Offshore Accounting

Definition

What is Offshore Accounting?

Offshore accounting refers to delegating accounting tasks and services to offshore countries. Accounting is one of the core processes of a business. Companies use this to manage their finances, monitor inventory, and comply with tax requirements. However, most of them have difficulties in looking for suitable talent for their role.

This is where offshoring enters. Companies delegate their accounting services to low-cost countries such as India and the Philippines. They either get a team for their on-demand projects or an entire department to manage their workload.

As a result, they get to enjoy several benefits such as better accuracy in recording, cost efficiency, and on-time compliance.

Offshore accounting services

Offshore accounting covers more than just managing and recording finances. Accounting firms and BPOs in offshore countries specialize in different services such as:

  • Payroll processing
  • Billing management
  • Invoice processing and follow up
  • Tax compliance
  • Inventory management

Offshore accounting Philippines

Accounting, alongside customer service and information technology, is one of the most popular services to delegate offshore, particularly in the Philippines. With this, companies have the advantage of maintaining their compliance and submitting quarterly statements accurately. Accounting firms in offshore countries also assure the highest privacy and protection of their customer’s data, so businesses won’t have to worry much about data breaches.

 

What is Offshore Accounting
What is Offshore Accounting

Outsourcing FAQ

What is a Certified Public Accountant (CPA)?

What is a CPA?

A certified public accountant (CPA) is a designation for licensed professionals who are called to uphold the accountancy practice that is committed to generally serve the public interest. After passing the licensure exam and gaining the license to practice, a CPA must be committed to the prevailing laws and ethics of their discipline. Engaging in a practice (whether public or private) means taking up the responsibility to perform their duties with adherence to the Code of Professional Conduct (CPC) and generally acceptable accounting principles (GAAP).

A certified public accountant can either engage his/her profession in public and private practice. CPAs in public practice work in accounting firms that offer these primary service lines: auditing and assurance, tax compliance, financial accounting and reporting, and management advisory. Aside from firms, public practice also involves working in the government. On the other hand, CPAs in private practice work as accountants of businesses, accounting consultants, personal accountants, or as teachers of accounting-related subjects in universities.

Outsourcing CPA

Businesses can hire accountants directly or outsource through accounting firms. Outsourced CPAs can perform financial reporting duties such as the preparation and presentation of financial statements. Aside from that, they can also serve as financial advisors to a business regarding crucial decisions (e.g., buy or make). CPA's also perform audits and prepare tax returns in accordance with tax laws. Outsource Accelerator matches you with the best finance and accounting outsourcing companies in the Philippines, where you can save up-to 70% on staffing cost.

Offshore outsourcing definition

Offshore outsourcing definition

Offshore outsourcing, also referred to as Business Process Outsourcing (BPO),  is the process of having work done for your business using qualified staffing solutions from countries with lower labor costs.

About offshore outsourcing Offshore outsourcing definition About offshore outsourcing Benefits of offshore staffing Offshore outsourcing examples Offshore vs onshore outsourcing Offshore outsourcing pros and cons Pros of offshore outsourcing Cons of offshore outsourcing Offshore outsourcing Philippines

Offshore outsourcing, also referred to as Business Process Outsourcing (BPO),  is the process of having work done for your business using qualified staffing solutions from countries with lower labor costs.  Commonly IT, sales and administrative roles are carried out for businesses across the world from countries such as the Philippines and India.

Companies can benefit from accessing other countries who have more resources for people with specialized skills. One popular example of offshore outsourcing is customer service through call center companies. These BPO companies offer quality customer service at a much cheaper rate than hiring locally.

Like nearshore outsourcing, companies prefer having minor tasks outsourced so that the in-house team could focus on the vital functions of the business. One perk of offshore outsourcing for businesses is that they do not need to think about the overhead expenses for the benefits of additional in-house employees.

Overall, the company could benefit from lower human resources costs, equal or higher-quality outputs, and higher profits.

Benefits of offshore staffing

The world is becoming increasingly globalised.  Technology, software and communications improvements now enable easy access to a globalised workforce.  This has many advantages, but the primary benefits of offshore staffing are that:

You can significantly cut costs (typically saving 60%-80%) Access large pools of highly qualified and highly capable staff Source staff from across the globe instead of being limited by the local population

The benefits of offshore staffing impact small, medium and enterprise across the globe.  These businesses are able to access more affordable resources to help streamline and grow their business.  This is a win-win for all parties involved.

Offshore outsourcing examples

Companies turn to offshore outsourcing for cheaper wages and better quality work. Just like nearshore outsourcing, companies prefer having minor tasks outsourced so that the in-house team could focus on the vital functions of the business. 

One popular example of offshore outsourcing is customer service through call center companies. These BPO companies offer quality customer service at a much cheaper rate than hiring locally.

Offshore vs onshore outsourcing

The opposite of offshore outsourcing is onshore outsourcing, which is the practice of outsourcing your business functions and non-core teams to a BPO firm in the same country where the business operates. It is also commonly referred to as “domestic outsourcing.”

Unlike offshore outsourcing, the business does not save as much on employment costs – which is the main reason why businesses turn to outsource in the first place. Since the outsourcing provider is in the same country, both companies will have the same cost of living and labor laws applied.

However, with onshore outsourcing, you wouldn’t have to deal with cultural and time-zone differences.

Offshore outsourcing pros and cons

Companies can turn to offshore outsourcing for almost every business role – whether they’re in need of customer service teams, virtual assistants, bookkeepers, graphic designers, IT consultants, and more. Further, before diving into the world of offshore outsourcing, it’s best to be informed of its pros and cons.

