Offshoring SMSF administration and compliance work is becoming more common among accountants as the services receive more take-up and the quality of work improves.
“I think there’s now a general acceptance of outsourcing in the accounting industry,” Odyssey Resources chief executive David Carter told selfmanagedsuper.
“While they’re not shy to tell their clients, they’re still not sure how to handle their clients’ reaction.
“But most people, when confronted with the choice of sending the SMSF work overseas so that it’s cheaper or keep the work in Australia and pay $300 to $500 more, will go for the overseas [option] so long as it’s secure.”
Carter said many small and medium enterprises were themselves sending their work overseas to places such as the Philippines, which in turn prompted them to ask whether their accountants were also offshoring their super funds.
“There’s recognition that work can be done overseas at a good quality, though that hasn’t been there in the last couple of years,” he said.
“But it is there now.”
He estimated that between 20 per cent and 30 per cent of SMSFs currently used some form of offshore services.
“I think that in the next five years outsourcing will be over 50 per cent,” he said.
“What’s stopping more people turning to overseas [outsourcers] is that Australian accountants haven’t yet developed enough services to offer their clients in the absence of the processing work that they used to do.
“So there is some resistance because they’re not sure of what they’re supposed to be doing if they’re not rekeying data from a bank statement.”
He revealed Odyssey Resources experienced a 41 per cent increase in SMSFs over the past three months as of January.
If growth continued, the firm would be processing over 8000 SMSFs a year, he said.
“Our customer base is increasing and last year we engaged with more accounting firms than ever before,” he said.
“This year, the growth is there – not just growth in new customers, but also growth in super funds coming over to us, and the reality is there are a lot more superannuation offshore providers coming into the market.
“If we’re getting a lot of growth plus there’s more competition, that means there’s a shedload of work coming over. A lot of work is going overseas.”
In November last year, the ATO revealed that while it was aware of rising concerns about more SMSF services being outsourced overseas, it had not yet run into any major issues.
“To date, we’ve seen little evidence of outsourcing of audit or advisory activities,” ATO superannuation acting assistant commissioner Kasey Macfarlane told an SMSF Association New South Wales state chapter breakfast.
“But it is something that we’re monitoring.”
