For years, many accounting firms regarded outsourcing as a cautious experiment, useful in some cases but rarely a core part of their strategy. That has changed. Faced with a competitive business environment, ongoing talent shortages, and rising client expectations, firms are increasingly rethinking their approach.
Driven by greater maturity among international partners, outsourcing has increasingly transformed from a cost-saving tactic to a strategic method for building capacity and capabilities.
"Outsourcing has shifted from being a cost arbitrage play to a capacity and capability strategy. Five years ago, firms outsourced primarily to save money. Today, they outsource because they can't hire fast enough, can't find the right talent locally, and need sustainable scale," said Nick Sinclair, founder of global accounting staffing solution provider TOA Global. "What's fundamentally different now is maturity. International partners understand U.S. accounting standards, firm culture, client service expectations, and most importantly, outcomes. The industry has moved from task outsourcing to true team extension, where offshore professionals operate as fully integrated members of the firm."
Echoing the sentiment, Kane Polakoff, a partner and client advisory services practice leader at New York-based Top 100 Firm CohnReznick, said that, in recent years, outsourcing has evolved from a "lift-and-shift" cost-saving model to a more integrated, technology-driven approach.
"It was more of pure labor arbitrage early on. … [It was] more of a lift-and-shift model, which I call it. So the focus wasn't necessarily on optimization, on leveraging a lot of technology and enhancements. [It was] really to take the same process and replicate that same process somewhere else."
Added Polakoff, "Now, as you've evolved into the last five years and even the last couple of years, because of the enhancements of technology, the enhancements of automation, and now the enhancements of AI, I'm seeing that it's not only a lift-and-shift. Now, it's taking and understanding the 'as is' process and transforming that into the future, and offshoring is one piece of that. So, how do you do things better? How do you leverage the technology to improve, and how do you build [so that] the information is being captured more systematically, and it's becoming more of a review of the work? So the upskilling factor is such a critical thing that's happened in the last five years with global operations, but it's going to expedite even more with AI."
The 2025 National Management of an Accounting Practice Survey from the American Institute of CPAs and the Chartered Institute of Management Accountants' Private Companies Practice Section and CPA.com found that 29% of the responding firms leverage offshoring. Based on the findings, offshoring is heavily concentrated among larger firms: Nearly three-quarters of firms with net client fees of $10 million or more offshore some work, and 46% of top-performing firms do so, compared with 29% overall, indicating that larger, higher-performing firms increasingly view offshoring as a long-term strategy.
Among firms that outsource, the service lines being outsourced, according to the survey, include:
- Individual tax (51%);
- Business tax (42%);
- Client accounting services (38%);
- Audit (28%);
- Administrative (15%);
- Technology consulting (8%); and,
- Transaction advisory (3%).
Regardless of size, firms facing increased workloads but lacking the capacity to grow may find outsourcing to be an ideal solution. According to Accounting Today's most recent Year Ahead survey, hiring of some kind remains the most common way for firms to build capacity in 2026, with 15% planning to outsource outside the United States.
While outsourcing has come a long way in the past five years, as international partners grow in sophistication and capabilities, it is not a simple set-it-and-forget-it solution. It's an ongoing partnership that requires leadership, coaching and intent.
Is outsourcing right for your firm?
Determining whether outsourcing is a good fit depends more on the operational processes in place and the mindset than on the firm's size. For instance, firms that have standardized procedures in place and can clearly define scope, track performance metrics, and align outsourcing with specific business goals are better positioned to succeed.
"Firms pursue outsourcing for various reasons — cost savings, workforce agility, talent shortages, and growth objectives among them. Many begin executing their offshoring strategy before fully operationalizing it, developing supporting structures along the way," said Lindsay Gaal, chief customer officer at CPA firm management solutions provider Makosi. "More thoughtful firms determine measurable business goals and success criteria, ranging from financial outcomes to adoption to utilization. Key enablers include robust resource management, standardized processes and workpapers, strong technology and security frameworks, and thoughtful hiring discipline. Firms that pause before making additional onshore hires often signal readiness to initiate or scale offshoring. While these elements aren't prerequisites, they greatly smooth the transition, especially with guidance from an experienced offshoring partner."
Added Sinclair, "Outsourcing readiness has far more to do with mindset than firm size. Firms that are ready have documented processes, clear role definitions, and leaders who delegate outcomes, not just tasks. Firms that struggle are usually trying to outsource chaos. If workflows live only in people's heads and outsourcing is seen as a quick fix, it almost always fails."
Getting started also requires clarity about what tasks to outsource. In general, work that is typically ideal for outsourcing includes:
- Structured, repeatable, and process-driven tasks.
- Work with clear steps, a defined scope, and measurable outcomes.
