Domestic vs. International Outsourcing: What’s The Difference, How Can Either Help My Firm?


Domestic vs. International Outsourcing: What’s The Difference, How Can Either Help My Firm?

Outsourcing work is an effective way to allow your firm to grow without adding more overhead. After all, if you’re running a firm, growth is key however it shouldn’t come at the sake of adding more costs. 

That’s where outsourcing comes in; it allows you to clear work that would otherwise cause bottlenecks without staking time in searching for and employing new staff. But there’s a difference between outsourcing domestically and internationally. In this blog post, we’ll help you understand the difference between the two, and how you can take advantage of outsourcing services so your firm can grow and provide clients with more value-added services. 

What is outsourcing?

Outsourcing is acquiring goods or services from outside suppliers. Within the accounting world, outsourcing can be defined as using a third party that can provide services or make things that would normally be conducted in-house by the firm’s own staff. Outsourcing is a cost-cutting strategy used by businesses to reduce costs. As a result, it has the potential to effect a wide range of tasks, from customer service to manufacturing to the back office.

How can firms benefit from outsourcing?

Outsourcing may help firms save a lot of money on labor. When a firm utilizes outsourcing, it enlists the assistance of non-affiliated third parties to execute certain tasks. Companies providing outsourcing services typically set up compensation structures with their employees, enabling firms looking for outsourcing work to fulfill tasks for less money. As a result, the firm that elected to outsource is able to cut its labor expenditures.

Firms can use an outsourcing approach to better focus on the essential components of their business, in addition to cost reductions. Non-core operations can be outsourced to increase efficiency and productivity since another entity can do these minor jobs better than the firm can. This method may also result in shorter turnaround times, enhanced industry competitiveness, and lower overall operating costs.

An example of this within the accounting industry is a firm looking to outsource its bookkeeping or tax compliance services during busy periods in the year to free time for its staff. This would allow the firm to divert more time to other services like compliance or consulting work that would help generate more revenue without making sacrifices.

What is international outsourcing?

International outsourcing is when a firm contracts excess work to a company that has a team of workers located outside the country. Foreign outsourcing firms are typically based in nations where conducting business is substantially less expensive than in the United States. India, for example, is home to a slew of data- and information-processing outsourcing firms. Foreign outsourcing corporations recruit workers at cheaper rates than their American counterparts, lowering the operating costs of an American-based company.

From a firm’s perspective, this would mean sending your work overseas to a company that employs their own workers. Typically, you the firm owner would negotiate the terms of service with the outsourcing corporation. Once the terms are agreed on, the work will be handed over to the trained staff until its completion. 

What is domestic outsourcing? 

Domestic outsourcing does everything traditional, international outsourcing accomplishes but with one twist: all the work is outsourced to individuals who reside in your country. Simply put, domestic outsourcing, or onshore outsourcing, is the acquisition of services from someone who is not affiliated with a corporation but lives in the same nation. Onshore outsourcing is the polar opposite of offshore or international outsourcing, which involves hiring individuals or firms from outside the nation to provide services.

Unlike international outsourcing, onshore outsourcing enables a higher level of control and closer contact between the two companies. With that in mind, domestic outsourcing comes with plenty of advantages. Firms that elect to outsource their work domestically, rather than internationally, experience easier communication, fewer cultural differences, and money saved through the duration of the process. 

Firms can benefit from domestic outsourcing by partnering with an outsourcing company to send their tax compliance nad bookkeeping services to experienced professionals without the costs of bringing on new staff. For example, at Taxfyle we offer outsourcing services to help firms like yours have more time to focus on generating revenue. We differ from other outsourcing providers because our workforce is located entirely within the United States. 

How can Taxfyle help? 

When a firm partners with us for outsourcing work, we ensure that all the work in need of completion is routed to our CPAs and EAs, who are all located across the United States. Each of our Tax Pros are vetted to make sure they meet the right qualifications to handle a diverse set of accounting work. 

Whether your firm needs a few jobs cleared or thousands, we have thousands of certified accountants capable of handling the task. We provide upfront quotes and communicating through our platform means you don’t need to worry about unresolved questions or concerns. And if a job needs to be amended, you can communicate with us directly to ensure the process goes smoothly. 

Why let your firm’s staff lose time on tasks that can be completed through outsourcing? By partnering with Taxfyle, you’ll have the satisfaction of knowing your firm won’t lose a step without concerning yourself over work piling up. 

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