A CFO'S GUIDE TO
Outsourcing Finance and Accounting Services
Chapter 1: The Fundamentals of CFO Support Outsourcing
As a Chief Financial Officer (CFO), you need to work with a competent team of accountants to do your job effectively.
However, finding qualified professional accountants can be tough these days. The shortage of skilled accountants continues to cripple the industry. Competing with the Big 4 and other professional services firms for talents doesn’t help either.
Outsourcing offers an effective way to bridge the skills and talent gaps in your organization — but only if you do it right. Learning the fundamentals of outsourcing your accounting department can increase your success rate in pursuing this initiative.
Benefits of Outsourced CFO Support Services
Outsourcing isn’t only for offloading tasks you can no longer handle. When used strategically, it can give you the following benefits:
1. Access to qualified accounting professionals
Outsourcing expands your reach to qualified accounting professionals, which is especially beneficial when there’s a shortage of skilled talent in your locality.
You even have the option to choose the country where you’d like to outsource. This gives you the ability to research where talent is abundant and proficient at the same time.
Outsourcing companies also perform talent sourcing on your behalf. To match you with the right talents, they filter and hire candidates based on your criteria.
You can also take an active participation throughout the selection process. This way, you can personally gauge the potential of each candidate and select the best fit for your organization.
2. Cost-effective solutions
Outsourcing is a cost-effective way to increase your accounting department’s capacity while maintaining the quality of your work.
But how exactly can you save costs when you outsource? Here are some explanations:
/ Outsourced solutions are available on a full-time, part-time, hourly, or contractual basis. You’ll only pay for the actual service you outsource compared to having a full-time in-house staff where you cover all expenses.
/ Your choice of outsourcing model can have varying price implications. Outsourcing to offshore locations, for instance, can give you higher cost savings than working with onshore service providers.
/ Because your outsourced staff is working remotely, you can cut costs in equipment, utilities, and office space, among others.
/ Technically speaking, you’re not the legal employer of your outsourced staff so you don’t have to pay for their leaves, benefits, and contributions.
An Australian dairy ingredient supplier has experienced first-hand this exact benefit.
“Outsourcing labour intensive practices had allowed our business to scale and grow rapidly in a very cost-effective way and has allowed our staff in Australia to concentrate on providing a higher level of customer service to our clients which is our competitive edge.”
- Read more about Maxum Foods’ decade-long engagement with D&V Philippines: A Case Study on an Expanding Outsourcing Team
3. Readily available resources
In most cases, specialized accounting outsourcing companies already provide the resources you need to keep your outsourced team going. This includes equipment like laptops, accounting tools like Xero and QuickBooks, and business analytics software such as Power BI.
4. Scalable services
When your company is undergoing rapid business growth, or you’re experiencing seasonal demands, outsourcing can help you scale your operations. It provides the necessary assistance to onboard new talents and acquire the equipment you need to start operations.
On the contrary, when business is slow, your chosen service provider can scale down according to your needs.
For example, you can go from a full-time to a part-time outsourcing engagement or reduce the number of your outsourced staff altogether. This way, you can lower your operational costs while still getting enough accounting support.
5. Increased focus on high-impact activities
Being a CFO comes with huge responsibilities. As the chief financial officer, you are tasked with handling your company's ESG (Environmental, Social, and Governance) requirements, digital transformation initiatives, new market trends, changing accounting regulations, and more.
With a right-hand accountant, you can focus on doing high-impact activities. Your outsourced support, meanwhile, will take care of your time-consuming administrative duties at the back end.
Chapter 2: When and Where to Outsource Accounting Support
How do you know if it’s the right time to outsource accounting support? And how near or far from your central office should your ideal service provider be?
When Should You Outsource?
Here are some of the indications that it’s high time for your department to outsource accounting and finance supporting roles.
1. Administrative accounting tasks take up too much of your time.
Administrative accounting tasks like billing and invoicing tend to be transactional and time-consuming.
But no matter how trivial any of these tasks are, these are also something you cannot easily leave out.
After all, these are essential to keep your books clean and updated.
If you’re spending time on these tasks more than necessary, then it could be time to onboard a third-party that can help you handle these areas.
2. Your company is growing fast, which changes the core focus of your in-house team.
New and more challenging responsibilities come with growth. From doing basic bookkeeping and accounting tasks, your in-house accountants must shift their gears to focus on more complex and high-level projects.
Entrusting tasks you can no longer prioritize can help you support this growth. Rather than increasing your headcount and overhead expenses, working with a specialized provider can be a more strategic and cost-effective option.
3. Your company is affected by the talent shortage, which makes it more difficult to source local talents.
The competition for top accounting professionals is increasingly getting fierce over time. Prominent companies, especially those that offer professional services, are probably eyeing the same talent you need onboard.
