CPAs in the US currently face a critical lack of qualified professionals. There have been numerous reports of a consistent decline in professionals. Based on the Spring 2025 CFO Pulse Survey, 87% of CFOs and finance leaders indicated a consistent accounting talent deficit. This was up by 83% in 2024.
The deficit originates from two sources: a new generation pool of employees, steering clear of accounting as a profession. Furthermore, there has been a steady, continued decay of undergrads studying accounting in universities. A whopping 7.8% drop at the bachelor’s degree level, and a 6.4% decline at the master’s degree level. To this is added an enormous reservoir of old-timers departing with retirement. Between 2020 and 2023, over 300,000 accountants retired from accounting practice, and 75% CPAs were within retirement age.
Naturally, US businesses are turning towards alternatives like outsourcing. Outsourcing appears simple, but companies that desire to remain competitive and nimble must be aware of the different outsourcing models. They have alternatives based on many models that work for their in-house arrangements, resources, and expansion plans.
Different Outsourcing Models
Full-Time Equivalent (FTE):
Here, companies team up with an outsourcing company to utilize dedicated offshore professionals who perform discrete tasks such as staff accounting, tax returns, or audit. These professionals work exclusively for the hiring company, just like in-house employees, to deliver steady and specialist service.
However, unlike traditional in-house staff, these offshore employees remain on the outsourcing provider’s payroll, which can bring benefits like cost savings, flexibility, and worldwide talent availability. This FTE model outsourcing allows companies to continue benefiting from high-quality financial and compliance services while potentially reducing overhead and operational complexity. Pay as you go:
Pay as you go:
This can also be termed the hourly model, which is a flexible pricing approach that is used by most companies and service providers. Under this model, companies pay only for the actual hours utilized on a specific project or activity, rather than paying for a fixed amount in advance. This process allows for more accurate cost control since the cost is directly proportional to the amount of work done.
It is particularly popular in consulting, freelance services, and technical support services, where project scope may change or be hard to pinpoint at the start. Clients appreciate openness and being able to modify the scope of work without having to redo the whole contract.
Return-Based:
Under this model, businesses pay a fixed fee for each tax return filed or for each specific work ordered. The work may include some other bookkeeping and financial tasks, such as preparing bookkeeping, creating an audit schedule, or other tasks of the same kind.
The hallmark of this fee structure is that there is no change in the fee depending on the size or complexity of the task. This approach gives firms definite and transparent costs, which make planning and budgeting easy. It reduces uncertainty and enhances financial decision-making by being transparent and simple.
What is the optimum model for different types of firms?
All models may not fit the needs of all accounting firms – there should be an attempt to adopt the one that best fits them, not just for their backend but also in alignment with their company’s unique requirements and work style. As 2025 dawns, outsourcing is becoming a strategic advantage, making it critical for companies to choose the right types of outsourcing models for their operations.
Full-Time Equivalent (FTE) Model
Recommended for:
- Mid-size to large CPA firms with a consistent, twelve-month workload
Such firms undertake routine monthly, quarterly, and annual functions such as bookkeeping, payroll, and audit. With a consistent workflow, having permanent offshore staff provides cost savings and reliability.
- Companies that plan to pursue long-term outsourcing contracts
It allows offshore specialists to be part of the extension of the in-house staff. They acquire the processes, systems, and culture of the firm over time, leading to more effective teamwork and smoother integration.
- Offshore Accounting Team Solution
Ideal for accounting companies wanting to create an offshore team of mature accountants that integrates seamlessly with their in-house staff.
Pay-as-You-Go Model
Recommended for:
- Small CPA companies or startups contemplating outsourcing for the first time
These practices may not have settled workloads or a budget for full-time permanent staff. Pay-as-you-go provides a risk-free way to test outsourcing and understand how it integrates with ongoing operations.
- Firms with variable or ad-hoc projects
Ideal for catch-up accounting, independent client work, cleanup, or temporary spurts of advisory or audit-related services. It allows firms to outsource as needed, with no obligation to fixed monthly charges.
