CPA Case Study 1


Our client is a mid-sized accountancy firm based in Dallas, Texas. The Client provides accounting, payroll and individual and corporate tax return preparation services to a diverse mix of small-medium businesses. The outsourcing project at our firm started with 5 end-clients and was extended to 80 end-clients in five months. It covered accounting (monthly bookkeeping, year-end closing and write-up services) and payroll services.

Reasons for Outsourcing
  • High costs associated with hiring and retaining qualified accountants and consultants
  • Fixed investments in infrastructure and man-power was constraining investments in marketing and new business development
  • Shortage of staff to manage year-end and tax-season peak loads
  • High costs of setting up and maintaining the required infrastructure
  • Inability to expand their high-end services like tax-consulting and financial planning due to existing services like bookkeeping and tax-return preparation
  • To increase price and service(turn-around time) competitiveness against other CPA firms in the same area
Outsourcing Solution
Production and Quality
  • Establishing the key deliverables for accounting and payroll services. Important parameters agreed upon were turn-around time and error rate in bookkeeping
  • Non adherence to deliverables as stated in Service Level Agreements would lead to penalty and reduced billing to the outsourcing service provider
  • All data was housed in dedicated US server at an international data centre to ensure online connectivity
  • Setting up database for following up the progress on deliverables
  • Formulating and implementing quality compliance systems
  • Setting up a three tier review system to ensure timeliness and accuracy of output
Turnaround Time
  • Establishment of turnaround times for all processes and sub processes. So turnaround time were established for accounts payable, receivable and reconciliation processes for the accounting work
  • Service timings were changed to ensure two hour over-lap with US counterparts to resolve queries and data-related issues
  • Reduction of turnaround time through innovative reporting

e.g. Use of a file tracker system with document identification numbers to clearly highlight missing data or documents. This reduced the time-spent on data-related queries/clarifications.

Responsive Administration
  • Updating the Client Regional Account Managers on daily production status
  • Communicating information requirements through missing information lists
  • Pro-actively following up with the Account Managers and Client Operations Managers on status of information received and setting deadlines so that the client’s minimum production commitments are met
  • Updating the online database for reporting status of ongoing projects/work
Process Innovations
  • Customized checklists prepared to map the existing accounting practices of the client to ensure minimum start-up time for a new file
  • Designing new procedures to reduce processing time and error correction time E.g.: Importing and exporting data between QuickBooks and MS excel
  • Study, analyze and improve on the various client-reporting formats to reduce processing time and/or to improve quality of output. E.g.: designing and modification of various Key Performance Indicators (KPI) reports, excel schedules & word document reports.
Issues and Challenges
  • Irregular flow of data through the month from clients end resulted in skewed work-loads. We handled it through two ways- maintaining a buffer staffing and breaking the process into sub-parts. So a sub-part such as accounts payables related work (regular and predictable expense transactions) was done earlier.
  • Use of English- Standardized templates for raising queries meant that the communication skills of the operators was restricted to specifying the factual transaction details with relevant date and amounts. This similarity in transactions significantly reduces the scope for error due to miscommunication
Impact on Client
  • Significant Cost Reductions
    • The client has been able to reduce the over-head costs significantly to the extent of ~ 30% in the first four months
    • No downsizing of staff but they have been retrained to offer more profitable services
    • New clients addition rate increased by 10% in the last four months
  • Meeting client Deadlines
    • Consistently meeting 95-96% of the client deadlines–Accounting and 99.5% in payroll services
  • Faster turnaround times
    Average turn-around time for write-up (a specialized accounting service) reduced from 3 days to 2 days.

If you are interesting in knowing more about how outsourcing can help your organization, please email us at or call us at 1-646-367-8976. We can also provide a cost-benefit analysis customized for your organization.