm could be your gateway to the right specialist for your business.
Final Thoughts
Collaborating with an offshore bookkeeper can be the ideal approach if you are looking for a cost-effective way to obtain the services of a skilled and flexible professional.
Remember that it’s critical to ensure the bookkeeper you hire has proven expertise and rates that suit your budget. Near can connect you with pre-vetted bookkeepers with affordable salary expectations and a commitment to excellence.
To discuss how you can hire remote professionals in LatAm and save 30–70% on salary costs compared with US-based talent—without sacrificing quality—book a free consultation call.
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