Taking CAS Offshore

As CAS practices face up against the same capacity challenges as every other area of accounting, many of them are turning to offshoring/outsourcing partners to help. What sort of resources and opportunities are available to them? And how are their staffing/outsourcing needs different?


Transcription:

Danielle Lee (00:14):

Hello everyone, and welcome to the next session of the CAS Summit: Taking CAS Offshore. In this session, we're going to talk about how CAS practices are facing some of the same capacity challenges that other areas in accounting are, and many of them are turning to offshoring and outsourcing partners to help. We're going to look at the resources and opportunities that are available and how these staffing and outsourcing needs are different when it comes to CAS practices. Before I introduce the great panelists we have today, just some CPE information to quickly go over. To ensure everyone gets their CPE credit, attendees must remain for the duration of the session. They must participate in the audience engagement features, such as polling, during the sessions, and attendees must complete and submit the CPE evaluation form no later than August 18th, 2025.

(01:09):

Once the form is submitted, you'll receive a certificate of completion from Aris two weeks post-event. I am very pleased to introduce our two speakers. Today we have Kristen Keats, Owner of Sherwood Tax and Accounting, and Tori Meyer. She is Principal and Director of Outsourced Accounting and Advisory Services at BeachFleischman. You may have noticed we had another panelist scheduled, but unfortunately, he had a minor family emergency, but we have a great panel of speakers for you today, and I'll turn to them now to introduce themselves and give a little more background. Kristen, starting with you.

Kristen Keats (01:44):

Hi, my name is Kristen Keats, and I'm a CPA in Sherwood, Oregon. I am the owner of Sherwood Tax and Accounting, as Danielle said. I also founded Breakaway Bookkeeping and Advising in 2019, and we have worked with outsourced offshore teams in India since the time of the founding in 2019. Then in 2021, we started our own outsourced staffing agency in Guadalajara, Mexico. It's called Ccia, LLC.

Danielle Lee (02:16):

Great. And Tori, can you tell us a little bit about yourself?

Victoria (Tori) Meyer (02:19):

Thank you. I'm Tori Meyer. I'm a principal at BeachFleischman in Tucson, Arizona. We're about a 200-person firm, and we have 26 people, including our offshore folks, in our CAS department. We are relatively new to offshoring. We purchased a firm in November of '24 in Celaya, Mexico.

Danielle Lee (02:44):

Okay, great. Well, thank you both for being here with us today. We really appreciate it. It is actually now time for the first polling question before I dive into some of my questions for the two of you. So if you can launch that first polling question. The question is, "Does your firm outsource any work?" So you have four choices here. The choices are "Not at all," "A little," "Fair amount," or "A lot." Once again, we're just taking a pulse of today's audience to see if you outsource any work. It'll be interesting to see what everyone's starting point is here today if you're considering it, looking into it, or if you do currently outsource any work. The choices again are "Not at all," "A little," "Fair amount," or "A lot."

(03:42):

We'll give everyone adequate time to get those in. I think I failed to introduce myself at the beginning of the session. By the way, my name is Danielle Lee; I'm managing editor at Accounting Today. I'm very happy to be moderating today to discuss this very timely topic with everybody. We'll wait and give everyone adequate time to make sure they get that CPE credit, get those responses in, and as a reminder, you can put questions into the Q&A panel, and we should have some time to address those questions and direct them to our speakers today. So don't be afraid to put those in throughout the session, but for now, we're getting close to closing out the poll. Again, we're just asking if your firm outsources any work: "Not at all," "A little," "Fair amount," or "A lot." It looks like we can go ahead and close out that poll. I'll give everyone a final 5, 4, 3, 2, 1, and let's pull up those results, see kind of the makeup of our audience today. It looks like 57% said "Not at all," 29% "A little," 11% "A fair amount," and 3% "A lot." So everyone's in the right place to learn more about this, so that's perfect. Now let me get back to our speakers. I'm curious, what sort of tasks and work are suited for offshoring and outsourcing? Tori, I'll go to you first.

Victoria (Tori) Meyer (05:33):

So we found in our practice that it's the staff level work. We're new, so the folks we work with are entry-level accounting at the time. I believe, based on their skill set, they can grow to do all kinds of advisory work for us.

Danielle Lee (05:54):

Okay, great. And Kristen?

Kristen Keats (05:56):

Yeah, when we first started outsourcing, I would say I agree, it was really at the staff level, the really beginning level. But since now we've got a few years under our belt, we've found that our team really has progressed and grown and been able to do more and more. So we now have folks who, while they started out as a staff, they're really more at the senior level and doing review and training of other team members. We're really optimistic that the sky's the limit as far as their growth. They want to keep learning and growing, and provided that their English skills are good, we really don't see a reason why they couldn't advance and manage a client relationship at some point. So, yeah, the sky's the limit for us.

