Case Study Small Firm - Tax Advisory Services

Building a Hyper Profitable Firm with 70% Offshore Team and 30% Onshore Team in 5 Years.

Services

Husband Handles Accounting/Bookkeeping
Wife is an EA and handles Taxes

Challenges

Clients are Small and Mid-Size Businesses
Fees Sensitive Client

Struggles

Less Margins
Overworked Partners & Work-life imbalance
Overworked Team
Low Growth
Seasonality
Staff Turnover/Retention
Client Service Challenges. (Extended Deadlines, Not able to give to clients)
Want to Focus on Advisory or Expand Other Services but Can’t Do

Firm’s Offshore Team Expansion in 5 Years

Partners	2018		2019		2020		2021		2022
Partners	No.	Hours	No.	Hours	No.	Hours	No.	Hours	No.	Hours
Account Partner	1	2340	1	2340	1	2100	1	1800	1	1440
Tax Partner	1	2340	1	2340	1	2100	1	1800	1	1440
Total	2	4680	2	4680	2	4200	2	3600	2	2880
Avg. No. of Hours/Week	-	48.75	-	48.75	-	43.75	-	37.5	-	30

Onshore Team	2018		2019		2020		2021		2022
Onshore Team	No.	Hours	No.	Hours	No.	Hours	No.	Hours	No.	Hours
Administrative Staff/Bookkeeper	2	4080	2	4080	1	1800	1	1740	1	1580
Tax Supervisor	1	2040	1	2040	2	3600	1	1740	1	1560
Accounting Supervisor	1	2040	1	2040	1	1800	2	3480	2	3120
Tax Manager (Enroll Agent)	1	2040	1	2040	0	0	0	0	0	0
Tax Interns	2	4080	1	2040	1	1740	1	2040	1	1560
Total	7	14280	1	12240	5	8940	5	9000	5	7800
Avg. No. of Hours/Week	-	42.50	-	42.50	-	37.25	-	37.50	-	32.50

Offshore Team	2018		2019		2020		2021		2022
Offshore Team	No.	Hours	No.	Hours	No.	Hours	No.	Hours	No.	Hours
Bookkeeper	1	520	2	4160	3	6240	4	8320	4	8160
Tax Preparers (Regular)	0	0	1	2080	2	4160	3	6240	4	8160
Tax Preparers (Temporary)	0	0	0	0	1	2080	1	2080	2	4080
Tax Supervisor	0	0	0	0	1	2080	1	2080	1	2040
Accounting Supervisor	0	0	0	0	0	0	1	2080	1	2040
Total	1	520	3	6240	7	14560	10	20800	12	24480

Revenue & Profitability Growth 5 Years

Particulars	2018	2019	2020	2021	2022
Revenue (USD)	1,250,000	1,520,000	1,750,000	2,050,000	2,350,000
Cost of Salaries (Onshore Team) (USD)	665,000	690,000	652,000	675,000	750,000
Cost of Salaries (Offshore Team) (USD)	5,200	68,640	174,720	270,400	342,720
Overheads (USD)	150,000	155,000	145,000	140,000	155,000
Profit (Before Partner Salaries) (USD)	429,000	606,360	805,280	964,600	1,102,280
Profit (Before Partner Salaries)	34.37%	39.89%	46.02%	47.05%	46.91%
Partner “IN” Time (No. of Hours Put in a Year)	4680	4680	4200	3600	2880
Average Hourly Earnings (Before Taxes)	91.84	129.56	191.73	267.94	382.74
Average Annual Earnings/Onshore Staff (USD)	95,000	115,000	125,000	135,000	150,000

Result in 5 Years

Particulars	2018	2022	Impact
Avg. Partner’s work week (No. of hrs/Week)	48.75	30	40% Reduction
Avg. Onshore Employee work week (No. of hrs/Week)	42.50	32.50	25% Reduction
Profit Before Tax & Partner Compensation %	34.38%	46.91%	36% Increase
Partner In Time (No. of Hours Worked in a Year)	4680	2880	40% Reduction
Avg. Hourly Earning (For Partner)	$91.84	$382.74	4 Times Increase
Avg. Annual Earning for Onshore Staff	95,000	150,000	58% Increase
Avg. Hourly Earnings (For Onshore Employee)	$42.99	$88.76	106% Increase
No. of Staff Onshore	7	5	-
No. of Staff Offshore	1	12	-

“Built a hyper-profitable firm with 40% less time invested. We aim to help the firm build 40%+ margins with less than 1000 hours/year per partner i.e. 25 hours of work/week.”

