Considering outsourced accounting for your firm?
It can be a double-edged sword—on the one hand, it can ease many burdens that have long been present in accountants’ line of work.
However, there are also concerns and issues surrounding outsourced accounting that no firm owner should turn a blind eye to.
In this blog, we’ll explore the pros and cons of outsourced accounting services to help you decide which route to take.
The Benefits of Outsourced Accounting
- Service mix
- Healthy onshore-offshore blend
- Major cost slash
- Business growth booster
Let’s break them down one by one.
1. Outsourced accounting services are diverse
The talent crunch is a broader crisis across industries. The impending retirement boom is expected to deplete 75% of experienced talent from the accounting workforce. This means companies will have fewer new employees with lower skill levels and diversity.
To combat this gap, businesses are now sourcing their talent from bigger pools—specifically, ones beyond their shores.
For most firms that have opened their doors to global talent, three key skill-related benefits come to mind:
- Industry specialisation - tap accounting professionals with different specialisations, like bookkeepers, auditors, tax accountants, and AP/AR clerks
- Advanced expertise - work with highly experienced, well-trained, and properly accredited accounting professionals
- Diverse skill sets - partner with versatile accounting professionals, like tax accountants who can also be your staff accountants when needed
Companies can benefit from working with outsourced accounting experts because they can generalize and specialize.
2. Onshore and outsourced accounting teams can work together
Most people think that outsourcing your accounting services means abandoning your internal accounting team.
That’s not the case at all.
In aiming for a healthy ratio of onshore-offshore staff, here’s our quick hack: For every internal staff onshore, there should be two outsourced staff.
This way, your trusty in-house accounting team can leverage global talent teams and take the burden of compliance tasks off their shoulders.
With a healthy blend of onshore and offshore team members, you can focus on internal processes and delegate routine tasks to dedicated, skilled global talent teams—while keeping a close eye on both.
3. Outsourced accounting services slash costs
“A little goes a long way” applies to outsourced accounting.
Your business budget stretches further when working with accounting service teams from territories like the Philippines. Outsourced accounting firms in these regions either operate with lower labor costs or run remote teams to minimize overhead expenses like office space.
Since they handle multiple clients at once, they spread fixed costs across many client accounts, lowering fees charged to each client.
Firms can either pass these savings on to their clients, offering more for less, or keep their current prices and enjoy larger margins.
4. Outsourced accounting services are scalable
Outsourced accounting services adapt easily to your business needs without the need to hire more local full-time staff or spend more on infrastructure.
Whether you’re just starting out or experiencing rapid growth, outsourced services can flexibly adjust to the volume of work you require—from bookkeeping and tax preparation to financial reporting.
In short, your team grows as you grow!
The Perceived Challenges of Outsourced Accounting
While outsourced accounting can fit some businesses like a glove, other firm owners may be a bit more skeptical about it, seeing it as a Trojan horse of future disasters.
We won’t sugarcoat anything. We’ll lay it all out below.
1. Outsourced accounting services supposedly pose security risks
Mishandling sensitive financial data doesn’t only mean money losses—you also erode public trust. With your finances and reputation on the line, taking cybersecurity measures seriously is the only way to go.
This is one of the primary concerns of firm owners when it comes to outsourced accounting services. Limiting access to client information and transactional records to just one internal accounting team seems safer.
Here’s the reality: Cybersecurity threats affect all industries, but accounting firms face higher risk because of the type of data they manage.
The good thing is that many reputable outsourcing providers invest in cybersecurity measures that smaller firms might not have the budget for. This includes advanced encryption and regular security audits.
If you’re already considering outsourcing, you should look for a partner with well-documented cybersecurity protocols, state-of-the-art infrastructure, and contractual agreements for legal protection. The right provider should strengthen your security posture, not weaken it.
2. Outsourced accounting teams may not speak English well
While this is a legitimate concern, many outsourcing providers are in countries with high English proficiency rates and strong business communication training, like the Philippines. According to the 2024 English Proficiency Index (EPI), the Philippines ranks 22nd out of 116 countries.
So, what’s the key? Assess their communication skills during your vetting process. Look for providers with experience working with companies like yours. Do they ask the right questions about your processes? Can team members explain complex accounting concepts? After all, one misinterpretation can be costly.
3. Outsourced accounting firms may be culturally mismatched with global businesses
Some firms worry that cultural differences can create friction between onshore and offshore teams. A preference for direct, assertive communication may go against another team’s preference for a more indirect approach.
What might seem like hesitation could actually be being polite. What appears to be missed deadlines might reflect a more flexible culture of managing time.
That’s why you should establish clear expectations upfront. Set explicit deadlines and schedule regular check-ins to address any issues.
Differences will always exist, but you can always manage them in ways that promote mutual cultural understanding and collaboration.
4. Outsourced accounting teams aren't in the same time zone
If you’re not in the same time zone as your team, you’re inevitably going to deal with communication barriers. You can’t talk to them in real-time and you might also have to deal with process interruptions, like different public holidays and natural disasters.
Fortunately, most outsourcing accounting services practice shifting among their employees. Especially with staff working for companies from the other side of the world, many of them start their shifts during nighttime and end in the mornings.
Is Outsourced Accounting Worth It?
Expanding your horizons to new business models isn’t a dark-figure level of scary anymore. Many businesses are doing it, and most of them prove to be successful case studies.
With outsourced accounting services, you can go from spending your evenings wrestling with numbers and figures to having your time back for yourself and doing the things you love. You get more time for higher-margin tasks like strategic planning for your business and paying more attention to your internal processes. What’s not to love, right?
Elite Outsourced Accounting Services from TOA Global
Imagine handing off all your accounting-related woes and worries to a trusted team—what a heavy weight off your shoulders! But note that you’re not just handing these concerns over to highly skilled people, but also to a system that’s cybersecure, technologically advanced, and barrier-breaking.
Firm owners like you can benefit from generalized and specialized accounting expertise, without the hefty price tag. This is what outsourcing can deliver, and partnering with TOA Global might just be the push your business needs.