Pros of offshore outsourcing Substantial savings Access to a flexible, diverse, versatile, and proficient offshore team Experienced and competent team leaders will guide your remote team Diminished cost and less legal responsibilities (because your outsourcing provider will take care of everything) Cons of offshore outsourcing Occasional delivery delays Time zone and cultural barriers Possible disclosure of confidential information Offshore outsourcing Philippines

The Philippines is the leading offshore outsourcing destination in the world. With 1.3 million BPO workers and counting, large corporations and even small to medium-sized enterprises all over the world trust that their Filipino workers and remote teams can provide excellent outputs, customer service, or IT assistance at a cost-effective price.

Outsource Accelerator provides you with the best customer service outsourcing companies in the Philippines, where you can save up to 70% on staffing cost. We have over 5,000 articles, 200+ podcast episodes, and a comprehensive directory with 700+ BPOs… all designed to make it easier for clients to learn about, and engage with, outsourcing.

What is Business Process Outsourcing (BPO)?

What is Business Process Outsourcing BPO?

Business Process Outsourcing (BPO) is the engagement of services from a third-party provider. BPO uses various technology-enabled services to hasten the delivery of services. The business activities could be back-office such as, but not limited to, payroll, accounting, human resources, or front office jobs like customer service, sales, and marketing, etc. In the case of content providers, these business activities could mean hiring writers, remote editors, or virtual assistants.

BPO speeds up processes and enhances efficiency. Companies that outsource some of their business activities use their time on core services and competencies. With this shift in focus, companies improve their current processes that may result in improved customer satisfaction. BPO helps companies divert their resources to more critical business strategies. Often, companies find it impractical to hire a full-time position in-house because of the cost associated with doing so.

How does Business Process Outsourcing work?

When a business engages an external specialist to manage and operate some of its internal processes, it's referred to as business process outsourcing. Such ‘processes’ include customer service, accounting and finance, or sales. It is different from hiring an agency to do specific tasks, as the outsourcing provider (BPO) is more concerned with the ongoing production of labour-intensive tasks, instead of the higher-level strategy and guidance.

Now, business process outsourcing has broadened and is more akin to staff augmentation, or staff leasing.

What are the benefits of business process outsourcing?

There are many benefits to outsourcing, as well as some downsides and risks. The common benefits include:

Cost savings: significant savings of up to 70%, leveraging the lower global salaries Global market: access to a bigger employment pool of talent Global presence: having operational across the globe increases trade opportunities Flexible workforce: reduces internal local labour and employment compliance obligations Leverage skill: leveraging the skills of other specialist companies Focus: enables the client company to focus on their core functions

 

Business process outsourcing examples

The business process outsourcing sector is a vast industry, generating over $200bn annually, and employing many millions of people worldwide. Some examples include:

Big enterprise

Facebook and Uber outsource many of their operational functions, including content moderation for Facebook, and customer service for Uber

Medium-size businesses

A medium business with 50-500 staff might outsource the labour-intensive accounting and finance functions to a team in the Philippines.

Small business and entrepreneur

It is common for small business owners to have a Virtual Assistant (VA) working for hem full time, remotely from the Philippines.

What are the different types of BPO?

The type of business process outsourcing can be characterised by their specialisation, location, and size.

Generalist or specialist BPOs

Business process outsourcing is in the human resources and professional services sector. However, their services extend across all industries. The majority of BPOs are generalist, in that they offer a full range of professional services, although some specialise in certain verticals (ie accounting, or animation).

Location

Business process outsourcing typically operates form developing nations such as the Philippines, India, and Colombia. They typically have cheaper cost-of-living and bigger populations. Different locations offer different advantages.

Size of BPO

The bigger BPOs employ more than 250,000 people. They are huge, global operations. Medium-sized BPOs range from 500-5,000 staff and offer a full range of services. The smaller BPOs might have 1-500 people.

Functions of business process outsourcing

Collectively, business process outsourcing provides any kind of staffing solution. Common functions of BPO include:

Finance and accounting: operational, technical and specialist functions Healthcare: various functions of the backend of the healthcare and health-insurance industries Creative and content: everything from post-production of Hollywood movies to newspaper and website content Tech, IT and development: network management, web and app development and maintenance Sales & customer support: ongoing sales and customer operational support and delivery Marketing: ongoing marketing, communication and branding activities Talent and HR: externalising the management of company HR, recruitment and compliance Administration: general business administration and operational activities Business Process Outsourcing (BPO) services

Outsource Accelerator is the most trusted source for independent information & advisory for Business Process Outsourcing (BPO). We have over 4,000 articles, 200+ podcast episodes, and a comprehensive directory with 700+ BPOs… all designed to make it easier for clients to learn about, and engage with, business process outsourcing.

What is Back Office?

What is back office?

Back office is a term used to classify business activities that are not directly attributable to frontline customer support, sales, and services. Back office functions relate to administrative functions which do not directly generate income or accessed by customers, but such is necessary to streamline the other processes involved in a business.

Back office functions include, but are not limited to the following: data entry, account processing, website content management, data verification, mediation, graphic design, writing and editing services, and accounting and finance services. These functions are necessary to a business yet attribute additional cost. Some companies find back office jobs costly since you need to allow a substantial amount of capital for recruitment, salaries, and employee benefits.

Outsourcing back office

In the advent of the internet age, companies can now take advantage of outsourcing, which can lessen the cost of running back offices while maximizing its full benefits. This also translates more time for you and your core team to focus on income-generating functions. Outsourcing back office functions guarantees that you are working with skilled professionals minus the hassle and cost of recruitment, as well as other operational and employee benefit expenses. BPO companies make sure that their representatives are competent enough to handle the client's needs. Outsource Accelerator lists over 700 business process outsourcing companies in the Philippines that specializes in back office administration.

 

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