People often ask me if I'm afraid that artificial intelligence will make offshoring obsolete. It's not going to make offshoring obsolete; it's going to supercharge it. The biggest challenges of offshoring — time zones, cultural differences and communication barriers — are exactly what AI can help us solve.
For instance, if your offshore team has a question, they must wait until the next morning to get it answered due to the time zone difference. But with AI able to mine frequently asked questions and standard operating procedures, your offshore team can get answers instantly instead of having to wait overnight. AI can also act as a cultural filter for emails, preventing miscommunication. Think of it as Grammarly for culture. For example, phrases like "you people" can be offensive to many Americans, but it's perfectly OK to say in India.
Another example of cultural mismatch is feedback. U.S. accountants are not always good about giving feedback to their teams, and offshore workers are often reluctant to seek it. In their culture, doing so can signal that one is not intelligent or not paying attention. Problems in workflow can go on way too long before either side realizes it. But AI tools can automate a lot of the checking and feedback loop.
Also, to the American ear, Indian workers often seem to be speaking very quickly. Even when a job candidate speaks perfect English, I've seen U.S. interviewers keep nodding their heads to be polite, even if they're not following. Then they'll pass on an otherwise great candidate because they couldn't understand them in the interview. However, AI can prompt interviewees to slow down if it senses they're speaking too fast.
Then there's email etiquette. Many developing countries like India and the Philippines never had an email phase. They went straight from paper to mobile. And there's different etiquette for each channel. Email is a more formal form of communication. It replaced snail mail. But many developing countries never had the chance to develop email etiquette. Even middle-aged and older workers in those countries don't use email. It's all WhatsApp or iMessage.
If I email someone in India or the Philippines, they just don't take it seriously like someone in the U.S. will. Often they simply don't respond. If I want a timely answer, I have to text them — and then they'll respond. I still send job offers by email, but I follow up with a text to confirm they got it.
All these challenges associated with offshoring can be addressed by AI and make it more efficient.
New work roles
AI is also raising the bar on the type of work that offshore teams can do. AI is making tax prep faster and more efficient as it eliminates the need for humans to do menial, repetitive manual work such as the data entry part of preparation. AI is freeing up offshore workers to do more tasks at a lower level of complexity, just as offshore workers are freeing up their U.S. counterparts to do higher complexity tasks. Since tax preparation is getting increasingly efficient, offshore teams can now work more on preparation and reviews.
A Top 100 U.S. firm told me that thanks to AI, its offshore team now has extra time after tax season to synthesize client data and flag opportunities beyond tax prep — say, a client who bought a property or grew their company from two to 20 employees — which the U.S. tax partner then uses to pitch wealth management, recruiting or IT support services. Those are examples of high-value tasks.
AI-ready accountants
Firms are telling me that it's easier to find AI-ready accountants offshore than in the U.S. The populations are younger in many developing countries and they're more in tune with technology. Plus, their livelihoods depend on keeping up with it.
As AI gets more integrated into accounting firm operations, you need people who already know how to work with AI, and how to give the right prompts and commands to AI. We'll also need people who know the types of mistakes AI typically makes; people who will know what things to review when AI gives you work back.
There's a new job category emerging: AI work reviewer. AI can be nearly perfect, but it's not 100% perfect. We need professionals who know how to review AI's work and fix the mistakes. An untrained person can review the work, but too slowly to preserve the efficiencies AI creates.
AI also makes it easier to give better instructions and to create a library of instructional videos and manuals from Loom, Scribe and other tools. That library then trains new hires without using up manpower. Yet another way AI supercharges offshoring.
You can build templates that scale
Once you figure out how to get great results from your favorite AI platform, you can reuse that prompt as a template. It saves time and gives you consistent results. With offshore teams, you can do the same. Once you figure out how to brief them clearly, you can use the same instructions for similar tasks. The more you systematize your approach, the smoother everything runs.
As I've discussed in an
But when the language barrier is removed, you'll see supply go up exponentially. To that end, there's a voice AI platform called Krisp.AI that removes background noise and softens people's accents so it can make them sound like they're from middle America. (Disclaimer: The author receives no compensation or promotional consideration for products or services mentioned in this article.)
When offshoring took off post-Covid, the discussion was all around capacity. "I don't have enough people. Get me people, I don't care how much they cost." Cost savings were a bonus, not the driving force. But now when I present to accountants, we seem to spend the most time on the slide discussing offshoring costs or salaries. U.S. firms are hesitant to talk openly about comp because they don't want to be accused of shipping American jobs overseas. They're simply trying to serve clients well without raising prices. That's what's driving offshoring, and when you add AI to the equation, the margin savings compound.
Part of the PE playbook
Offshoring is a big part of the PE playbook as PE wants the firms it backs to cut costs and boost margins. This allows those firms to offer more competitive prices or more value at their current prices. Firms wishing to remain independent often recognize the value of offshoring but are hesitant to utilize it because of the very problems we discuss in this article — time zones, cultural barriers and communication issues. AI removes many of the issues associated with offshoring so independent firms can now try their hand at offshoring and better compete with PE-backed firms.
Earlier, I described a firm using offshore staff for business development during the slow season. Another example is firms utilizing AI to do basic tax prep. One firm I know upskilled their offshore people to also do reviews. They weren't able to find enough reviewers among their U.S. team. So now the U.S. team only does complex reviews. The simpler reviews are done offshore, and tax prep done by AI plus offshore.
The future is not "AI vs. offshoring;" it's "AI + offshoring." Firms that combine the two will be more competitive and profitable. AI will reduce the number of people needed to get the work done but will increase the value of work done by both onshore and offshore teams. With more capacity freed up both at home and offshore, the firm can take on more clients.
