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Everything You Need to Know About Outsourcing Your Accounting and Bookkeeping to the Philippines

With highly qualified accounting professionals in short supply in the US, organizations across every industry are finding it difficult to recruit and retain the talent they need to handle all their accounting and bookkeeping functions in-house. Many are choosing to outsource these essential functions to the Philippines—and they’re seeing great results. You may be wondering how this approach works and what to expect. Read on to learn everything you need to know about outsourcing your accounting and bookkeeping to the Philippines. 

 
What is Outsourced Accounting and Bookkeeping?

The outsourced model is used in many industries to supplement a company’s internal team, whether ongoing or during seasonal or peak periods. It’s a strategic approach that often proves a competitive advantage, enabling companies to fill hard-to-fill positions and supplement their internal staff.

With the talent shortage continuing to plague US companies—especially in highly skilled, specialized fields—more organizations are turning to the outsourced model for their accounting and bookkeeping.

When your company outsources accounting and bookkeeping, you turn the entire responsibility for staffing those functions to a third-party provider. The provider recruits, vets, interviews, and hires accounting and finance professionals who become employees of their firm. The provider also takes care of everything associated with maintaining those employees, including payroll, taxes, benefits, office space, technology, training and development, and administration.  

An outsourced accounting arrangement is designed around each company’s goals, objectives, and situation. Some companies choose to outsource all or a portion of their accounting tasks ongoing; others use an outsourced provider to supplement their internal team during peak times. Regardless of the arrangement you choose, your outsourced accounting professionals will be prepared to perform the same functions and handle the same tasks as an internal accounting staff member would.

Why is the Philippines a Good Source for Outsourced Accounting?

When your company outsources accounting and bookkeeping, you turn the entire responsibility for staffing those functions to a third-party provider. The provider recruits, vets, interviews, and hires accounting and finance professionals who become employees of their firm. The provider also takes care of everything associated with maintaining those employees, including payroll, taxes, benefits, office space, technology, training and development, and administration.  

An outsourced accounting arrangement is designed around each company’s goals, objectives, and situation. Some companies choose to outsource all or a portion of their accounting tasks ongoing; others use an outsourced provider to supplement their internal team during peak times. Regardless of the arrangement you choose, your outsourced accounting professionals will be prepared to perform the same functions and handle the same tasks as an internal accounting staff member would.

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Reliability is another reason to choose the Philippines for outsourced accounting. The country boasts a modern infrastructure much like you would find in the US, enabled by significant government support. Outsourced accounting professionals here work in modern workspaces, with high-speed Internet, reliable backup power, and other redundancies that ensure business continuity.  

Culture and language similarities are another benefit to outsourcing your accounting and bookkeeping to the Philippines. The westernized culture bears many similarities to the US and English is one of the two official languages, ensuring a good cultural match and strong, clear communication. Finally, the low cost of living in the Philippines means you can tap accounting professionals who are just as qualified as those in the US, if not more, at a lower cost. Local companies can pay their employees a salary that supports a high standard of living, while still enabling their clients to reduce their accounting and bookkeeping costs.

What Benefits Does Outsourced Accounting Offer?

The reason many US-based organizations outsource their accounting to the Philippines is simple: This approach offers many tangible benefits, especially in the current labor market.

Relieves Staffing Burdens

Keeping your accounting team fully staffed to meet your needs is increasingly challenging. Labor shortages and high turnover can leave an organization with vacant accounting positions for long stretches. Besides taxing the rest of your team, these lingering open positions can cause you to sacrifice your hiring requirements just to fill roles. And the hiring process itself can be draining, requiring time and energy that takes focus away from your core business. Outsourcing relieves those staffing burdens by turning them over to a third-party provider.

Provides Access to Top Talent

In any labor market, it can be difficult to find accounting professionals with the right experience and expertise to suit your needs. Smaller companies and those in industries with lower pay scales can find it especially tough to compete for top talent. In contrast, outsourced providers in the Philippines find it much easier to attract and retain highly qualified accounting and bookkeeping professionals.

Flexes with Your Needs

Many organizations find their accounting needs ebb and flow throughout the year for a variety of reasons. Nonprofit organizations have peak periods related to their grant cycles. CPA firms face a huge crunch during tax season. Private equity-backed companies must satisfy their investors’ stringent financial reporting requirements, sometimes as often as monthly. And of course, any organization will need to complete annual tax filing and prepare for periodic audits. It’s difficult, if not impossible, to flex up and down to meet those variable needs with a fixed internal team. Outsourcing your accounting to a provider in the Philippines enables you to get year-round support for ongoing needs, along with additional help during peak periods—enabling you to match your resources to your needs at any given time.

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Makes Industry-Specific Expertise Easier to Find

Besides core accounting functions that are somewhat standard, most companies have industry-specific accounting needs that require unique knowledge and skills. An accountant for a SaaS company needs to understand the complexities of revenue recognition for businesses with a recurring revenue model, while an accountant in a nonprofit must be well-versed in the financial reporting requirements associated with grants. These are two of the many instances where industry-specific expertise proves invaluable in accounting. Yet it can be tough to find a full-time in-house employee with experience in your industry. Outsourcing to a third-party accounting and finance provider allows you to gain that experience much more easily. 

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Fills Capability or Expertise Gaps

Some accounting functions are common across companies, such as payroll and accounts receivable, so it’s easier to find talent with this experience. Other needs may be more complex and more challenging to source in-house. Organizations preparing to go out to the capital markets for funding need sophisticated financial models to attract investors. A company that is ready to upgrade its accounting system needs help selecting the right software and overseeing the implementation. Private equity-backed businesses need robust financial data analytics to demonstrate they’re meeting their investors’ expectations. Trying to fill such gaps through your internal team can be difficult, but a third-party outsourced provider can easily supplement your team and bring in those capabilities.