12 Key Learning From This Case Study

In the course of five years, this case study highlights twelve key learnings that encompass short, medium, and long-term planning, emphasizing the critical role of documented processes, and the pivotal exchange of managerial roles between offshore and onshore teams.

Short/Medium/Long Term Plan
Documented Process - Initial Investment of Time
Strategic Role of Offshoring
Building Core Team (2 Offshore & 2 Onshore)
Client Categorization A,B,C
Narrowed Reporting - Partner Manage ‘A’ Clients

Fees Revision
Tech Stack Optimization
Staff Compensation (Above Market)
Offshore Manager - Travelling to US
Onshore Manager - Travelling to India
It Took 5 Years to Achieve This - Long Term

How Did This Firm Achieve This Tremendous Success ?

Case Study Small Firm > 45% Net Margins

Why Firms Should Provide F & A, Back Office Department Offshoring – Micro Teams Services

Size of Business	Team Onshore		Team Offshore		Revenue/Profitability
Size of Business	Size	Margin (USD)	Size	Margin (USD)	Revenue	Cost (USD)	Margin (USD)	Margin (%)
> $3M	0.5	37.5K	1.5	30K	105K	67.5K	37.5K	36%
$3M - $5M	1	75k	4	80k	262.5K	155k	107.5K	41%
$5M - $10M	2	150k	8	160k	525k	310k	215k	41%
$10M - $25M	3	225k	17	340k	1050k	565k	485k	46%
$25M - $50M	5	375k	30	600k	1,837.5K	975k	862.5k	47%
$50M - $100M	7	525k	43	860k	2,625K	1,385k	1,240K	47%
$100M - $250M	10	750k	65	1,300k	3,937.5K	2,050K	1,887.5K	48%
$250M - $500M	12	900k	88	1,760k	5,250K	2,660k	2,590K	49%

Firm Can Generate $1M+ Revenue With 5-10 Clients.

Unlocking Financial Potential: How Firms Realize $1M+ Revenue Through Strategic Client Acquisition and Management

Investing < 1000 hrs of Owners/Partner Time Annually
Net Margins 45%+
Focus on Mid-Size Client

Average Annual Engagement Value >50K
About 4 Onshore Employees
About 12 Offshore Employees

Case Study Regional Firm

How Regional Firm Navigates Expansion, Staffing Dynamics, and Offshoring Strategy for Sustainable Growth.

Offices

Based out of Salt Lake City, Utah
Total 3 Offices

KPIs

Every Partner has a KPI of what % of work done/staff is offshore

Staff

Out of Every 4 New Hired staff 1 would be Onshore & 3 would be Offshore
(New Hiring 25% Onshore & 75% Offshore)
10% Onshore Staff being remote across US

Projection

5% to 6% wage Increase for Onshore staff. (With based average package considered to be $100,000 per staff)
8% to 10% wage Increase for Offshore staff. (With based average package considered to be $35,000 per staff)
Goal is 1:1 Onshore:Offshore Employee Headcount by 2028

Growth Plan

Determining SOPs
Hierarchy between Offshore/Onshore Team
Project Revenue Growth 30% CAGR (From 2024 to 2028)
By 2028 - 50% of Billable work needs to move Offshore

Building Standardized Review Checklist
Project Headcount Growth 20% CAGR (From 2024 to 2028)
Projected No. of Partners Growth 15% CAGR (From 2024 to 2028)

Firm’s Financial Projections

PARTICULARS	2022	2023	2024	2025	2026	2027	2028
Revenue (USD)	35,000,000	44,000,000	57,200,000	74,360,000	96,668,000	125,668,400	163,368,920
Growth %	-	25.71%	30.00%	30.00%	30.00%	30.00%	30.00%
Team Size	240	270	324	389	467	560	672
Growth %	-	12.50%	20.00%	20.00%	20.00%	20.00%	20.00%
No. of Onshore Team	230	250	264	280	299	322	350
Onshore Staff Salary Cost (USD)	17,250,000	20,000,000	26,350,000	29,368,500	32,905,400	37,083,820	42,055,392
% Staff Onshore	95.83%	92.59%	81.33%	71.94%	64.12%	57.60%	52.16%
No. of Offshore Team	10	20	61	109	167	237	321
Offshore Staff Salary Cost (USD)	250,000	550,000	2,117,500	4,145,800	6,864,220	10,683,180	15,747,855
% Staff Offshore	4.17%	7.41%	18.67%	28.06%	35.88%	42.40%	47.84%
Gross Profit (USD)	17,500,000	23,450,000	28,732,500	40,845,700	56,898,380	77,901,400	105,565,673
Gross Profit %	50.00%	53.30%	50.23%	54.93%	58.86%	61.99%	64.62%
SG & A %	20%	20%	19%	18%	17%	16%	15%
Net Profit % (Before Partner Salaries)	30.00%	33.30%	31.23%	36.93%	41.86%	45.99%	49.62%
Net Profit (Before Partner Salaries) (USD)	10,500,000	14,650,000	17,864,500	27,460,900	40,464,820	57,794,456	81,060,335
No. of Partners	19	23	26	30	35	40	46
Net Profit/Partner (USD)	552,632	636,957	675,406	902,799	1,156,795	1,436,703	1,752,231