Danielle Lee (06:45):

That's great. Speaking of that advancement, is that something that just kind of came naturally with time and development and training?

Kristen Keats (06:52):

Yeah, exactly. It's something that I found that our team... It's always great to have these goalposts so they can know what they're trying to achieve to get to the next level. That was something that was really, really important that we realized right away: to have really concrete job descriptions saying, "Okay, this is the role that you're hired in for now. Here are all the expectations, and here are the expectations to get to the next level." Because if they don't know, and maybe they've just been there for a year or two and they think, "Oh, I should be getting a promotion now," you really have some firm benchmarks to say, "Yes, you've met this target," or "No, you're still falling a little short here before we can make that next promotion." So the more clear and concise job descriptions and benchmarks you can have, the better off it'll be easier to have those conversations.

Danielle Lee (07:43):

Great. Makes a lot of sense to be very clear and communicative about that. Great. On the flip side of the tasks that are well suited for it, are there particular tasks or types of work that are more challenging to offshore or outsource? And I'll go to you first, Kristen.

Kristen Keats (08:02):

Yeah, I mean, I would say probably the biggest sticking point I see, not just in our practices but with some of the others, because as I said, we now have a staffing agency, and we have other accounting firms that are members of that. Everybody's a little different in what they're comfortable with their team handling. I would say one big point is whether we allow them to have direct client communication. That's usually something that you really want to get some time and training and really trust with your team member before you're putting them in front of a client. But as far as skill set, we are finding that the skills are really across the board. I know we're here on a CAS platform because I would say US tax is really a tough one to train if folks don't have experience on that. But as far as CAS goes, that's really nice about using outsourcing for CAS practices because it's a little more universal. So once they understand the software—so you're using QuickBooks, Xero, whatever you're using—a lot of times that's the biggest hurdle because if we're hiring folks with accounting degrees, they understand the theory and the concepts that we're trying to do.

Danielle Lee (09:13):

Okay, great. That makes a lot of sense. And Tori, what have you found to be challenging to outsource?

Victoria (Tori) Meyer (09:20):

I think the similar issues as Kristen has had, but we do bill pay. That's hard for them to do because of the location, and then some client communication is they struggle with that. So we're constantly working on that. Fortunately, one thing that's happened with my team is I have several bilingual people here in this Tucson office, so that really helps with training them, and I think that will continue to help them grow in the future.

Danielle Lee (09:58):

Okay, great. And you mentioned working on that communication. How are you doing that?

Victoria (Tori) Meyer (10:05):

They had a different communication with their former firm; they didn't really have a review process. So we're constantly working with them to communicate on, "Okay, these are the processes here. We have to step through this. This has to be reviewed." It's just more structured than they're used to. Also, they have more than one supervisor. So from their point, that's what they've said to me is having more than one supervisor and just getting all the processes down.

Danielle Lee (10:41):

Great. Along those same lines, are there any recommendations both of you have for combating some of these challenges for some of these tasks that might not be best suited for offshoring or outsourcing? You kind of touched on it already, but do you have any further recommendations? Kristen, I'll go to you.

Kristen Keats (10:59):

Yeah, I mean, I think first of all, it's going to be really, really important before you even ever get started to review your own internal processes and documentation. As soon as you start outsourcing to a team, and a lot of us learned this during the pandemic, when you're not in the office, it's a lot harder to have that communication. So you're going to see where all the holes are in your standard operating procedures. So I would say as much as you can have those nailed down—for example, we use Carbon, and so everything is just in our task steps. The other thing I do is give them some tools. We give them a Grammarly subscription. As we said, we always want that client communication, that point of trust, because for me personally, I'm very transparent about the fact that I use an outsourced team.

(11:45):

My dedicated team is on the website. We make it really clear about who we work with, and sometimes it does give clients pause. Sometimes they can be nervous. So the more that you can help with the confidence in that by having the English be really good and understandable. So, yeah, I like to give them the tools to be able to do that. Grammarly is great because it can help them craft the emails. Even ChatGPT has been great. I say, just run it through ChatGPT. Even if you say for my native Spanish speakers, I say just run it through to make sure the English makes sense.

Danielle Lee (12:20):

Great. Great. And Tori, do you have any further recommendations on that front?

Victoria (Tori) Meyer (12:25):

I just think communication. That's the biggest piece I think in this whole offshore is you have to be communicating, and it's work. It's not "I'm going to send this to this person, and it's going to magically be correct." So I think that's the big key.

