The complete guide to finance and accounting outsourcing services

Staying ahead often means embracing innovative strategies to streamline operations and maximize efficiency. Enter outsourcing: a game-changing solution that has revolutionized the way companies manage their finance and accounting needs.

Whether you're a startup aiming to minimize overhead costs or a seasoned enterprise seeking to focus on core competencies, outsourcing finance and accounting offers a myriad of benefits. 

From cost savings and access to specialized expertise to enhanced scalability and flexibility, this comprehensive guide is your roadmap to navigating the complexities of outsourcing in the realm of finance and accounting. 

In this blog we delve into the intricacies of outsourcing, uncovering strategies, best practices and key considerations to help you harness its full potential and propel your business toward sustainable growth and success.

What is finance and accounting outsourcing?

Outsourcing is a tried and tested resourcing strategy that typically sees businesses identify repetitive and time-consuming tasks and assign them to third-party team members in another location. With many aspects of finance and accounting fitting the bill as transactional and/or rules-based, such jobs lend themselves to outsourcing and, in turn, ease the pressure on small and medium-sized businesses.

What are the benefits of outsourcing finance and accounting?

• Optimize expenditure: quality providers are highly knowledgeable about the sector and can help identify opportunities to reduce expenses and costs without compromising quality and efficiencies.
• Less repetitive tasks: using an outsourced individual or team allows business owners and their key financial managers to spend more time and energy on core responsibilities and more valuable work as opposed to repetitive and time-consuming tasks.
• Boost in-house morale: removing onerous work from onshore team members’ to-do lists often results in happier and more motivated staff. Allowing them to dedicate more time to rewarding work is a great way to inspire a better company culture and help grow one’s business.
• Reduce employment costs: establishing and managing in-house finance and accounting teams is costly. Recruitment, onboarding and training alone are expensive exercises, let alone providing them with the equipment, office space and technology they need to do their jobs. Outsourcing providers cover these costs, which is invaluable in a tight economic market.
• Access to global talent: offshore providers can grant businesses access to high-quality talent pools that are filled with experienced and hard-working finance and accounting professionals. For example, the Philippines has a highly educated workforce that operates in a fiscal and financial system almost identical to Western nations.

How do you choose a quality outsourcing provider?

Outsourcing is an excellent way to reduce costs and increase efficiencies but it is essential to partner with a provider that is right for your business and that starts by ticking a few key boxes.

• Determine your needs: when it comes to outsourcing, one size does not fit all so it is imperative to seriously consider your needs before entering the market. Different providers offer different services and you will want to find one that provides exactly what you are looking for. Are you looking for help with rudimentary tasks such as bookkeeping, tax preparation or payroll processing? Maybe you require more in-depth assistance such as financial analysis or forecasting. Is it a case of all the above? Identifying what you need will help streamline your list of potential providers.
• Look for experience: never underestimate the value of partnering with an experienced provider. The digital boom means effectively anyone can promote their wares but great comfort can be found in teaming with a provider that has expertise working with businesses such as your own and, more importantly, the specific accounting services you want. Do your research, seek testimonials, ask questions – and sleep a little easier at night.
• Check accreditations: finance and accounting is a specialist field that is rightly governed by strict standards and guidelines. Before signing an outsourcing partnership, ensure that your chosen provider has met the standards of excellence and professionalism required of them. From Certified Public Accountant (CPA) to The Chartered Institute of Management Accountants (CAMA), there are plenty of professional organizations that provide such accreditation. It is also essential to link with a provider that places the highest emphasis on data security and compliance given the sensitive information being shared.
• Demand tech excellence: the very nature of outsourcing means best-practice technology is non-negotiable for offshore providers. Modern accounting has benefited from an infinite range of digital tools and solutions, which is why your provider should have access to and expertise in the latest cloud-based accounting software and platforms. Similarly, ensure their systems are compatible with your own and that data security is of the highest priority for them.
• Focus on communication: an outsourcing provider can assign you the world’s best bookkeeper but if the organization or team member is a poor communicator, the relationship is bound to fail. Customer service is key so aim to find a provider that communicates clearly and goes the extra mile when answering your questions and concerns. They should also have established processes for providing a dedicated point of contact that will provide you with support as it is needed.
• Study the fine print: the best outsourcing relationships are those built on trust. Seek out a finance and accounting outsourcing provider that is transparent about their pricing structure. Many businesses have been caught out by finding a ‘great deal’, only to learn the hard way that hidden costs or fees quickly create a sizable bill. If a provider is truly invested in forming a long-term partnership, they will do their best to provide you with an honest and fair pricing structure.

The top accounting and finance outsourcing destinations

From humble beginnings, the global outsourcing market has grown at a rapid rate as governments realize the economic benefits of providing services for other nations. This is particularly so in the accounting and bookkeeping sector, with several countries particularly invested in nurturing such talent.

• The Philippines: backed by a government fully committed to supporting its outsourcing industry, The Philippines has emerged as one of the hottest offshore destinations on the planet. This is all the more so for the accounting sector, with the country home to more than 175,000 Certified Public Accountants (CPA) and almost another 8,000 joining the workforce every year after passing their board exams. Throw in the fact The Philippines is home to at least as many non-CPA accountants and it is clear why so many in-country businesses are benefiting from its services.
• India: a global powerhouse of the outsourcing industry, India is high on the list of nations that companies consider when the conversation turns to sending certain tasks offshore. As the world’s most populated country after China, there is no shortage of talent and the local infrastructure continues to improve. While English is widely spoken, difficulties related to the language barrier can be a turn-off for some Western businesses and rising wages are starting to put pressure on cost advantages.
• Brazil: the South American nation is a rising star on the outsourcing scene and particularly appealing for U.S. companies given it is in the same time zone. Brazilians offer a multitude of technical expertise in understanding the mechanics of business and accountancy, while the nation itself has made enormous strides when it comes to infrastructure and communication on the back of hosting the 2016 Olympic Games. Some business owners continue to be concerned about potential bureaucracy issues, along with the language barrier.
• Ireland: well-established in the European Union, Ireland offers an education system and technology culture that is among the best in the world. Another obvious benefit is boasting English as their native language, while a reputation as friendly, hard-working employees is appealing for businesses looking to outsource accounting services. There is a reason few developed countries are on this list though and that is their services come with a higher price tag. A smaller population base also means Ireland produces less accounting graduates than the likes of India and the Philippines.

Top trends in finance and accounting outsourcing

Befitting a profession that prides itself on evolution, the accounting and finance sector is continually adapting to the ever-changing landscape, with current trends to watch including:

• Cloud-based accounting: bookkeepers and accountants are not alone in having embraced cloud-based solutions in recent years but their enthusiasm for the technology knows no bounds. The shift to cloud-based accounting is allowing them to access and share financial data whenever and wherever they want, with emerging software and systems offering additional benefits such as cost savings and enhanced user experience.
• Updated skills: with executives under increasing pressure to turn visions into profits, there is a growing expectation for their accountants to not simply ‘do the numbers’ but act as financial consultants. This means they require a full understanding of laws regarding accounts and finances, along with the ability to communicate with authority and confidence both in-person and online. Given their investment in the sector, outsourcing providers are leading the way in sourcing practitioners who boast the latest skills and qualifications to do just that.
• Automation: the rise of machine learning and artificial intelligence is leading to more automation in the accounting sector and, in turn, allowing accountants and bookkeepers to focus more time on higher-value activities. With manual tasks such as invoice capture, data entry and reconciliation increasingly being automated, outsourcing providers can guarantee greater accuracy and faster services and spend more time advising their clients on all matters financial.