Firm’s Details & Growth Plan

It’s not just about Cost Savings

Offshoring is not only about cost saving but also about improving the quality and health of the firm's business and operations. It’s a strategic, sustainable, and profitable way of expanding the team.

	Case study of Small Firm			Case study of Mid Size Firm
	Before Offshore Staffing	3 Years After Offshore Staffing	Difference	Before Offshore Staffing	3 Years After Offshore Staffing	Difference
Partner	1	1	-	4	4	-
Onshore Staff	4	3	1	16	15	1
Offshore Staff	-	3	3	-	7	7
Revenue	$537.983	$752,173	40%	$4,100,713	$5,699,009	39%
Profit Before Partner Salary	$177,213	$380,955	114%	$1,218,322	$2,336,593	92%
Partners “IN” Time	2,236	1,716	23%	7,728	6,480	16%
Partners Avg Work Week	43	33	10 hr/week	40.25	33.75	6.5 hr/week
Profit Time Measure	$79	$222	181%	$157	$360	130%

Our internal client survey revealed the following benefits are achieved post offshoring in 2-3 years

Notes

4 weeks of vacation included
Partner "IN" Time includes time spent on client work, team management, firm administration, etc.
Owners "IN" Time includes owner’s time spent on client work (changed or not changed), team management and firm administration

Profit time measure is the measure of profitability per hour and how well the firm is managed without its partners
This firm's operational and financial performance improvement shouldn't be just attributed to offshoring. Offshoring with us was one of the many reasons that led to improvement in overall firm performance

Case Study VCFO & CAAS

How did Offshoring Catalysts Drive a Remarkable Doubling of Revenue and Ensure 95%+ Client Retention?

About

Completely Virtual Firms
Focus on Mid-Size Clients only

Clients

Client spread across US.
(Geographically Diversified)

Hurdles

Offshoring 1st Attempt in 2018 Failed - As it was Offshoring – Micro Teams & Black Box Way of Working

Milestones

Started with MYCPE ONE in 2019 for offshoring but now with dedicated hiring and have scaled since then
Weekly Billing system for Clients./Subscription Value based pricing
Each VCFO would be responsible for a book of business. (Managing about 10 to 15 Clients Depending upon size of clients)
2 Weekly Retreat a Year for Staff. (Where all staff get together)

90%+ Revenue

From VCFO & CAAS

2X Revenue

In 5 Years

95%+

Client Retention

How Did This Firm Achieved This Tremendous Success ?

Role of Onshore Team

Partners

Business Development
Thought Leadership

VCFO

VCFO is the client face, managing 10-15 client relationships end to end.
Initial investment of time for onboarding and process setup.
Once client is onboarded. Ongoing involvement is Once/Twice monthly meetings with clients.

Sr. Accountants

Assist VCFO in client meetings.
Responsible for all client Ongoing Derivables.
Would collaborate on day to day basis with Clients, Client Team, VCFO & Offshore Team.

Office Administrator

Administrative function and managing Virtual assistants offshore.

Tax Manager

Responsible for Taxes of all clients.

Tax Preparers

Responsible for Tax Preparation and work with offshore tax team.

Role of Offshore Team

Account Manager

Reviews work by Accountants.
Ensures month-end closing/reporting for client readiness.
Collaborate on day to day basis with Clients, Client Team, Onshore Accountants, VCFO & Offshore Team.

Accountants

Handle accounting, bookkeeping, payroll, and sales tax tasks.
Submit work to Offshore Account Manager.

Tax Manager

Responsible for allocating and reviewing the work to offshore Tax Accountants
Collaborates with Tax Team Onshore and Clients.

Tax Accountants

Do all the Tax preparation works for the clients.