Danielle Lee (12:43):

Okay, great. Thank you both. It's now time for the second polling question, so let's get that launched. Before we get back into this conversation, your second polling question is going to be, "What is your primary concern with outsourcing?" So there's quite a few choices here: "Data security," "Quality concerns," "Finding the right partner," "Client perceptions," "International issues," or "Other." For this poll, it's just a select one. You might have multiple concerns, but if you do, please select the one that is your primary concern with outsourcing. I'm sure some of these concerns we'll touch on. We have already gotten into some of them, but when you think about outsourcing, what is the primary concern that springs to mind? We'll give everyone enough time to get those responses locked in. So once again, the choices are "Data security," "Quality concerns," "Finding the right partner," "Client perceptions," "International issues," or "Other."

(13:55):

Please select from one of the six choices here and click submit to make sure your response goes through for CPE credit. Give everyone a final few seconds to get those responses in. A final 5, 4, 3, 2, 1. Let's go ahead and close that poll and see kind of which areas, today's audience, where they see the most concern when it comes to outsourcing. It looks like it kind of runs the gamut here, though Quality concerns is the favorite at 32%, but Data security is not far behind, Finding the right partner, Client perceptions. So a good myriad of concerns. Does that surprise you, Kristen and Tori, that these are concerns?

Kristen Keats (14:51):

Yeah, those are the top two we hear the most about.

Danielle Lee (14:54):

That makes sense. So switching to one of those concerns that we talked about was finding the right partner. So kind of pivoting into that part of the conversation, how do you pick a good offshore partner? Tori, I'll go to you first.

Victoria (Tori) Meyer (15:11):

I think you have to meet with them, see if they're a good fit, and they have to want to work with you, and they have to understand the laws of that country. One thing is the employment laws in Mexico are very different from here. So I just think seeing if they're a good fit, just like you would any other if you did a merger or were going to bring a partner into your firm, you have to look at it in the same manner and care that you would do with any kind of partner that you're going to pick to be partnered with.

Danielle Lee (15:52):

Great. Great. And Kristen?

Kristen Keats (15:55):

Yeah, I agree. I mean, for me personally, especially when we were looking at, when we founded Breakaway, and we were looking at really partnering with someone for the whole firm, I actually went to India, visited the team, got a good idea of how they live. It was really important to me to have core values alignment with the partners that we work with. So we were able to do that and just know that everybody's really happy and they're truly enjoying their job. I mean, you can learn things on Zoom, but there's just nothing like actually visiting in person and really getting to see where folks work, what their work environment is like, what the town is like. There's just no substitute for that. That was part of the reason why Mexico was really attractive to us, because it was really cool to visit India, but it is not an easy place to get to, and the jet lag is murder, and even just having the time difference.

(16:54):

So from the West Coast, it's about a 12-hour time difference. So even just meeting in real-time is really, really tough to do. That was part of what attracted us to Mexico. When we were initially getting started, we partnered with a staffing agency and kind of went through the same process of just vetting this out: are they getting the benefits that we want? We went down there to visit. But yeah, like Tori said, there's so much importance to having the... I mean, these are your boots on the ground people. So there's so much trust that is placed in the folks that are there in the local environment.

Danielle Lee (17:32):

Great. So you both mentioned the alignment of core values, the cultural fit, the trust aspect. So along those lines, how much do you need to manage this relationship with your offshore partners? Kristen, I'll turn back to you.

Kristen Keats (17:48):

Well, luckily, now my main partner is ourselves and the entity that we own. But yeah, I mean, I would say even for our clients, as an owner of an outsourced staffing agency, I really want to engage with our other accounting firm clients on a very regular basis. We invite them to come visit and do the whole vetting and really interact with their team as much as possible. We do annual performance reviews that go both ways so that we give the client a chance to review their staff person and their staff person—not to review their client—but just to make sure that the task that they're doing is what the original job description was, that they're being treated by the client in the way that's consistent with our core values, and then also for the client to just give us feedback in general. I would say I would expect that for many outsourced partners, like Tori said, continual communication about what's working, what's not.

(18:45):

Because the worst thing that happens is if you have this relationship with a team member for maybe three or six months, and everything seems fine on our regular check-ins, and then all of a sudden someone says, "Oh, this isn't working," or "The person isn't performing." It's terrible for everybody here. We've got this person who is losing their job security, and then we also didn't have a chance to make it right. So I would say that continual feedback with the staff person as well as with the outsourcing partner is critical to success.

Danielle Lee (19:18):

Great advice. Tori, how do you manage that relationship?

