Businesses are built and run on numbers. Money, financial data, taxes, cash flow, you name it. No matter how the market shifts, this will always be true. As such, every business — in every phase, at every stage, of any size — will need some sort of accounting function to thrive.
It’s this strong need that drives businesses all over the world to find solutions that will enable them to maximize the benefits of a strong accounting team, without the excessive overhead costs of managing one.
The answer: the rise of outsourced accounting services.
As with every novel solution, this one also comes with questions. What is it, really? What are the benefits of using an outsourced accounting service? Is it a good solution for your business? And if it is — how exactly does it work?
So, let’s discuss it! Let us go through each one of these frequently asked questions about outsourced accounting services and explore how you can outsource your accounting and finance function to the Philippines.
What Is Accounting & Why Is It Outsourced?
Accounting is the process of organizing, recording, and managing financial transactions, making it a vital part in many companies. Since it is a non-negotiable aspect of every business, and is therefore one of the sources of business expenses. Of course, that can be a challenge. It’s also the reason why several companies opt to outsource accounting to grow their companies, and keep records of financial transactions, in order to ensure accurate reports and success.
Having a reliable accounting team is an important part of managing your business’ bookkeeping, financial statements, and audit requirements, among other financial needs. Accounting professionals can offer support when handling transactions, and effortlessly adjust to any needs you may have. Do you need an in-house team for this? Not necessarily.
Although some companies are able to hire an accounting team in-house (as a matter of fact, this used to be the default), not all companies have the resources to do so. The solution many businesses have found, is to outsource their accounting team to the Philippines.
With the business process outsourcing (BPO) industry in the Philippines growing 8-10% annually, the country has become an ideal place to outsource accounting. Outsourcing or offshoring is a great option if you are looking to maximize in-house resources and reduce the burden of running an in-house accounting team. Accounting outsourcing your team to the Philippines, allows you to have the flexibility to focus on other areas of your company. While ensuring that your offshore financial activities are being taken care of efficiently.
Furthermore, hiring an accounting team in the Philippines provides you access to a wide range of experienced professionals that are skilled in managing your accounting needs. Whether you need a full team or just someone to handle your tax preparation, outsourcing remains to be a good option for every business owner looking for a cost-effective solution.
Another question often raised: can you just outsource everything? Of course! But more specifically, there are services and functions that both multinational corporations and small businesses across the US, Australia, and Europe tend to delegate to an outsourced accounting partner in the Philippines.
What Accounting & Finance Services Can You Outsource?
Outsourced accounting and finance services are typically grouped into four key categories, namely:
- Record keeping (including, but not limited to, bookkeeping, transaction records, etc.)
- Financial reporting (for tracking the business’ financial performance e.g balance sheets)
- Compliance (to meet relevant tax laws and accounting regulations)
- Planning and forecasting (to take it one step further and plan ahead, financially)
There are various finance and accounting roles across the abovementioned categories that you can hire through top accounting firms in the Philippines, depending on your exact needs as a business. For example, you may opt to hire one accounting professional to work on your accounts and invoices or build an entire team of offshore accounting experts that will manage your end-to-end finance function, from completing compliance requirements and preparing your reports for audits and addressing issues that may arise when it comes to your business’ finance.
Why Do Companies Outsource Accounting To The Philippines?
Although several countries throughout the globe are well-known for providing outsourcing services across various industries, including accounting, finance, and bookkeeping services, many companies have their own reasons to outsource to the Philippines, such as:
Experienced Professionals
With over 233,000 seasoned professionals, in the field of business administration and accounting, the Philippine workforce has many experienced accountants who are well-educated in the field of accounting and finance. These accountants are well-reversed in keeping a record of business transactions and managing any company finances and are more than capable of supporting your finance and accounting operations. With accounting staff and finance experts from the Philippines, businesses benefit from specialized expertise and years of experience.
English Communication Skills
Beyond expert accounting and reliable bookkeeping services, Filipino accountants are also preferred because of their excellent communication skills. With the Philippines being the 3rd largest English-speaking country in the world, many Filipinos are fluent in English. This means that Filipino accountants are proficient in speaking English, which allows them to communicate clearly and better understand and address any needs you may have. This makes collaboration easier because, when you can openly communicate with your outsourcing partner you can easily convey instructions and information to boost efficiency and ensure accuracy.
Advanced Financial Technology
Many Filipinos are experienced in using the latest accounting technology in order to give the most accurate financial records possible. By using tools and software such as Quickbooks, Xero, and Sage 50cloud, outsourcing agencies can efficiently get accurate data on financial records, in order to maintain quality in financial management.
Moreover, Philippine outsourcing companies use AI tools to effectively analyze data and record information accurately and efficiently, which is vital when handling important financial information. Using the most advanced technology, your outsourcing partner can track your finances and ensure precise data analysis.