Virtual Assistant

Responsible for Taxes of all clients.

Team Structure & Financials of The Firm

Team	2019	2020	2021	2022	2023*
Onshore Team	40	43	47	51	55
Partners	2	2	2	2	2
VCFO	9	10	12	14	14
Sr. Accountants	22	25	28	30	34
Office Administrator	4	3	2	2	2
Tax Manager	1	1	1	1	1
Tax Preparers	2	2	2	2	2
Offshore Team	12	23	38	56	67
Account Manager	0	1	2	3	3
Accountants	12	22	33	46	55
Tax Manager	0	0	0	1	1
Tax Accountant	0	0	1	3	4
Virtual Assistant	0	0	2	3	4
Opening (No. of Clients)	118	122	142	164	184
Added (No. of Clients)	5	25	26	24	13
Lost (No. of Clients)	-1	-5	-4	-4	-2
Net Closing (No. of Clients)	122	142	164	184	195
No. of Clients/VCFO	14	14	14	13	14
Revenue (USD)	9,760,000	12,496,000	15,416,000	18,768,000	20,475,000
Average Revenue/Client (USD)	80,000	88,000	94,000	102,000	105,000
Revenue/VCFO (USD)	1,084,444	1,249,600	1,284,667	1,340,571	1,462,500
Financials Of The Firm
Revenue (USD)	9,760,000	12,496,000	15,416,000	18,768,000	20,475,000
Onshore Team (Cost)
VCFO (USD)	2,025,000	2,400,000	3,060,000	3,780,000	3,920,000
Sr. Accountants (USD)	2,310,000	2,875,000	3,500,000	4,050,000	4,760,000
Office Administrator (USD)	320,000	255,000	180,000	190,000	200,000
Tax Manager (USD)	165,000	175,000	185,000	195,000	210,000
Offshore Team (Cost)
Account Manager (USD)	0	35,000	80,000	135,000	144,000
Accountants (USD)	300,000	660,000	1,089,000	1,518,000	1,815,000
Tax Manager (USD)	0	0	0	45,000	48,000
Tax Accountant (USD)	0	0	30,000	105,000	120,000
Virtual Assistant (USD)	0	0	50,000	90,000	120,000

Gross Margins (USD)	4,460,000	5,896,000	7,022,000	8,420,000	8,868,000
Gross Margins %	45.70%	47.18%	45.55%	44.86%	43.31%

Overheads (USD)	255000	315000	350000	390000	430000

Net Margins (USD)	4,205,000	5,581,000	6,672,000	8,030,000	8,438,000
Net Margins %	43.08%	44.66%	43.28%	42.79%	41.21%

Reasons For This Tremendous Success

Case Study VCFO & CAAS 2

Firms typically charge fees based on value on a monthly basis. However, hourly billing is considered from a cost standpoint.

CLIENT PROFILE & FEES DETAILS
Ideal Client Size (Revenue)	$1 - $5 Million	Hourly Requirement Per Client (Yearly)	333 Hours
Ideal Client Size (No. of Staff)	5 - 40 Staff	Hourly Requirement Per Client (Monthly)	28 Hours
Average Revenue/Client (Yearly)	$25,000/Yr	Hourly Requirement Total (Yearly)	16,667 Hours
Average Revenue/Client (Monthly)	$2,083/Month	Hourly Requirement Total (Monthly)	1,389 Hours
No of Clients	50	Total Revenue (Monthly)	$104,167/Month
Blended Hourly Billing Rate (Blended)	$75	Total Revenue (Yearly)	$1,250,000/Yr

BILLING RATE & AVAILABLE HOURLY CAPACITY
Particulars	Client Facing	Client Facing	Billing Rate (USD)	No.of Staff	Available Hours Monthly	Available Hours Yearly
Manager	Offshore	Yes	75.00	1	160	1920
Sr. Accountant	Offshore	Yes	60.00	1	160	1920
Associates	Offshore	No	40.00	4	640	7680
VCFO	Onshore	Yes	150.00	1	160	1920
Sr. Accountant	Onshore	Yes	100.00	2	320	3840
Total				9	1440 Hrs	17280 Hrs

	Monthly	Yearly
Available Capacity (Hourly)	1440	17280
Required Capacity (Hourly)	1,389	16,667
% Utilization	96.45%	96.45%