Victoria (Tori) Meyer (19:22):

I'm sorry, can you repeat that? I didn't hear you.

Danielle Lee (19:25):

Yeah, sure. No problem. How much do you need to continue to manage your relationship with your offshore partners?

Victoria (Tori) Meyer (19:33):

Just like Kristen, you have to manage it a lot. Fortunately, we're only three hours from Celaya, so we have our partner; he comes up here once a month. We meet, we talk about... We have an HR person also down there, so both of them will come up, and we will meet and talk about any struggles they're having. The staff are very open about their feelings of what they want, training they want, what they need to make themselves successful. So that's really great. I just think constant communication is the key.

Kristen Keats (20:15):

Can I just add one more thing that we've seen that can help be successful? Especially in larger firms, it's really helpful to have, if you're just going into outsourcing/offshoring, and you've never done this before, in my experience, it's very important to have what we call a champion in your office that's going to oversee that relationship. Because we've been saying, some people might get overwhelmed by what we're saying. It's like, "Oh, it's a lot to manage," and you're thinking, "I already have a lot to manage. This is supposed to make my life easier." And it really does, but it's an investment that you make. It's an investment that you make in your time. Then to also have that champion, that liaison, whatever you want to call it, someone that's really there to be the helper for that outsourced team and to make sure that their needs are getting met and that the relationship is going smoothly.

Victoria (Tori) Meyer (21:09):

Great. I can piggyback off what Kristen said. We also have a buddy mentor system. So every employee in Hermosillo has two people they can go to anytime to talk about things. That's also been very helpful. Just like at our firm, we have the same system. So that's been very helpful also.

Danielle Lee (21:36):

Yeah, great advice. As we saw from the polling question, it looks like some people are still kind of just exploring outsourcing and offshoring. So those are great starting points to get a little more comfortable with changing into that operational model. You both touched on advice for building that strong relationship. Is there anything else you would particularly impart to today's attendees in terms of building that relationship, keeping that relationship strong with your outsourcing partner?

Kristen Keats (22:05):

The other thing that we do that I think has been super helpful in addition to having a buddy system, but sometimes it can be a lot on the buddies, especially when we get to the thick of busy seasons or busy times. We implemented a couple of things. Every other day, we have a whole team standup, and that's the US team and the Mexico team, just so everybody can touch base on what they're working on. For larger firms, I would imagine it would be by divisions or just the individual teams that you have. Then we also have what we call office hours. So you can bring all your questions, and that way everybody can hear the questions. It's almost like these little lessons of, "Oh, hey, you gave me this review point back on this thing," or "You gave me notes on this, but I didn't quite understand what you meant."

(22:48):

It gives us a chance to really talk through because I think we can move really fast when we're just trying to get work out the door. So I think to have those little abilities to pause. On top of that, we also have our Slack channel so that folks really can message back and forth and get support in that way. So we have different channels for folks getting support. I just want to emphasize that while again, yes, it's an investment, you can kind of set up systems to take it off. So it's not all Tori, it's not all Kristen. It can kind of spread the load across the whole team to train everybody.

Danielle Lee (23:23):

Great. And Tori, did you have anything else to add?

Victoria (Tori) Meyer (23:27):

No, the same. Similar, yeah.

Danielle Lee (23:31):

Seems like it goes back to that theme that we've talked about, about open communication and making sure everyone's on the same page. That's great. Let's pull up the third polling question now. Your third polling question is, "Has your firm ever considered setting up your own offshore entity?" We saw that not everyone has one currently, but we're curious if you're considering it. It would make sense if you're in today's session. Your choices here are: "Yes, but we decided against it," "Yes, and we're setting it up now," "Yes, and we've already set it up," or "No." For this question, you have four choices to choose from that best describes whether your firm has ever considered setting up your own offshore entity. Once again, those choices are: "Yes, but we decided against it," "Yes, and we're setting it up now," "Yes, and we've already set it up," or "No." As everyone gets those responses in, just a reminder that you can put your questions into the Q&A panel. We've had some great questions come in so far that's still available to you throughout the session. We have some great speakers obviously here that can provide some really great insights to some of the questions you have coming in, so keep them coming. But first, let's close out this third polling question. Give everyone a final few moments to get those responses in. A final 5, 4, 3, 2, 1.

(25:17):

Let's close out the poll and see how those responses shook out. It looks like "No" is the favorite, 71%, but the rest of today's attendees are considering it in some capacity, whether they're currently setting it up, already set up, or considered it. So very interesting. We will turn back to the presentation. My next question for the two of you: can you kind of just walk us behind the scenes of creating your own offshore entity? Can you just kind of talk about that and share your insights there, starting with Tori?

