Is Offshoring Business Processes Really The Right Way To Go?

Offshore business process outsourcing (BPO) has grown substantially over the last decade and is expected to increase. But outsourcing business processes such as administration, IT support, bookkeeping, web design and customer service isn’t just about saving money and plugging potential skills gaps. There are many other factors you might want to consider, before launching offshore.

The Regulatory Framework

The Australian regulatory environment is one of the most complex in the world, with over 20 separate pieces of legislation covering:

• Goods and Services Tax (GST)
• Payroll, Payroll Tax, PAYG Withholding
• Superannuation
• Income tax and More

Late or inaccurate lodgements can result in harsh penalties. Australian accountants complete extensive formal and on the job training and ongoing professional development to stay up to date with regulatory requirements.

Data security

Your offshore team will have access to sensitive information about you, your customers or employees, such as bank details. You need to do your due diligence and background checks on overseas staff just as you would for local employees or and outsource service provider. You should ensure they also comply with Australian Privacy Principles. Any sort of data breach or privacy scams are likely to take up your time, may require legal advisers and potentially a transition to a new service provider.

In addition, your reputation cannot be fully protected like your assets with PI insurance. Even if your data is protected with cyber protection insurance in the case of a breach from an offshore worker, your reputation may already be compromised.

Your reputation and duty of care

You can’t offshore or outsource ultimate responsibility or Directors duty of care. Directors are ultimately responsible for financial reporting and they are generally overseeing the finance team and external advisors that are producing financial reports. Directors duty of care is written into legislation and in Australia is provided for in the Corporations Act.

Keeping expertise local

There can be little argument that the growth in offshoring of accounting & finance tasks has impacted on the employment opportunities available to graduate accountants and bookkeepers in Australia.  Commonly offshored services include foundation skills such as payroll and bookkeeping – limiting training opportunities available to young accountants. I firmly believe we have felt the impact of this over COVID, with our borders shut and no influx of overseas professionals, accounting firms across Australia are finding themselves short of suitably qualified staff at all levels.

Offshoring versus Outsourcing…

While many outsourcing providers offshore part or all of their service offering, many don’t.  At Rockwall Partners, all our client work is conducted in house by appropriately trained staff. We’re proud to be a part of training the next generation of talented young accounting professionals. We’re able to do this by making smart use of technology to generate efficiency and offer a premium, professional service to our clients.