Accounting Outsourcing Services: Is it still Relevant?

Through the years, we have seen accounting outsourcing services gain traction and establish a strong reputation.   

In fact, the global finance and accounting business process outsourcing (BPO) market was estimated at USD 60.31 billion in 2023 and is projected to reach USD 110.74 billion by 2030, growing at a CAGR of 9.3% from 2024 to 2030.  

This growth comes as more businesses look for dependable and affordable services that make use of new technologies, especially with the BPO industry steadily expanding in fast-growing economies 

Given that this approach continues to deliver value for corporations, the question remains—is accounting outsourcing still relevant today? 

Why the Question Even Exists: Business Has Changed 

Before we dive deeper into what finance and accounting outsourcing really means, it’s important to examine why its relevance is being questioned. 

To be clear: outsourcing isn’t new. For decades, companies have turned to external partners to manage non-core functions like payroll, bookkeeping, and tax compliance. But what has changed is the pace, complexity, and expectations of doing business today. 

The accounting industry is no longer limited to routine entries and month-end reports as firms now operate in real time, under tighter regulations, and with clients or stakeholders who expect financial clarity on demand. That level of responsiveness and accuracy puts pressure on internal teams, especially those juggling multiple priorities. 

With this environment, many CFOs and firm leaders are asking tough but necessary questions: 

• Can our current setup keep up with what the business needs? 

• Should we invest in more in-house talent or find a reliable partner? 

•  Is outsourcing still a cost-effective and strategic solution? 

These questions aren’t rooted in skepticism;, they reflect a growing desire and need to adapt to modern demands. In fact, according to a 2024 Finance & Accounting Talent Market Outlook report, 90% of CFOs are outsourcing at least some accounting functions, with 83% citing talent shortages as a key driver behind this shift. 

What is finance and accounting outsourcing (FAO)?  

Given the changing market and the growing reliance on external support, it’s only natural to take a step back and ask: what exactly is finance and accounting outsourcing—and how does it work? 

Finance and Accounting Outsourcing (FAO) is the practice of delegating part or all your organization’s financial and accounting tasks to a third-party service outsourcing provider. 

These providers are often equipped with experienced professionals, industry-standard tools, and structured workflows designed to handle core financial functions with efficiency and accuracy. 

Depending on your needs, outsourcing can cover a wide range of services, such as: 

• Bookkeeping and general ledger management 

• Accounts payable and receivable (AP/AR) processing 

• Payroll and employee expense reporting 

• Bank reconciliation and financial closing 

• Management and financial reporting 

• Budgeting, forecasting, and variance analysis 

• Tax preparation and compliance 

• Audit support and internal controls 

The goal is not simply to “hand off every task,” but more on to gain access to capabilities that may be difficult or costly to build in-house, especially for firms looking to scale, improve turnaround times, or expand service offerings without overloading their current team. 

What does FAO have to offer? 

As companies deal with tighter margins, labor shortages, and rising operational complexity, FAO offers a flexible way to keep up—without having to build everything in-house. Depending on your goals and resources, outsourcing partners can support you in different ways. 

 
Heres what outsourcing providers can bring to the table:  

1. End to End Accounting Operations 

One advantage you can get from reaching out to FAO providers is that they will be able to manage the entire finance function from transaction processing to reporting.  

This setup is ideal for businesses looking to streamline their back-office operations or transition from outdated systems to a more modern, automated setup. 

2. Flexible Arrangement or Partial Support 

Another advantage is that if you’re new to outsourcing, you don’t have to commit to a full-scale transition right away. FAO allows businesses to start small and some even use outsourcing as a buffer during peak periods or to test new processes without expanding their internal accounting teams. 

This approach gives you access to highly skilled experts without the burden of long-term commitment.  Whether you need temporary help, project-based support, or niche expertise, specialized outsourcing can fill the gaps quickly and affordably—all while giving you more room to focus on higher value tasks. 

3. Long term sustainability   

There has long been a debate on whether outsourcing is a sustainable approach in doing business. Critics say FAO is not a long-term strategy for companies since it has a lower threshold for innovation, project management control and lack of quality control.   

But despite all the negative opinions towards it, FAO continues to prosper. In fact, FAO’s benefits are geared towards achieving long term sustainability. This rings true especially if you’re handling a growing business.  

A developing entity needs a reliable partner in handling their finances and that’s what FAO is for: providing tailor-fit accounting solutions no matter how complex the numbers become.  This adaptability is one of the biggest reasons why outsourcing remains relevant in today’s market. 

4. Adaptation of AI    

Opposite of what most say, outsourcing is an open table when it comes to innovation. In fact, technology has played a central role in FAO as it  bridges business and digital solutions, allowing FAO providers to provide support that adapts with current trends and regulations. As it further evolved, artificial intelligence (AI) was introduced in the industry which then transformed the current accounting approach.   

Your team can channel time and efforts to advisory work when AI is maximized in your company. Aside from reducing manual tasks, AI is used to mitigate possible risks and reduce errors in your numbers.  

It may need a little human intervention but leveraging this technology boosts your team’s productivity when used and implemented correctly.  
  

Read: AI in Accounting and Finance: Advantages and Negative Impacts  

5. Changing of roles   

When you outsource accounting services, your working environment changes. Technology becomes a central player in the way work gets done, taking over many of the routine or labor-intensive responsibilities that once consumed your internal team’s time.  