Victoria (Tori) Meyer (25:59):

So what we did is we have one of our partners here who knew about this entity; it's called Quadra. He had been in contact with the partner. He was friends with him for a long time. So he brought it to the firm, and we tried it out for, I'd say, a couple of years to see if it would work. They mostly used it in tax and accounting and auditing, the staff folks. Then I just recently did the bookkeeping piece, the accounting piece. It was kind of easy to do that piece of it, but getting the structure in place to merge it into our firm was the difficult part.

Danielle Lee (26:47):

Kristen,

Kristen Keats (26:50):

We have a theme. My partners and I have a mantra that we use all the time: it's "crawl, walk, run." Once we decided that we wanted to go into Mexico, I think I mentioned earlier, we work with a staffing agency. So that was crawling. We didn't have to have a legal entity in there. We could just work through the staffing agency to hire our folks. They would manage all the benefits and all of the risk of the employment. We did that for the first couple of years. Initially, we were really just setting it up to support our own firm, so to support Breakaway/Sherwood Tax. Then once we got a lot of interest from just some of the other folks in our little accounting world that they were interested in it, we started to bring on other clients.

(27:34):

Before we knew it, I want to say we had maybe about 25 staff people. At that time, we realized that working with the staffing agency, although it was great, it wasn't the best as far as the benefits and really treating our folks the way we would want to attract the best possible talent. So it was at that time that we started looking at setting up our own entity. It was one of the things that was a hurdle, which by that time, let me think, we had probably had it running for a couple of years. So we had a person that was really a position of trust, because like I said, we need that person that's boots on the ground that can really sign documents. A lot of things are not as digitized as they are in the US.

(28:25):

There's a lot of stuff that needs an in-person signature for going to the bank or going to the attorney's office. So we really needed to have a person of trust in there to be able to do that. So we ended up forming our own entity in Mexico in 2023. It's been great. Not without its bumps in the road, we've definitely learned a lot. Like Tori was saying, we learned a lot about employment laws, and we learned a lot about all the things that it takes to run a business in Mexico. But because we do have a team of accountants down there, like external accountants in Mexico, we have a team of lawyers there to support us. So those relationships have really been critical in setting up and maintaining the entity. I also, because although I'm a tax person, I had never done international tax before, so that's when I'm like, "Okay, I'm no longer preparing our own tax return anymore." So we outsourced that tax preparation too to make sure that we were staying in compliance with the tax laws, too.

Danielle Lee (29:30):

Great. Definitely. You mentioned servicing other CPA firms. So your offshore units, they currently serve those other CPA firms. What does that look like, and how does that work?

Kristen Keats (29:42):

Yeah, we do. Yes. It was actually part of my vision because when I, back in, I think in 2018 was when I first started or had the experience of working with a team in India, I thought, and I had come from a place of having my own accounting firm before that, or working for small firms, and it was such a game changer for me honestly, to have access to a talented team like that, that it really became a passion of mine to make that type of resource available to small firms. Because at the time, it was really only the Big Four or really large regional firms who were doing offshoring at that time. It was just such a game changer that that was part of what my partner and I started ideating about. It's like, "How can we make this accessible to the small firm owner?"

(30:27):

That was really part of my vision when we founded Ccia, is to have it be easier for smaller accounting firms. What we found is it's pretty tough because a lot of smaller firms don't have those processes in place, number one. Number two, they really need to commit to it as a strategy and not just like, "Oh, we'll try it out and see if it works," because it will never feel like it's working. It's just like any new thing. It's going to feel terrible until you get a rhythm and until you figure it out. So you really have to be committed to it. We work with folks, and I know it's too bad Lawrence couldn't be here because he's awesome at working with folks and making sure that they're prepared. So check him out on his bio because he has a great service that he does for people that know that they want to commit to this as a strategy. They want to make sure that they're prepared and to make sure that it's successful.

(31:18):

Because if you don't put all that energy and effort in at the beginning, it's a guarantee that it won't be successful. What's been interesting for us is that while we do have that channel, I guess, with public accounting firms, we actually, just by being located in Mexico, we've become more back office accounting for private companies. We've actually got a lot of folks working with pretty good success as the back office accounting for some private companies. That's just been an interesting pivot that was not expected in the original intention, but that's how it goes as a business sometimes.

Danielle Lee (31:55):

Definitely keeps things exciting. It's great that you have that obviously, that practitioner perspective to give to other firms. It sounds like you kind of have to remain strong at the beginning there and power through maybe some employment law nuances. As you mentioned, just accept that things might be terrible, but they'll get better. So those are good business lessons in general, but especially when it comes to CAS outsourcing and offshoring. And Tori, do you serve other CPA firms?

