What’s the best strategic approach to outsourcing finance and accounting

Efficient finance and accounting processes are crucial in ensuring smooth operations and sustainable growth in every business, regardless of its size or industry. 

Finance encompasses the management of a company’s monetary resources, while accounting involves the systematic recording, reporting, and analysis of financial transactions. 

Together, they provide a comprehensive view of a company’s financial health, enabling informed decision-making and strategic planning.

As businesses strive to optimize efficiency and focus on core activities, outsourcing finance and accounting functions have emerged as a viable solution.

In the 489th episode of the Outsource Accelerator Podcast, Atty. Jose Calsas Jr., Chief Financial Officer (CFO) of D&V Philippines, highlights how their team helps global firms transform their financial management and drive business success.

Outsourcing finance and accounting: An overview 

Outsourcing finance and accounting involves entrusting financial tasks to external service providers rather than handling them in-house. 

Outsourcing firms like D&V Philippines offer a range of services, including:

• Bookkeeping
• Financial reporting
• Tax preparation
• Payroll processing
• Strategic financial analysis

D&V Philippines started with five CPAs and over a decade of industry experience, it has grown to over 1,000 finance and accounting professionals catering to international businesses. 

Although D&V Philippines operates locally, “We are mostly catering finance and accounting services to our foreign based clients.

We have clients in the US, Australia, UK, New Zealand, some parts of Europe, and Asia” Atty. Calsas explains. 

Working with remote finance and accounting professionals means that multinational companies can leverage the following:

• Cost savings
• Access to seasoned finance and accounting specialists 
• Improved accuracy and compliance
• Scalability to accommodate business growth

Businesses can also stay updated with regulatory changes and technological advancements without the need for significant investments in training or infrastructure.

According to the CFO, they help businesses by “Getting to know how you handle the day to day finances, not only that affects the people, but also your own…

And how you contribute to the success of a company and how the company would later on contribute [to the growth] to giving jobs, security, and other opportunities for people.” 

Tips for outsourcing finance and accounting 

While outsourcing finance and accounting presents abundant benefits, it also comes with certain considerations. 

Here’s how businesses of all shapes and sizes can successfully outsource their finance and accounting functions: 

1. Define clear objectives and expectations

Before outsourcing, clearly outline your objectives and expectations. Define the scope of work, desired outcomes, timelines, and communication protocols. 

This ensures alignment between your business goals and the services provided by the outsourcing partner.

In the podcast, Atty. Calsas shared his experience with various businesses over the years,

“Clients would always say that they would like to do outsourcing because they want to focus more on managing the business and just delegating the finance and accounting part to a provider like D&V.”

2. Choose the right partner

Selecting the right outsourcing partner is crucial. Look for firms with:

• Relevant industry experience
• Proven track record of reliability and quality
• Certifications (e.g., CPA or CFA)

Conduct thorough due diligence, including client references and reviews, to ensure compatibility and trustworthiness.

When asked about how a company can ensure that its chosen outsourcing partner is credible and reliable, Atty. Calsas says…

“I always mention this because it’s our concept here in D&V that an outsourced provider should be able to eliminate, standardize, and automate key processes of the client’s business. 

Otherwise, we are just transferring the costly venture of internal process to an external resource.”

3. Establish effective communication channels

Establish open and transparent communication channels with your outsourcing partner. Communicate goals, updates, and feedback regularly to maintain alignment and address any issues promptly. 

Utilize technology such as video conferencing, project management tools, and secure communication platforms to facilitate collaboration.

4. Ensure data security and compliance

​​When outsourcing finance and accounting, robust security measures to protect sensitive financial data are a must. Verify that your outsourcing partner complies with industry regulations such as GDPR or HIPAA, depending on your geographic location and industry. 

The D&V Philippines’ CFO noted that a reputable outsourcing provider must have “a good set of data security measures that is compliant with data privacy rules and regulations.”

“It’s an important concept of our service already, ever since data privacy became a big thing in the industry.”

Both parties must implement data encryption, access controls, and non-disclosure agreements to safeguard confidential information.

5. Monitor performance and quality

Continuously monitor the performance and quality of outsourced finance and accounting services. Establish key performance indicators (KPIs) to track metrics such as accuracy, timeliness, and customer satisfaction. 

Regularly review reports and conduct performance evaluations to identify areas for improvement and ensure alignment with business objectives.

6. Stay engaged and involved

While outsourcing allows you to delegate tasks, staying engaged and involved is essential for success.

Maintain regular communication with your outsourcing partner, provide guidance and feedback, and actively participate in strategic discussions. 

By fostering a collaborative partnership, you can maximize the value derived from outsourced finance and accounting services.

Elevate business growth while outsourcing finance and accounting services 

Outsourcing finance and accounting functions empowers businesses to foster growth by freeing up valuable resources and accessing specialized expertise. 

By partnering with trusted external providers like D&V Philippines, companies can:

• Enhance financial accuracy
• Ensure compliance
• Focus on their core competencies

Outsourcing “[streamlines] the processes brought by a team that is highly experienced and values really the automation aspect, the efficiency of the processes” Atty. Calsas adds.

This strategic move not only drives operational efficiency but also supports informed decision-making and strategic planning. 

As businesses embrace outsourcing, they position themselves for sustainability, competitive advantage, and long-term success in an ever-evolving marketplace.