Nassim Khadem Reporter

Nassim covers the accounting and tax rounds for BRW, as well as general business news. She previously worked for The Age newspaper covering general news, state politics and economics.

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The downsides

Published 09 May 2012 17:34, Updated 10 May 2012 04:15

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Sending work offshore can bring immediate financial benefits but it doesn’t come without problems. In particular, companies need to be wise to cultural differences and understand the dynamics of long-distance managing.

Frontline Accounting’s Mark Cottle says he travels to Manila once a month to make sure his new staff member is on track. “I’ve observed employees [of other firms who employ staff based in Manila] sleeping at their desk, playing on the internet and generally being unproductive,” he says. “That’s the fault of the employer. These people are waiting for something to do.”

Another issue is whether to tell clients who may be expecting the work to remain onshore that their information is being sent to a staff member offshore.

Cottle tells clients he uses an accountant in Manila and says most are happy with it. “Clients who are uncomfortable with our model will use the services of other firms,” he says.

But the sales and marketing manager at BOSS, Lee Court, says it’s up to firms whether they disclose to clients that they offshore services. “Some may have it on their engagement letter that they pass work to a third party contractor. But that’s all they say. Others prefer to be candid in their engagement letter – and explain what they’re doing and why.”

The head of Proactive Accountants Network, Rob Nixon, says disclosure is important. “Some people don’t tell the client that they do it and in my view, if you’re sending someone’s file overseas, you should tell them.”

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