Victoria (Tori) Meyer (32:24):

No. That is the vision eventually for our Celaya office, but right now, I think we're in the crawl stage of that. I want to get really good at having them help with our clients that we serve in our CAS department, and then potentially in the future look at that.

Danielle Lee (32:49):

Oh, great. Great.

Victoria (Tori) Meyer (32:50):

I think it is a great talent source for all firms.

Danielle Lee (32:55):

Absolutely.

Victoria (Tori) Meyer (32:56):

But you really do have to be committed to it.

Danielle Lee (33:02):

It sounds like it. Again, having that practitioner perspective, it's really helpful to share that with other firms. You both mentioned maybe some language barriers and visiting these other countries. Can you talk about maybe some of the cultural differences or nuances you have in working with your offshore partners and how you handle those? Kristen, I'll turn to you first.

Kristen Keats (33:27):

Yeah. What I found is there are so many things, and luckily, now as a team, we're pretty jelled, so we can laugh about it. I'll give an example communication-wise. Like I said, we use Slack. Sometimes I'll get a message that'll just say, "Good morning, Kristen. Good morning. How are you today? Great." I'm like, "I know you're messaging me for something." When I do it on my end, I'll just cut to the chase of like, "Hey, Liz, have you had a chance to look at this thing?" They were kind of like, "You guys are so rude. You don't even say good morning, and you're just going to..." There's this little cultural thing, especially as accountants; we're so used to being efficient, and we work in six-minute increments, so we're always just like, "Go, go, go, go, go." It's been good for me, though.

(34:13):

I think Mexico time is real. To have that little "Good morning, Liz. Yes, I'm doing great. How are you?" Just take a minute. It just takes a minute to do that. So there's been literal little cultural things like that that we've just had to work through, but it ends up being kind of fun or funny. As part of our weekly meetings, one of the things that we do is we exchange quotes or phrases at the beginning, and we kind of talk about what this phrase is and why it's important. We alternate between English and Spanish. So us on the US team, I think all of us are on Duolingo, working to learn our Spanish. I'm 1,500 days in. I understand a lot now. Speaking it's really hard. So yeah, going there is important to try to work on my speaking skills, too, but it gives you so much respect for these folks that are not only learning another language, but learning a technical skill like this in another language.

(35:10):

It just blows my mind. It's funny; I see them get frustrated with themselves, and I'm just like, "Okay, just so you know." They're like, "Oh, my English is so bad." I'm like, "Well, it's always going to be better than my Spanish." Just so much respect for you even trying and applying for a job where you're speaking in English the whole day. I have so much respect for them. But yeah, now we've gotten to the point where we just really view it as, and honestly, I see it as one of the benefits of outsourcing, and it was the same with the India team. You just learn so much about other cultures and how folks live when you work with these teams. It's been such an amazing experience, honestly, just even for personal growth, to be able to work with these folks and learn how they live and their cultures and stuff. It's just been so cool.

Danielle Lee (35:56):

That's great. I would love to sit in on some of those cultural exchanges. That's really great to have that added bonus of some personal development that comes with managing and nurturing these relationships. Tori, what about you? What kind of cultural nuances or differences have you found?

Victoria (Tori) Meyer (36:22):

Well, like Kristen was saying, we're like, "Let's get it done now," and they're not like that. I have one of my team members, she's like, "I don't really want to call you Tori." I'm like, "What?" And she's like, "I'm not used to calling my boss by their first name." And I'm like, "Okay." She goes, "Can I call you Boss Lady?" I'm like, "Sure." So it's just that kind of stuff that I had no idea. I would never even think about that. The other thing is just helping, because we do have a lot of Spanish-speaking clients, so helping communicate with them is also a part of this. The one thing that I took away from this, and I never realized this, is when you're not an English speaker, and your native language is something else, when I'm talking to you, you're taking that, putting it in your brain, converting it to Spanish, then spitting it back out to me in English. So that's a lot of work. I have a lot of... I think that's just fantastic that you would even be willing to do that. It's just learning all their different, all different, and they learn from us, too. We don't. So that's the cultural. They're much nicer.

Kristen Keats (37:44):

They're way to the chase. So much more polite. Yeah. I just feel so, and I just love the culture because they so value family. They so value personal time, and I think we could definitely take a page out of that book, especially in the accounting industry, to just enjoy life. It's been really great for them.