- Bookkeeping and transactional accounting.
- Accounts payable and accounts receivable processing.
- Payroll data entry and processing support (excluding payroll setup and jurisdiction-specific compliance).
- Bank and account reconciliations.
- Tax preparation support and return assembly.
- Audit support and workpaper preparation.
- Client accounting services (CAS) production work.
- Compliance-oriented tasks with standardized requirements.
- Administrative and back-office accounting functions.
That said, industry sources note that it is less about specific service lines and more about the characteristics of the work, and about intentionally designing teams that align the right talent to the right tasks.
"Most firms continue to prioritize outsourcing in assurance and tax, with many expanding into CAS and advisory services — such as FDD [financial due diligence], valuations, risk advisory, and IT audit — to manage capacity without over-hiring during growth cycles," said Gaal. "The effectiveness of outsourcing is not defined by service line but by key characteristics, including business seasonality, the type of work, process and workpaper standardization, technology maturity, profitability potential, and a strong culture of commitment to offshoring. Success occurs when these factors align, enabling firms to fully realize the benefits of a global delivery model."
Noted Sinclair, "The bigger question isn't what to outsource, but how to design the right talent mix. High-value advisory and partner-level decision-making should remain onshore. Mid-level technical and review roles work best in a blended model. Entry-level and process-driven work can be primarily offshore. Firms that design their teams intentionally get far better results than those that outsource reactively."
The right partner and approach
Finding the right outsourcing partner requires firms to look beyond hourly rates. While cost matters, talent quality, training, leadership, security and cultural fit are key to long-term success. Providers that compete primarily on price or have high turnover, poor training, and unclear delivery models can indicate greater risks.
It's also important to keep in mind that there is no one-size-fits-all approach to outsourcing, and options to consider include onshoring, nearshoring and offshoring. Additionally, firms might choose to partner with a third-party provider or build their own captive teams. Outsourcing isn't just a single strategy but a variety of methods that firms can customize to meet their needs.
For example, for more than a decade, CohnReznick has actively expanded its international staffing footprint to address capacity constraints and talent shortages. The firm has built substantial offshore operations in Chennai, India, and, more recently, through a third party in the Philippines. Today, the firm employs more than 1,000 professionals who support U.S. teams on client work.
Polakoff said that CohnReznick has used different delivery models to build its global teams. A key partner within the firm, who had direct insight into the Chennai market, facilitated connections between the U.S. and offshore operations there. In the Philippines, the firm adopted a build-operate-transfer approach, initially collaborating with a third party before transitioning that team into fully integrated CohnReznick operations.
"We've done different things, like whether it's a captive or whether it's a third party or a [build-operate-transfer] model, you know, I've done all those. But I think … it's all about building the core foundation, making sure you have the right executives that are aligned with the culture, and understand the business," Polakoff said.
Sagar Ahuja, CEO of QX Accounting Services, an offshore partner for CPAs and accounting firms, highlighted the increased adoption of a "build-operate-transform-transfer," or BOTT, approach, saying that many larger accounting firms are reaching a point where traditional outsourcing models are no longer sufficient for their scale and complexity. "As firms grow, the challenge is no longer just access to talent," he explained. "It's about building a scalable, controlled, and firm-owned delivery engine that can support multiple service lines, tighter turnaround times, and increasing compliance demands."
This has led many firms to explore what he calls "global capability centers." However, Ahuja cautioned that setting up a GCC independently from day one often comes with more risk than firms anticipate. Maintaining a steady supply of talent, building local leadership, managing attrition, and handling infrastructure, HR, finance, and regulatory requirements in an offshore or nearshore location can quickly overwhelm firms that lack prior experience, he noted.
"There are plenty of examples of GCCs that struggled or were eventually shut down because the fundamentals weren't in place," Ahuja said. "Running a GCC is a business in itself, and many firms underestimate that."
To address these challenges, Ahuja said firms are increasingly adopting a BOTT approach. Under this model, a third-party provider builds the GCC, operates it in the early stages, and transforms the delivery model by embedding the processes, governance, technology and leadership. Once the center is stable and performing consistently, ownership is transferred to the firm.
"Even after the transfer, many firms choose to keep the partner involved in a lighter-touch role," Ahuja added. "That ongoing support helps ensure continuity across talent, operations and governance, while giving the firm full ownership and control of the center."
Sinclair said he founded TOA Global in 2013 to help solve a problem he faced within his own accounting firm: how to scale without compromising quality. "Today, we support more than 1,200 accounting firms globally and employ over 4,300 accounting professionals working in dedicated offshore teams," said Sinclair. "We partner with U.S. firms to build embedded teams across bookkeeping, tax, audit and business services. These are not shared resources or transactional arrangements. Offshore professionals operate as fully integrated members of the firm, aligned to its systems, culture, and client standards. The focus is long-term capability building, not short-term labor substitution."