- Companies that desire maximum flexibility with minimal long-term commitment
Task or hourly outsourcing enables companies to respond immediately to changing client demands with minimal operating costs. It is beneficial for companies that are unable to predict their future outsourcing needs.
Return-Based Model
Recommended for:
- Seasonally spiky tax CPA companies
Internal capacity during tax season is typically strained. A per-return pricing model enables firms to meet seasonal spikes without over-hiring internally or engaging full-time offshore employees.
- Firms needing scalability during tax season
This model gives firms the flexibility to outsource as many or as few returns as needed, only charging for completed work. It gives flexibility and ensures that client timelines are met even during the most hectic times.
- Firms that prefer transparent, reliable pricing for deliverables
Instead of worrying about hours spent, businesses can estimate costs based on the number and complexity of tax returns. Open prices make it easy to budget and align the cost of outsourcing with the cost of production.
| Model | Best For | Key Advantages |
|---|---|---|
| Full-Time Equivalent (FTE) | Mid-to-large firms with steady, year-round work | Dedicated staff continuity -Control -Scalability |
| Pay as you go | Small firms/startups, ad-hoc or variable projects | Flexible -Low-risk, -Pay according to hours/tasks -No maintenance |
| Per-Return Based | Tax-focused firms with seasonal spikes | Scalable during tax season, -Quick turnaround |
How to evaluate which model to use?
Choosing the right outsourcing model is not always about cost; it’s about identifying the structure that best aligns with your firm’s internal processes, growth strategies, and business practices. The decision process must be undertaken in an orderly fashion so the chosen model will respond to short-term needs and long-term strategies.
1. Workload assessment
Begin by defining whether an accounting firm’s work is stable, seasonal, or sporadic. Firms having stable work, like bookkeeping, payroll, or monthly CAS work, can prefer a Full-Time Equivalent (FTE) model. Those having uncertain spikes or short projects will prefer Pay-as-You-Go or Per-Return options.
2. Establish Budget Preferences
Budgeting requires careful selection. Some firms are comfortable with the fixed monthly amounts in the FTE model, whereas others prefer to pay only when the work is done, using the Hourly or Per-Return models. Picking the one that works within the company’s financial comfort level offers cost-saving steps without hidden expenses.
3. Establish Control and Continuity
The company must consider how much full-time control and ongoing support it requires. If it requires a full-time professional with knowledge of its systems, FTE is the best option. If it does not require project work, Hourly or Per-Return models may suit it.
4. Consider Growth Plans
The outsourcing decision should be aligned with the growth plans of the company. Fast-paced companies with long-term offshore capacity needs are the best fit for FTE. Companies with special projects or peak periods that need extra support may like Per-Return or Hourly alternatives.
5. Test Before Committing
A good plan for an accounting company is to start with lighter outsourcing engagements. Pay-as-you-go or Per-Return arrangements allow the company to test vendors’ quality, communication, and reliability without lengthy terms. Once there is greater confidence and processes, most move to an FTE model outsourcing arrangement for improved consistency and effectiveness.
Conclusion
When choosing an outsourcing model, each firm possesses its own unique workload characteristics, customer needs, and growth aspirations. The key is to assess the firm’s needs by carefully considering workload consistency, budget options, levels of control, and long-term priorities.
Most businesses begin with elastic models to test outsourcing partnerships and subsequently move to dedicated FTE model outsourcing teams once trust and workflow alignment are established. The ideal outsourcing model can streamline operations but also align with your business’s strategy, growth opportunities, and client service objectives.
AcoBloom offers flexible outsourcing with customized options and expert support to help your business adapt as needs evolve. Doing business with us can streamline processes, improve client satisfaction, and achieve strategic goals in 2025 and the future.
Learn about outsourcing models on our Engagement Model page or get a Free Consultation to find the different outsourcing models that fit your firm.
