Tax Preparation Outsourcing 101: The Ultimate Guide for CPA firms

Statistics pointed out that the U.S. government collected $4.05 trillion in revenue from taxes in 2021. Of which, a whopping $2.04 trillion was raised only from individual income taxes. This clearly indicates the massive market and opportunity that lies ahead of CPAs and accounting firms. From keeping track of the changing tax regulations and connecting with clients to assembling the necessary forms and heaves of paperwork, accountants are constantly on their toes.

  • Engaging in outsourced tax preparation often proves to be cost-efficient for firms looking to leverage specialized tax expertise and technology while managing operational costs.
  • Observe every outsourced return or project through each step of the process using CCH Axcess Workflow and communicate with Xpitax® professionals from anywhere, at anytime.
  • However, not every CPA firm deciding to take the outsourcing path knows all the benefits of outsourced tax preparation services.
  • We also adhere to stringent SLAs and high-quality standards when it comes to data security.
  • I wish I had known how my clients would react to signing the 7216 disclosure, Consent to Disclosure of Use of Information by Preparers of Returns, so that I could have communicated more clearly.

It can reduce expenses and increase productivity without compromising the quality of work. Such strategies consist of standards, procedures, and regulations that dictate factors like who you partner with and how much you pay them. One significant difference between offshore and onshore outsourcing is consent.

Benefits of Tax Preparation Outsourcing to QXAS:

On-time work delivery and exceptional support are key traits of an ideal outsourcing service provider. Not only will they assure on-time deliverables and robust results, but they will also be the best support system, so you can always rely on them to complete your tasks. Accounting firms need to have some clear key performance indicators to help them decide if their outsourcing engagement model is working well. Measuring the benefits and progress and assessing the risks of your firm’s outsourcing model can help you take corrective steps at the right time if staffing expectations aren’t being met. You need to set up the project budget & payment terms and decide if you’re paying the outsourced service provider based on time worked or per-project basis. It is vital to define deliverables before commencing the project, and you also need to budget for different business scenarios.

Most outsourcing vendors have full preparation as their only level of service, but select vendors offer partial outsourcing for OCR data verification only. It’s standard best practice to verify OCR data for accuracy after scanning tax documents. Compared to data entry, OCR verification takes a fraction of the time, but it still pulls preparers away from value-added work.

If you want to simplify tax preparation and scale your accounting firm and are wondering how our professional and deadline-oriented tax outsourcing services can help, just book a call. This isn’t true if you choose an outsourcing partner with airtight data security measures that use robust and secure information technology systems. The best outsourcing service providers will be cyber essential, ISO certified, and fully compliant with information security.

Financial planning & analysis

Our team of professional CPA’s and Service providers, follow the same ​methodology with the ultimate goal of compliance and meeting filing deadline. Tax is a complicated process that needs special attention and a keen eye for details. If you were to prepare the taxes on your own, it can take you more than 4 days to complete the task at hand.

Customs & duties management

On-demand, U.S.-based accountants to help increase your capacity and expedite your turnaround times. Our tax team has expertise in majorly all tax software like Taxcalc, IRIS, SAGE, CAPIUM, CCH, taxfiler, Digita, Alphatax, etc. but with a little bit of handholding, we can work with the uncommon ones too. Maximize your engagement margins and drive down operating costs by automating job sourcing to qualified professionals. Provide clients with much-needed tax guidance, be more proactive throughout the year and save critical time with a simplified, frictionless end-to-end client experience. More than just replacing manual processes, firm management supports clear visibility by creating a holistic view of the firm that supports increased productivity and firm growth in every department.

Take time to do extensive research that implies everything from market study and competitor analysis to zero in on the right outsourcing provider for your CPA firm. Once you finalize your outsourced tax preparation service provider, the next step is to select the candidate from the list of profiles they share. Global outsourcing service providers like QXAS allow you to schedule virtual interviews with their talent pool and choose the right resource to work as an extension of your CPA firm. Tax season can be a nightmarish time even for professional accounting firms, and it only worsens. The hurdles keep piling up from last-minute amendments, getting information and sending reminders to the client, and talent shortage. As an accounting firm owner, you are expected to meet all the deadlines while maintaining higher productivity and lower burnout.


After a few people said no to giving us permission to outsource, we created an email to ease their minds, and I also recorded a video to better explain what outsourcing means and what they can expect. We use cutting-edge tech and expert invoice processors to ensure stable and error-free results for your financial systems. With the latest invoicing software and invoice scanning technology, we maximize accuracy and processing times. Our services help you streamline your accounts receivable, including the management of outstanding invoices and updating of account activities. We ensure the proper management of the key financial functions that affect cash flow.

In an outsourced tax preparation service, a CPA firm hires an external service provider to handle their clients’ tax returns. This can include services such as tax planning, research, and preparation of returns. The goal of outsourcing tax preparation is often to save time and resources and to ensure that the tax returns are prepared accurately and in compliance with all relevant tax laws and regulations.

It’s important to confirm with the service provider which method they prefer to receive the documents. Also, make sure to keep a copy of all the documents submitted to the service provider for your own records. Pacific Accounting & Business Services (PABS) is focused on providing high-quality accounting, finance, and related back office services to businesses across the U.S. and Australia. We help enterprises manage every minute detail of payroll processing, such as compliance with regulations, frequency of check payments, and more. From the ground up, our network of tax accountants is entirely composed of licensed CPAs and EAs that are located within the U.S. These Pros have the experience and capability to facilitate any scope of work and can use the same software as your firm.

Compliance Services

We offer a variety of engagement models for clients to choose from, to suit their custom requirements. Outsourcing tax prep internationally has been common
practice for many years, but many misconceptions remain. Because our teams act the best free invoice & invoicing software 2020 as an extension of your in-house team and adjust to existing processes, there’s no need to change your existing processes. And with our SOC2 certifications, you know that engagement details and client information remain secure.

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