At first look, it can be something unfortunate. Spending a lot on recruitment while failing to attract a new talent doesn’t sound like a worthwhile investment after all.
But if you look at a different perspective, you can turn this exact situation into your advantage. Instead of competing with other companies for top talents, you can leverage their existing talent base and recruitment capabilities.
By working with specialized providers, you no longer need to worry about recruitment since they’ll take care of the entire process on your behalf. It also lets you work with accountants whose performance is managed by your chosen service provider. Meaning, they’ll simply report to you; you no longer need to worry about their payroll and other administrative needs.
The best way to know if you're ready to outsource is to conduct a thorough business analysis. By doing so, you can pinpoint inefficiencies in your accounting department and assess if bringing in a third party is the smartest way to streamline your operations.
Chapter 3: How to Find Qualified Outsourcing Companies
One of the first few steps of starting an outsourcing journey is to find providers that offer the services you need within the budget you've set.
So how do you get started?
Following any of the tips below can help you find and shortlist qualified outsourcing companies.
1. Ask for referrals
Your network remains as your most valuable resource for finding a reputable service provider.
Talk with your colleagues who have experience with outsourcing. Their first-hand experience is something you cannot readily find online. Ask them who their service provider is and how it works for them. If they have a close relationship with their provider, you can even ask them to make an introduction on your behalf.
It’s one of the things our long-term clients at D&V Philippines do — because they believe in our services, they refer their colleagues to us who are currently looking for an outsourcing provider.
Of course, standard processes are still in place such as making discovery calls and completing requests for proposals. It just makes the entire sourcing process easier since you no longer need to scour the internet for potential providers.
2. Do an online search
The internet is also an ideal place to look for outsourcing companies. However, this option can be a bit more tedious since there are tons of companies that offer similar services out there.
To streamline your search, we recommend:
/ Using the right search terms so you can get more specific results (for example, you can use keywords like ‘CFO support services’, ‘accounting support for CFOs’, ‘accounting outsourcing companies in [insert country]’).
/ Checking out online review platforms like G2 and Trustpilot.
/ Using outsourcing aggregator sites or B2B Marketplaces such as Outsource Accelerator and Clutch.
Once you’ve shortlisted potential service providers, it’s also good practice to visit their website and social media pages to get a better feel of their corporate culture.
You can also check employees’ reviews through sites like Glassdoor to see if their employees are satisfied with their working conditions.
Read Next: How Good Corporate Culture Impacts Employee Performance
3. Attend industry-specific events
Going to industry-specific events gives you an opportunity to meet and talk to service providers face-to-face. Even if you’re not yet ready to outsource, connecting with representatives from different outsourcing companies can expand your knowledge about how their solutions work and who to reach out to once the need for outsourcing arises.
On top of it, attending events also lets you forge meaningful connections with other industry leaders and be updated on the latest trends.
4. Join business tours
If you’re extra serious about using outsourcing to strengthen your accounting department’s organizational capacity, then try joining organized business tours. Just keep in mind that this option is more ideal if you’ve already decided on a location where you plan to outsource CFO support services.
This activity lets you visit different outsourcing companies within a specific location. Through this, you can gain first-hand information on their processes, how they do things at the back end, and how their office spaces and equipment look like. It also gives you the chance to observe their employees and the work atmosphere.
Joining such tours also connects you with professionals who have extensive knowledge about the outsourcing industry. There can be learning sessions, and you can also get to network with other business representatives who are looking to outsource services.
If you’re planning to bring some of your accounting and finance department support functions in the Philippines, one of the tours we can recommend is the Mike’s Business Tours because of their impartiality and professionalism. You can check out their website here to know more about their tours.
Outsourcing is an intentional process
An accounting outsourcing company that suits your business isn’t always readily available in the open. You have to do some digging — and intensive background-checking and due diligence — to get an assurance that you’re working with the right company.
Going through the process of reviewing each service provider’s capability instead of haphazardly deciding based on what’s in front of you can lead you to the right outsourcing company, just as what one of our clients did before deciding to work with us:
“Out of our choices, D&V Philippines came out at the top and after having chosen them, we have been very satisfied with the security of the data and the integrity of their work. More importantly, I was very impressed with how D&V Philippines looked out for their staff as well. Our company is very glad to continue working with them.”
- Naresh Raja, CFO of Simba Global, a global textile manufacturing and supply company in Australia
Chapter 4: Factors to Consider When Selecting a Provider
After shortlisting qualified service providers, you must then assess who among them ticks the most, if not all, of your non-negotiables.
Consider the following factors:
1. Specialization
See if the service provider specializes in the function you’re planning to outsource. It's also good to know if they have experience working with clients from your country and industry.
You must also see to it that they’re familiar with relevant laws and regulations that apply to your business and with software and tools you’re using internally.