Danielle Lee (38:10):

Oh, that's wonderful. Great. Thanks for sharing. We have some great audience questions that are coming in. Someone is asking how your clients feel about your firm using offshoring. I know Kristen, you had mentioned you're very open about that. How do your clients react to that, and how do you kind of communicate this to clients? I'll start with you, Kristen.

Kristen Keats (38:31):

That's one of the things. At this point, when we initially rolled it out, of course, that's the hardest time because like I said, we're all about transparency, and also being a tax firm, too, we are required to disclose it. So we did get pushback. We didn't get as much pushback as I expected to get, to be honest. I think now, this was in 2021. I think a lot of folks were just happy to be getting their work done at that point. But yeah, I'm not going to say we didn't lose clients. We did. There were some folks who did not want to sign off on it, or there are some people that had suspicions about it. But I mean, to be honest, while I understand it, there's a part of me that just was concerned, too, that because these disclosure requirements exist, whether you're in Mexico or whether you're in Canada.

(39:29):

Sometimes I would ask, "By the way, that means if I'm traveling to Canada, I would still have to have that disclosure authorization, just because anytime your information is outside the country, you're required for that." So I kind of would pose a question, "Well, would it be different if you were just signing off on a Canadian versus a Mexican?" So I kind of just have people reframe and just think about why they have a reservation about it, even if I cared enough to drill down. But we were so busy at the time, it didn't really matter. So yeah, now at this point, we've gotten to where before I even have an initial meeting with a client, I give them a heads-up of like, "Hey, here's how we work. Go to this page on our website and see who our entire team is." So they have a chance to opt out before I even have a meeting with them. We're just really super clear about it from the very beginning.

Danielle Lee (40:19):

Okay, great. And Tori, what has client reaction and feedback been like?

Victoria (Tori) Meyer (40:25):

Mixed. I've had some clients that have said, "I don't want my work offshore," and I've worked around that. Most of them really don't have an opinion if their work's getting done. If you travel to Italy, you've got to have that disclosure. So it's in all of our engagement letters. I don't really directly say, "You're being serviced." I look at those people as employees in Celaya. We have an office there, and how I run my business doesn't really... You shouldn't care as long as it's you're getting quality work. But they're concerned about, "Well, how's my bank account getting dealt with?" That kind of stuff. So we have lots of data security. We've done a big analysis on data and our security to make sure they have to log onto our VPN and all of that. So that's kind of how I've handled it.

Danielle Lee (41:26):

Great, thanks. We have another question just asking about the hiring process. Can you both take us behind the scenes on what that looks like at your firm?

Victoria (Tori) Meyer (41:38):

Sure. We have a person down, an HR person in Hermosillo. So I will communicate with her what I'm looking for, what level, if they need any kind of specific... I want a master's or a bachelor's, and then she starts working with candidates, and then I interview them, and that's how we do it.

Danielle Lee (42:04):

Kristen, what does that look like for you?

Kristen Keats (42:06):

Yeah, so for Ccia, what we do is we ask the clients for a job description, and I say, "Be as specific as you possibly can on that job description." So same thing. We have a recruiter that will go out and do a search, just like recruiters in the US would do through LinkedIn, Indeed, the usual ways that they find folks. Then they will set up... They usually vet people through. So it's just two or three interviews or two or three candidates that we ask the client to interview to make sure it's a culture fit. We do a whole background check and vetting process, which honestly, in Mexico, it's a lot more intense than even we have in the US. They do a home visit. They do go deep. I didn't even know at first that that's what a background check entailed. So I think that can help give people comfort, though, too.

(42:58):

It's like, "Okay, yeah, we do want to make sure that they have good internet connection." We do. A lot of our folks, we have an office, but some of them still work remote. We formed this company during the pandemic, so that was super fun to kind of have that learning curve on everything else. So, yeah, we go through this whole process, and then once they get hired, there's a 90-day window where we're doing a whole lot of check-ins, because when we talked about Mexico employment law, that 90 days is kind of a magic number where you can terminate someone without cause, and there's not as many repercussions than if you hire someone past the 90 days. They have pretty strict severance laws about the things you have to pay out. So we're really looking closely in those first 90 days to make sure it's a good fit.

Danielle Lee (43:44):

Okay, great. We have some questions here about the upfront costs that are involved. I think you both have touched on that a little bit, and I'd kind of add onto that question: Is there kind of unexpected costs that people don't think about when setting up these kind of entities? Kristen, I'll go to you first. What kind of upfront costs can people expect just from a general perspective?