As FAO providers adopt cloud-based systems, artificial intelligence (AI), and business intelligence tools, they don’t just change the process—they transform the roles around them. 

Instead of focusing on transactional tasks, your in-house staff can step into more strategic and analytical positions such as analyzing data, supporting decision-making, or overseeing system performance to make sure everything runs well.  

This shift not only elevates the role of your internal finance team but also fosters a culture of forward-thinking and innovation within the organization. 

Common Concerns About FAO and How to Address Them 

 
While FAO has been proven to be a valuable strategy for many businesses, it's not uncommon for CFOs and business leaders to raise concerns before reaching out to these service providers. 

Below are some of the common reservations organizations have and how they’re being addressed: 

a. Loss of Control 

One of the biggest fears companies have is the idea of handing over sensitive financial tasks to an outside team and the risk that it presents. There’s a worry that you might lose visibility or influence over what’s happening day to day. 

What you can do: 

A good FAO provider will build transparency into the process. With cloud-based dashboards, real-time reporting, and clear communication channels, you can stay in the loop without micromanaging. It’s less about giving up control and more about sharing responsibility with people who specialize in what they do. 

b. Data Security and Compliance Risks 

Handling financial data comes with a huge responsibility, and understandably, one of the top concerns when outsourcing. Hence, it’s only natural to be cautious about how sensitive information will be handled, especially when your service provider operates in another country with different data privacy regulations. 

What you can do: 

Ask your potential provider about their data protection policies, compliance certifications (like ISO or SOC 2), and how they handle cybersecurity threats. Reputable outsourcing firms invest heavily in secure infrastructure and regularly update their protocols to keep their client data safe. 

c. Communication Barriers 

Time zones, language differences, and cultural gaps can sometimes lead to misunderstandings or delays in project timelines. 

What you can do: 

Look for partners with established communication processes and client service teams that overlap with your business hours. With this setup, you ensure real-time coordination, quicker response times, and a better grasp of expectations.  

On top of that, a reputable outsourcing company should be able to assign dedicated account managers to bridge any gaps and ensure clarity on both sides. 

d. Quality and Consistency 

A common concern among several organizations is whether an outsourced team can consistently meet the same quality standards as an in-house team, especially when they’re unfamiliar with your workflows, preferences, or company culture. 

What you can do: 

Use the onboarding phase as an opportunity to align expectations and establish a strong foundation. Invest time in thorough knowledge transfer, document your internal processes clearly, and ensure the outsourcing partner understands your business goals. Define KPIs and service-level agreements (SLAs) to measure performance and accountability. 

The right provider should be able to have their own internal quality assurance frameworks, such as multi-level reviews, compliance checks, and performance monitoring tools, to identify and resolve potential issues before deliverables reach your team.  

This commitment to quality not only safeguards your standards but also builds trust over time. 

e. Alignment with Company Culture 

One of the most frequent concerns is that outsourcing may feel disconnected from your company’s values, communication style, and day-to-day team culture. 

What you can do:

As discussed in our previous article, cultural alignment is something that is needed for a partnership in order to ensure that both partners are working on the same goal. It’s about choosing a provider that aligns with your company’s goals and working style. 

How to Choose the Right FAO Partner 

If you’re looking for an FAO partner, it is important to follow a series of steps to find the right accounting outsourcing service provider. Below are some of the things you need to know:  

Rule 1: Understand Your Needs  

Before anything else, establish what you hope to gain from outsourcing. Be it freeing up time to focus on core business activities or increasing operational efficiency, a clear sense of your objectives can inform the best way to delegate tasks.  

Rule 2: Research Potential Outsourcing Firms  

Cast your net wide and take time in seeking a reliable partner. Consider factors such as experience in the industry, capacity to handle your scale of work, and cultural compatibility. Careful selection can help secure a trusted relationship that supports your own firm's growth and stability.  

Rule 3: Ensure Seamless Communication  

Maintaining regular and clear communication with your outsourcing partner can pave the way towards successful collaboration. The methods and frequency of communication, along with the points of contact, should be defined from the outset.  

Rule 4: Regular Reporting and Reviews 

Track and assess the performance of your outsourcing partner regularly. This helps to identify any scope for improvement or change, and also ensures that you're getting the quality of service that you're paying for.  

Is Accounting Outsourcing Services still relevant today? 

Absolutely. If handled correctly, the decision to outsource could spearhead remarkable growth and efficiency within your firm. The right approach can also curtail costs and allow your organization to tap into a pool of specialized talents without the need to invest heavily in expanding in-house teams 

Related: Efficiency of Outsourcing as a Business Strategy  

  
THE BOTTOM LINE 

Hiring accounting outsourcing services is an important step to take in achieving your company’s growth as this is an investment you make for the firm’s future. Regardless of your business vertical, you can count on FAO to push your finances towards the green.  

Considering hiring an outsourcing partner? Look no further than D&V Philippines. Our bespoke outsourcing solutions are guaranteed to bring you the best technology and experts in the industry. Schedule a free consultation today!  

You can also download our whitepaper Outsourcing: How to Make it Work to know how we can be your ideal partner here in the Philippines. 

This article was first published on  10 December 2020 and has been updated since then for relevancy and comprehensiveness. 

Last update: 17 September 2025

Updated and edited by: Angelica Garcia