2. Office location
As we’ve discussed in Chapter 2, the service provider’s location can have an equivalent cost implication. It’s also an influencing factor in the shared culture, values, and beliefs of the professionals who reside in that place.
If you plan to go offshore, you must outsource to a country where citizens have keen awareness of your culture. Through it, both parties can have an easier time adjusting to each other’s work behavior.
3. Corporate culture
From the macro level, let’s now move to the micro level.
Once you’ve identified where to outsource and the potential service providers from that location, the next step is to check their corporate culture.
See if their core values align with yours:
/ Do they exhibit the same level of professionalism?
/ How do they measure performance and excellence?
/ How about their organizational work ethics?
/ And despite all the seriousness of this industry, can employees still have fun while working and maintain a healthy work-life balance?
If you share similar values and goals, it’s a good indication that you’ll have an easier time aligning with your outsourcing partner.
[In photo] The employees of D&V Philippines joined Takbo Para sa Kalikasan - Air Run Edition 2024 — a benefit run dedicated for environmental awareness and protection — as part of its culture of promoting a fun work environment and leaving positive social and environmental impact.
4. Testimonials and reviews
While the company website is a rich source of information about the provider, it’s often one-sided.
To get a more holistic insight into the company, we recommend reading client reviews and testimonials on third-party sites such as online forums, search engines, or social media channels. Doing so can give you a more neutral insight into the service provider.
5. IT infrastructure
Outsourcing relies heavily on internet connectivity and a reliable IT infrastructure. Processes are mostly, if not exclusively, accomplished through cloud servers and remote access applications.
Because everything happens virtually (unless you’re opting for onsite outsourcing), you must choose an outsourcing partner with state-of-the-art IT infrastructure. This way, you can ensure fast, secure, and uninterrupted service delivery.
Related: Why the Success of a Hybrid Set Up Relies on an Adaptive IT Department
6. Employee development programs
Service providers with excellent employee development programs are considered green flags. When they care about the welfare of the employees, it only means they know how valuable the latter are in bringing top-notch accounting support to clients.
When speaking with your shortlisted providers, ask them about their learning and development programs, their knowledge-sharing culture, and how they pave an employee’s path towards career progression.
7. Attrition rates
Be wary of companies with high attrition rates as it could mean poor employee development programs and bad corporate culture.
In a real-life setup, high attrition rates could translate to the possibility of working with different accountants in a short period because the ones before them keep resigning from their posts.
If the accountants you work with keep changing, then you’ll need to go through the process of training and teaching them again about your company’s processes. It can be a series of never-ending adjustments, which you must avoid if you want to have a positive outsourcing experience.
8. Cost of services
Ask your shortlisted providers about the cost of their services. Make sure to check its inclusions — does their pricing already cover recruitment fees and other costs associated with setting up a new account?
Be clear with your intention to request a transparent cost breakdown so you can understand what goes into the service you’re trying to outsource.
For reference, the infographic below discusses the common outsourcing pricing models:
Chapter 5: Managing Your Outsourced Accounting Team
The performance of your outsourced staff can heavily dictate the success of your outsourcing initiative. While your chosen service provider plays a huge role in overseeing their day-to-day performance, your involvement still matters.
In essence, the basics of managing an outsourced accounting team are quite similar to managing your in-house accountants. Effective communication remains the number 1 factor for building a good working relationship — especially in a setting where your staff reports from the other side of the world.
Bring out the best in your outsourced accounting team with these tips that work in real-life outsourcing set up:
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Chapter 6: Setting Your CFO Support Team for Success
From the basics of managing an outsourced team, let’s now move to how you can go the extra mile to set your CFO support team for success.
Building strong connections with your outsourced staff can inspire them to do better at their jobs. Think of it as managing an accounting department, only that they’re working remotely.
To do this, you must:
1. Build camaraderie
Let your outsourced team feel that they’re a valuable addition to your in-house operations. When possible, you can pay a visit to their office so you can personally see how they work, their working conditions, and their corporate culture.
You can also invite them to your office so they can meet their in-house counterparts and observe how your accounting department operates.
2. Provide constructive feedback
Giving constructive feedback, especially when delivered well, can fast-track an employee's growth and inspire them to deliver better work performance.
Sure, outsourcing companies like D&V Philippines have mid-year reviews and annual performance evaluations to measure how an employee perform throughout the year. But as their client, your feedback on their work quality and your recommendations for improvement is just as valuable.
3. Facilitate cultural integration
The alignment of your culture and core values can make a huge difference with your outsourcing engagement in the long run. When you share the same culture and values with your service provider, you can be more confident of their service quality and work ethics.
4. Celebrate and reward good performance
As an extension of your team, you can motivate your outsourced team to do better by recognizing those who go above and beyond your expectations.
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