For firms evaluating potential outsourcing partners, Gaal of Makosi emphasized several core principles to consider:
- Prioritize partnerships, not vendors. People drive both cost and revenue, so collaboration and quality alignment are essential.
- Get beyond the hourly rate when evaluating cost and value. Understand the value of efficiency, quality, and fee versus output.
- Consider specialized partners. A one-stop shop may not excel in every service area; a multigeography, multivendor strategy may yield better results and reduce internal friction.
- Assess talent quality holistically. Evaluate education, certifications, technical expertise, experience, time-zone overlap, communication skills, and client-facing ability.
- Align your strategy to your needs. Determine whether short-term, long-term, resource-based, or project-based outsourcing best fits your goals. Don't just transfer utilization challenges offshore at a lower cost.
- Prioritize security and compliance. Require ISO certification and ensure international data protection standards.
- Leverage peer insights. Seek referrals and learn from the experiences of other firms to make informed decisions.
Outsourcing is an ongoing partnership
When looking to outsource, it is important to remember that it isn't a set-it-and-forget-it solution. It's an ongoing partnership that requires relationship-building, dedication, and leadership.
Said Gaal, "A frequent mistake firms make with offshoring is assuming it will function seamlessly. In reality, building a successful offshoring model mirrors the rigor of an M&A integration. It requires engaging every operational workstream to assess impact, design processes and policies, and execute with alignment. For example, resource management must adjust workforce planning; HR must address onboarding and compliance; and technology must ensure integration and security. Success depends on coordinated execution, clear accountability, and cultural alignment across the firm."
Utilization and disconnects between strategy and execution are also factors to consider, Gaal noted. "Lower offshore costs can mask inefficiency. Underutilized teams quickly erode savings. For example, a $30 per hour resource operating at 50% utilization effectively costs $60 per hour, and rework due to talent misalignment can push that to $75 to $90 per hour," she explained. "Finally, disconnects between leadership strategy and execution often undermine results. The individual accountable for offshoring execution must have a strategic voice at the leadership table to align cost management, operations, and profitability goals."
It is also critical not to underestimate the amount of work needed to achieve success, said Polakoff. "Most firms don't take that into consideration, or even clients. They think that you just hire a third party and everything is going to be great. So they don't have … the right project management; they don't have the right transition team; they don't have the right communication; they don't have rules of an engagement. They don't set up a plan. And so you have to really plan it," he said. "You can't just wing something like this and be committed to send people over to the local geographies, to be part of that transition, to support those efforts. And I think, as I look back in my career, there's been so many situations [where] things have gone wrong for others, and that's because they don't understand and they don't appreciate the amount of time and effort that's required to set it up right the first time. And then what you get is frustration. Then the U.S. team says, 'Well, this is not working. We should stop doing this.' And then they don't communicate with the staff. So communication is such a critical factor, and it's underestimated, too."
Hitendra Patil, CEO of Miami-based consulting firm Accountaneur, agreed that many outsourcing challenges stem not from the model itself, but from misconceptions about how outsourcing should actually work: "The most common misconceptions include thinking that outsourcing means taking over management, sending work without enough background, changing the scope without updating paperwork, viewing offshore workers just as suppliers, and delaying necessary process changes until deadlines are missed. Also, ignoring your firm's employees' well-being and how your firm's departments collaborate when outsourcing will ultimately cause chaos."
Patil also pointed to the importance of regularly reassessing outsourcing arrangements. "Review your outsourcing activities at least quarterly. Verify the scope and volume pricing when work volume increases significantly. Include a yearly formal review clause in the outsourcing agreements. If your outsourcing partner doesn't adapt to your firm's growth trajectory, it will eventually fail," he said.
Makosi's Gaal agreed that continuous assessment is important and said, "Partnerships require continuous assessment to ensure alignment, performance and accountability. Firms should consistently evaluate whether their offshoring partner meets expectations, upholds quality standards, and remains the right fit — an insight often evident early, since people are the core product. Additionally, assess whether the partner's growth strategy aligns with your firm's long-term objectives in scale, service diversification, and market expansion."
Many industry sources believe that by treating outsourcing as a deliberate, well-managed partnership rather than a quick fix, firms can scale effectively, strengthen their teams, and turn global talent into a competitive advantage.
"Outsourcing is no longer a fringe strategy. It's becoming a core infrastructure for modern accounting firms," said Sinclair. "The question isn't whether firms will globalize their talent model; it's whether they do it intentionally or reactively."
