The profession of accounting is poised for revolution. The profession was once an obvious choice for those with a knack to numbers, and perhaps a sophisticated calculator, the impact of technological advancements, ever-increasing bureaucracy and an increase in cyber-security threats to data means that the days of being able to quickly recruit accountants in-house and bookkeepers are rapidly ending. Although the demand for experienced accountants is more than ever, the amount of small and medium-sized firms that can pay the high salaries required by skilled professionals is decreasing every day.
Thankfully, accounting outsourcing companies are rising up to fill in the gaps. The practice of enlisting companies from outside to complete the tasks that are traditionally handled internally has grown exponentially in recent times and this is the same in the bookkeeping and accounting sector. With the market for financial services predicted to grow to $28.5 trillion in 2025 research has found that the field of accounting has become among the most outsourced business, with 37 percent of small companies using external service providers to handle their accounting and financial requirements.
The reason that so many businesses are choosing to outsource their accounting services is because it’s effective. One of the greatest advantages is that it lowers expenses without compromising quality. Since the costs of offshore labor are often just a fraction of the costs in the country, outsourcing companies are able to offer services at less expensive prices, and reduce the time and cost of long-winded hiring procedures. Outsourcing allows businesses to quickly scale their accounting requirements to a higher or lower level based on the demand (e.g. taxes season) and can devote more energy, time and resources to advancing their business instead of doing tedious administrative tasks such as bookkeeping and accounting.
Accounting tasks you can outsource
Being one of the most effective methods to increase profit and increase growth, it’s no surprise that companies are turning to outsource service providers to fulfill roles like:
- Processing of payroll : offshore payroll services calculate salaries of employees as well as bonuses, taxes, and deductions as well as ensuring the distribution of their earnings and making sure they are in compliance with current tax laws and rules.
- bookkeeping : A notoriously difficult but crucial job, bookkeeping is about keeping track of a company’s complete financial transactions. If it is done properly it’s the base for tracking the places where money is expended and how it is received.
- Accounts payable/receivable : Outsourced providers have access highly skilled people who are proficient in monitoring and managing the money due to an organization (accounts receivable) and the funds due to vendors and other suppliers (accounts to pay).
- The tax filing : outsourcing tax preparation and filing lets skilled accountants review the details of receipts, financial statements and payroll records to ensure their clients stay conforming to local, state as well as federal regulations. Tax returns are also filed in a timely and accurate manner.
Trends in outsourcing of accounting
As a profession that is known for its growth, the accounting profession constantly adapts to the ever-changing world and is constantly adjusting to the latest trends to keep an eye on for example:
- cloud-based financial accounting : Bookkeepers as well as accountants are not the only ones to have been embracing cloud-based solutions over the last few years, but their excitement for this technology is not limited. The move to cloud-based accounting allows users the ability to share and access financial information anytime and anywhere they’d like as well as new technology and software that can provide other benefits like cost savings as well as a better user experience.
- Skills updated: with executives under constant pressure to convert their ideas into profit, there is an increasing expectation of their accountants to do more than do the math, instead, but to act as financial advisers. That means they must have an understanding of the financial and accounting laws and the capacity to convey authority and confidence in person and on the internet. With their investments in this sector outsourcing companies are leading the way with hiring professionals with the most recent skills and qualifications to accomplish this.
- Automatization: The rise in artificial intelligence and machine learning will lead to increased automation in the accounting industry and, consequently accounting and bookkeepers are able to concentrate their time on tasks that are more valuable. Since manual tasks like recording invoices, reconciliation and data entry increasingly becoming automated, outsourcing firms are able to provide better speed and accuracy, and have more time to advise their clients on all aspects of financial.
The best accounting outsourcing destinations
From humble beginnings in the outsourcing industry, the market for global outsourcing has grown at an exponential pace as governments recognize the benefits of offering services to other countries. This is particularly true for the accounting and bookkeeping industry which has seen several countries investing in fostering the development of such talents.
- India: a world-class outsourcing industry. India is top of the list of countries that companies will be considering when it comes to outsourcing specific tasks. As the world’s second-highest populous country, second only to China there’s plenty of talent available and the infrastructure in India is constantly improving. Although English is popular, problems caused by the language barrier could be a deterrent for certain Western companies and the rising costs are beginning to put pressure on the cost advantage.
- Brazil: the South American nation is a rising international player in the outsourcing market and is especially appealing to U.S. businesses since it’s located within that same timezone. Brazilians provide a wealth of expertise in business mechanics and accounting, and the country itself has made huge strides in terms of communication and infrastructure on the heels of having hosted Brazil for the 2016 Olympic Games. Many business owners continue to be worried about administrative issues, and the difficulty in communicating with Brazilians.
- Ireland: well-established within The European Union, Ireland offers the best education system and technological culture that’s among the top around the globe. Another benefit is that they have English as their primary language. Additionally, their reputation for being friendly, hardworking employees can be appealing to businesses who are looking to outsource accounting. There’s a reason that only a handful of developed nations make it onto this list and that’s because their services are more expensive. cost. The smaller number of people living there implies that Ireland produces fewer accountants as compared to India or the Philippines.
- The Philippines: A government that is dedicated to supporting its outsourcing sector, The Philippines has emerged as one of the top offshore destinations in the world. This is even more relevant to the accounting industry that is with more than 175 000 Certified Public Accountants (CPA) in addition to nearly an additional 8,000 new employees joining the workforce each year after passing their boards. Take into account the fact that The Philippines is home to at least as many accountants who are not CPAs and you can see why so many local businesses are benefitting from the services of Microsourcing.
These benefits include cost reductions of up to 70 percent and an improvement in quality and efficiency, and the opportunity for teams in-house to swap the tedious and repetitive accounting work to more lucrative advisory tasks that improve their business their bottom line. As one of the more active countries within the East Asia region, The Philippines is also a part of an economic and fiscal system similar to the one in Western countries.
Summary
If you are a business owner who has not yet considered outsourcing accounting now it’s not an issue of arguing whether this concept is viable, however, they must consider why they aren’t not yet able to benefit from the benefits. Access to professional accountants and bookkeepers to take on the complicated and time-consuming tasks at less than the costs of onshore is a single opportunity to expand your business in a period when it has never been more vital.