Kristen Keats (44:07):

Yeah, so I would say if you were going through someone like us to hire someone, the upfront costs are we ask for a month's salary, plus we charge a fee because we're giving them a computer and monitors and whatever the tech is that they need. So we charge upfront for that. But I think what they're also alluding to is, so there's the hard costs like that, that it's kind of up to get it up and running, but then there's the soft cost of just making sure that you have that time and capacity to invest. To be honest, it's not different than any other new hire that you would have in your firm. It's not like it takes so much more time, in my opinion, to have an outsourced employee, other than they might need a little extra, depending on what experience level you normally hire in.

(44:59):

For example, if you're hiring a staff accountant, maybe in the US that person, if you hired an experienced person, they would already have QuickBooks Online experience. But in Mexico, they're probably not going to have that. But if they're a good accountant, a lot of times they'll pick it up. My lead bookkeeper, she picked it up within the first month, and she loved it because it was actually way more user-friendly than any of the kind of archaic systems that they use in Mexico. So now they use it, and they love it. So a lot of times I'll put them through just the training that the software offers as kind of just a learning for that. So I think just making sure you have the time and capacity to onboard properly, maybe just adding in a little extra for an outsourced employee.

Danielle Lee (45:42):

Great. And Tori, do you have any advice on that front in terms of upfront costs or what to expect?

Victoria (Tori) Meyer (45:49):

The legal fees are pretty high when you have your own office. All of the employees in Celaya do work in office, and just a lot of the same costs that Kristen talked about.

Danielle Lee (46:05):

Great. Speaking of kind of investment, you both have touched on some of the systems and the technologies you use. Someone was asking if you have recommendations for other types of technology besides Grammarly or other processes that have been mentioned in terms of just kind of streamlining and managing offshoring.

Victoria (Tori) Meyer (46:27):

We just use our... They're a staff accountant here in Tucson, so they have all the same software we have. So,

Kristen Keats (46:37):

Yeah, I mean for us, I think I mentioned Carbon earlier, but any kind of practice management is going to be critical to working with an outsourced team. We're using, we have a Loom library also, so that when we're doing trainings, or we've put things out there of how to create a new client or here's how you do a bank reconciliation, we have a Loom library, too, that's been really helpful. So, yeah, just like Tori said, it's a lot of the tech that you're already using in your firm, just kind of really maximizing it to have it be, and especially if you're working with, I know some of the folks that are watching, you maybe consider working with teams in the Philippines or India. So having asynchronous communication is really important in working with those teams. So a lot of times for us, Loom was just mission-critical.

(47:27):

If we got... because a lot of times they're working at our nighttime, so you might get there in the morning, and you've got a project in, and you need to maybe have some changes to it or you want to... So doing a quick Loom video saying, "Hey, thanks for doing this work. Here are all the things that I noticed. Here are the things I'd like to change." That way they have something to go back to and refer back to to continue that learning because you don't want us to just keep seeing the same mistakes all the time. So I think that adds a little extra layer if you have that time difference that you'll have to account for some of the more asynchronous. But again, for us, we do a lot of that in Carbon. Over in Breakaway, they use Asana, which is the same thing. So that way you can have notes back and forth to each other, and it's all linked in that project. So then the next month when it comes around and we're doing month-end close, you can see all the notes and changes that were made, so you're not just recreating the wheel every month.

Danielle Lee (48:24):

Okay, great. We're getting towards the end of the hour, but we had one question just asking how you're feeling about offshore partnerships looking into the future, and that dovetails nicely into what I was going to ask about what's next for both of your offshore operations and maybe what trends or what people can expect on the horizon for this dynamic of offshoring and outsourcing CAS? That's a pretty general question, but there are any thoughts in terms of just looking ahead and what to expect?

Kristen Keats (48:56):

I mean, for us, I don't see it going away. It's definitely a part of our strategy, and I think it's great to have Accounting Today having this on your platform, getting the word out there that this is an option. I think, like I said before, it's really a passion of mine to make it accessible to firms just to know that you've got this... I mean, just with staffing being such a difficult thing right now, it seems to be loosening up a little bit in the US, but it's just always going to be hard to find really talented, trained individuals. So I just see it increasing. It's not going anywhere as far as I can tell.

Danielle Lee (49:32):

So you're all in the right place to be hearing about this.

Victoria (Tori) Meyer (49:35):

Yeah, we're fully invested in moving it forward and keeping it. We will definitely be using it for our entry-level staff in our accounting department, continue to just grow that piece in Celaya.

Danielle Lee (49:52):

Great. That's a great note to end on. Tori and Kristen, I want to thank you so much for sharing all your insight, your expertise, your experience with us. It's been really helpful, and I want to thank all of our attendees for joining us today. Thank you again so much.

Kristen Keats (50:08):

Thank you. This was fun. Thank you. It was great. Thank you.