Particulars	Location	Yearly Salary (USD)	No.of Staff	No./Value (USD)
Revenue (Yearly)	NA	NA	NA	1,250,000
Manager	Offshore	$60,000	1	60,000
Sr. Accountant	Offshore	$35,000	1	35,000
Associates	Offshore	$25,000	4	100,000
VCFO	Onshore	$150,000	1	150,000
Sr. Accountant	Onshore	$100,000	2	200,000
Total Salaries	NA	NA	9.00	545,000
Gross Margins	NA	NA	56.40%	705,000
SG & A	NA	NA	10.00%	125,000
Net Margins	NA	NA	46.40%	580,000

NA- Not applicable

KEY TO SCALE/PROFITABILITY/DECENTRALIZATION IN VCFO & CAAS

Building Processes that repeatable
60% to 80% Offshore Team
Building a Playbook for Role of VCFO/Advisory
Targeting - Right Size/Type of Client

Targeting - One or Two Niches
Optimizing Your Tech Stack
Taking On Large Engagements
Consistent Business Development & Marketing

How USXA (Formerly WSRP) Leveraged Private Equity and Strategic Offshoring for Exponential Growth

Firm Name

WSRP

Office Locations

United States

Salt Lake City, UT
Ogden, UT
Ogden, UT

Firm Size Before Private Equity

130-140 employees

Annual Revenue Before Private Equity

$20 million

Services

Audit
Tax
Advisory
Client Accounting Services (CAAS)

Challenges Faced by the WSRP

WSRP encountered below key growth limitations:

Scaling Constraints

Growing beyond $20 million in revenue required significant capital and workforce expansion.

Talent Shortage & Rising Costs

U.S. labor market constraints led to high payroll costs, making rapid expansion costly.

Operational Bottlenecks

Without automation and global workforce integration, the firm struggled with process efficiency.

Acquisition Strategy Challenges

Without structured funding, acquiring and integrating firms at a rapid pace was challenging.

In 2023, WSRP, a prominent accounting firm, secured private equity backing from F3 Partners, marking a significant milestone in its growth trajectory. This partnership set the stage for WSRP’s ambitious plans to scale operations through strategic acquisitions and enhanced operational efficiency.

Why They Chose Private Equity & Offshoring

WSRP sought a dual approach—private equity funding for acquisitions and offshoring for operational efficiency. Key reasons for choosing this strategy:

Private Equity (PE) Funding

Backing from F3 Partners allowed WSRP to execute an aggressive acquisition strategy.

Offshore Talent Utilization

Offshoring increased capacity without proportionally increasing costs.

Higher EBITDA Multiples

A combination of M&A growth and offshoring cost efficiency directly boosted profitability.

Scalability & Adaptability

Offshore teams handled complex accounting tasks, freeing onshore staff for high-value client work.

Solution Implemented - Private Equity Strategy

WSRP structured its acquisitions using:

Upfront cash payments
Higher valuation multiples upon exit, aligning financial interests

Equity roll-ups into the parent company, incentivizing acquired firms to contribute to long-term growth

By 2024, this strategy resulted in four successful acquisitions, boosting revenue from $20 million to over $50 million in just one year.

Offshore Expansion Strategy

Offshore Expansion Strategy:

2024: 15 offshore staff, scaling to 35 by year-end
Key Offshore Roles: Senior professionals in audit, tax, and advisory

2026: 100-120 offshore staff, handling 30-50% of total workload
Integration Strategy: Offshore teams worked closely with onshore managers, including periodic U.S. visits for training and alignment

Incentive Alignment Across Teams

WSRP introduced:

Partner-Level ESOPs tied to revenue and EBITDA milestones
Collaborative offshore-onshore workflows, ensuring high engagement

Valuation-Based Incentive Structures for onshore and offshore management

Results & Impact

Acquisitions

Four firms acquired in 2024, fueling rapid expansion

Offshore Expansion

Grew from 15 offshore staff to 35 in mid-2024, targeting 100+ by 2026

Revenue Growth

Revenue soared from $20 million to over $50 million in just one year

Operational Efficiency

Offshoring contributed to higher EBITDA margins and improved service delivery

Scalability & Competitiveness

Enhanced ability to meet client demands while keeping costs low

	January 2024	June 2024	January 2026
	Team Size	15	32	100+

Key Takeaways

Scalable Growth: M&A strategy fueled by private equity enabled rapid expansion
Incentive Alignment: ESOPs and valuation-based incentives encouraged long-term firm growth

Cost Optimization: Offshore staffing cut operational costs while improving efficiency
Offshore Integration: Offshore teams handled up to 50% of workload, freeing onshore staff for high-value tasks