Time Zone Advantage
Another reason for the high demand for outsourced accounting services from the Philippines is the time zone advantage. The Philippines is generally 12-13 hours ahead of Eastern Standard Time (EST) and 15-16 hours ahead of Pacific Standard Time (PST). This time difference allows for a more productive working day, flexible working hours, and can benefit your outsourced accounting team.
The time zone advantage gives you the flexibility to arrange your team's schedule in a way that can be more effective in the long run. This gives you a competitive edge among other companies, allowing you to adjust your schedule and maintain a continuous workflow. This edge is especially beneficial when there are critical financial transactions.
Lower Labor Cost
The labor costs in the Philippines are much lower in comparison to countries like the United States and Canada, because of this, the cost of outsourcing is way lower as opposed to having a local, internal team. By outsourcing your accounting team to a Philippine BPO company, you can save on overhead expenses, such as employee benefits, utilities, and office equipment. This gives you the flexibility to focus more on core company activities such as sales and marketing, which help drive revenue.
How Do You Outsource Accounting to the Philippines?
We understand that the outsourcing process can be confusing, and starting can seem like a daunting task. Below, we’ve outlined 5 steps on how to build your outsourced accounting team in the Philippines!
Here’s your step-by-step guide on how to outsource your accounting function:
Step 1: Determine Requirements
To make an informed decision, the first step is to know exactly what you need to outsource. Understand what your business needs are, and how you should clearly communicate those needs with an outsourcing agency. Do you need one full-time bookkeeper? Do you need someone to prepare your financial statements for audit during tax season? Do you need an entire accounting and finance team? It’s important to clearly define the service that you need.
Create an outline or list your accounting needs; and be open when sharing those needs. Assess the work you need completed and be ready to elaborate on the specific roles you want for your accounting team.
Step 2: Find A Reliable Outsourcing Partner
Finding an outsourcing partner such as KDCI Outsourcing, a company committed to helping you grow your offshore accounting and finance team, is a vital component when outsourcing your accounting team to the Philippines. This will help minimize the risk of errors and allow you to take advantage of the full benefits of an outsourced accounting service.
Based on your accounting needs, you can further determine what company would work best for you. Find a company that is reliable, has experience, and can be a valuable asset to your offshore team. The best way to find a company is to do thorough research on their accounting services or contact the company for any further questions you may have.
Your outsourcing partner should be able to support your company’s accounting and finance needs and be able to adapt to business and regulatory changes.
Step 3: Develop An Accounting Plan
To ensure your business’s success in accounting, it is important to formulate a thorough plan. Outline steps for different accounting tasks and inform your outsourcing partner of any expectations.
Ensure data security when discussing financial transactions to make sure information is not leaked on unsecure. Communicate with your outsourcing partner any questions or concerns you may have about security and confidentiality. With a clear accounting plan in place, it will be easier for you to plan ahead and make sure that your finance function is always aligned with your overall business goals.
Step 4: Constantly Communicate Your Needs
Once your team is built, it’s also crucial to maintain open and clear communication lines across the entire process. Inform your team of any requirements you have and state your needs in an organized and clear manner to help ensure quality work. Be able to communicate with your offshore team any vital information about the accounting process or any preferences you may have when managing financial transactions.
Since your team is well-versed in accounting and finance, you will not need to give them any basic training, but just inform them about procedures you want done in a specific manner. This way, you can get both expertise and a strong culture match. Talk about a win-win for all!
Step 5: Further Monitoring & Collaboration
The final step is to continually monitor or evaluate accounting and financial processes.
Hold regular meetings and give constructive criticism about any financial management concerns. Continue to collaborate and discuss what is beneficial for your company in the future, and how your offshore accounting team can further support your business. Raise concerns promptly and prepare for any future obstacles such as changes in accounting regulations or client demands.
Your outsourcing partner should be like an extension of your own team, helping grow your business and helping you reach your company’s full potential.
And that’s it! Five easy steps and you’ll already have your accounting and finance processes covered. Now, it’s just a matter of getting started. If you’re looking for a sign, this is it. Outsource your accounting functions today, your future self will thank you later.
Outsource Accounting Services To The Philippines
We understand that it can be difficult to build a reliable outsourced accounting team that can seamlessly collaborate with your business and contribute to the future growth of your company.
Here at KDCI Outsourcing, we find skilled professionals who are highly experienced and can help you with your accounting and finance needs. We are committed to helping you build your offshore team to the Philippines and have several professionals in general ledger management, financial specialist, credit control, and more! These individuals are experienced in offshore finance & accounting services and can assist you with any of your needs.
Learn more about outsourced accounting and finance. Contact us today!
