AI vs. Offshoring: Are You Asking the Wrong Question?

I’ve been having an interesting conversation with CPA firm leaders lately.

It usually comes down to this: Should we invest more heavily in AI and automation, or should we continue investing in offshore talent?

I think that’s the wrong question. This isn’t an either-or decision.

The better question is: How will you create the capacity your firm needs for the future?

That distinction matters because capacity may be one of the biggest challenges facing CPA firms today. You can have a strong strategy. You can have great clients. You can identify tremendous opportunities for advisory services. But if your people are already working at or beyond capacity, how are you going to pursue those opportunities?

You can’t keep asking the same people to simply do more, and finding enough people in the United States to solve the problem isn’t getting any easier.

That’s why I believe we need to stop thinking about AI versus offshoring and start thinking about AI and offshoring.

AI Creates Capacity

There is no question that AI and automation can change how work gets done inside your firm.

Tasks that once required hours can increasingly be completed in minutes. Administrative work can be reduced. Information can be summarized and analyzed faster. Your people can spend less time gathering information and more time thinking about what that information means.

That’s a tremendous opportunity. It is especially important for your younger professionals.

Think about the traditional career path in accounting. We’ve historically asked young accountants to spend years doing relatively routine work before gradually giving them opportunities to think strategically, interact with clients, and develop advisory skills.

AI gives you an opportunity to accelerate that process. But there’s an important catch. Creating capacity doesn’t automatically create better professionals.

If AI saves someone five hours, what happens to those five hours?

If the answer is simply five more hours of production, you may have improved efficiency, but you haven’t necessarily transformed your firm.

What if some of that capacity were intentionally redirected toward client conversations, critical thinking, professional development, mentoring, business development, and advisory work?

Offshoring Creates Capacity, Too

This is also why I wouldn’t abandon offshoring simply because AI appears to be less expensive today.

I’ve seen CPA firms have considerable success building dedicated offshore teams, particularly in countries such as India and the Philippines. These successful firms approach their offshore counterparts differently.

Your offshore professionals shouldn’t simply be people somewhere else doing the work no one in your U.S. offices wants to do. Think of them as an extension of your firm.

If you had ten professionals working right down the hall from you, would you simply send them data-entry work and never invest in their development?

Probably not.

You would onboard them. You would train them. You would teach them how your firm works. You would explain your expectations. You would help them understand your clients. And over time, you would expect them to take on greater responsibility.

Why should a dedicated offshore team be different?

There are highly educated, capable professionals around the world who can contribute far more than ticking and tying.

The firms that get this right, in my view, will stop thinking of offshore professionals merely as lower-cost labor and start thinking of them as part of their talent strategy.

The Real Opportunity Is the Combination

This brings me back to the original question. AI or offshoring? My answer is both. I wouldn’t put all my eggs in either basket.

Technology will continue to improve, and today’s relatively inexpensive AI tools will undoubtedly evolve. But technology alone doesn’t give you everything you need to build a great professional services firm.

You still need people. You need judgment. You need relationships.

You need professionals who understand your clients, recognize opportunities, ask better questions, challenge assumptions, and provide thoughtful advice.

That’s why capacity is the lens I would encourage you to use.

Imagine

Imagine your firm with AI and automation handling or accelerating routine processes, while a well-trained offshore team expands your talent pool.

✅ Now imagine what that combination could do for your people here at home.

✅ Your associates can begin developing critical-thinking and advisory skills earlier.

✅ Your managers can spend more time managing people and clients rather than chasing work through the system.

✅ Your senior managers and principals can spend more time identifying opportunities and deepening relationships.

✅ Your partners can spend more time with clients, developing business, mentoring future leaders, and thinking strategically about the firm.

That is a very different conversation from simply trying to reduce costs.

Capacity Should Have a Purpose

There’s one more point I believe is critical. Don’t create capacity just for the sake of creating capacity. Decide what you’re going to do with it.

If AI and offshoring give your firm thousands of hours back over the next several years, where do you want those hours invested? I would put advisory capability near the top of the list.

Your clients don’t just need faster tax returns, financial statements, or compliance work. They need people who understand their businesses, anticipate problems, recognize opportunities, and help them think about what comes next.

That requires time. It also requires developing your people differently.

The capacity created through AI, automation, and offshore talent gives you an opportunity to do exactly that.

Some Final Thoughts

So, as you sit around the leadership table discussing your technology and talent investments, I would challenge you to ask a different question.

Don’t ask whether AI is better than offshoring.

Ask how AI, automation, and offshore talent can work together to create the capacity your firm needs. Then ask the more important question:

What are you going to do with that capacity?

Because ultimately, the firms that create capacity and intentionally reinvest it in their people, clients, and advisory capabilities may be the ones best positioned for what comes next.

 Until Next Time!