Written by Dion Jay Tality
The global economic downturn and cost-reduction measures of foreign businesses can further help grow the Philippine outsourcing industry. Companies continue to use global business services (GBS) and outsource processes to the country. For example, they can access accounting outsourcing services in the Philippines.
Accounting involves managing your business finances. The Philippines is home to a pool of highly skilled professionals, not to mention a favorable business environment and full government support. Hence, hiring an offshoring provider in the Philippines is a good idea.
But how do you outsource accounting services to the country? Read on to find out.
Eight Key Steps in Hiring Accounting Outsourcing Services From the Philippines
Business process outsourcing (BPO) is a popular solution for optimizing operations and reducing costs. Offshore outsourcing, in particular, helps companies significantly cut expenses without compromising service quality. How? Third-party service providers are committed to serving clients by strictly following service-level agreements (SLAs).
BPO covers both front-office (customer-facing) functions and back-end operations. Businesses also outsource administrative work such as accounting. Accounting entails financial recording, analysis, reporting, and forecasting. Companies usually delegate this task to a reliable service provider so that they can focus on their core operations.
Outsourcing accounting functions to the Philippines can be wise since the country is the world’s BPO capital. This strategy can help you save time and money while ensuring high-quality financial management. But navigating the hiring process and selecting the right offshore provider can be challenging, particularly for those new to outsourcing.
Do not worry; we have rounded up the critical steps in hiring accounting outsourcing services from the Philippines. Here is how to access qualified talent in the country and make the most of their services:
1. Audit Your Current Accounting Operation
Before you start outsourcing to the Philippines, examine your current processes. You are probably considering outsourcing because you face challenges in your accounting processes. But you should dig deeper to understand the root cause of your problems such as:
- Lack of Expertise. You might employ bookkeepers tasked with recording and reporting your financial transactions. But you need accountants for financial analysis and business forecasting.
- Outdated Technology. You are manually tracking your financial instructions or using pens and paper to do that. You need to leverage automated software to reduce manual work and accelerate calculations.
- No Standard Operating Procedures (SOPs). Your accounting process does not have organized workflow. You need experts to streamline your accounting processes.
You can identify your business needs when you get to the bottom of the problem. From there, you can decide which specific tasks to outsource. That leads us to the next step.
2. Decide Which Accounting Tasks To Outsource
You can decide which accounting tasks to outsource after auditing your current accounting operation. Your decision should depend on your business needs, goals, and budget. Common accounting tasks to outsource include:
- Bookkeeping entails recording all your financial transactions and creating financial reports.
- Payroll processing involves tracking employees’ working hours and disbursing their salaries.
- Tax reporting requires preparing and submitting tax information to the proper authorities to comply with tax laws and regulations.
- Financial analysis entails analyzing your business cash flow, including income and expenses.
You can delegate specific tasks or the entire accounting function to a third-party service provider. Before checking out the Philippine outsourcing industry, decide which activities to outsource.
3. Study the Philippine Outsourcing Market
It is time to consider acquiring accounting outsourcing services from the Philippines. What better way to proceed than to understand the country’s BPO market? Consider the key milestones of the country’s information technology and business process management (IT-BPM) sector to guide your decision-making:
- Biggest Job Generator. It created 1.44 million direct jobs and 3.61 million indirect jobs for the country in 2021. The latest report shows this sector had 1.57 million total full-time employees (FTEs) last year.
- Top Economic Contributor. It earned $29.5 billion in revenue in 2021, contributing 7.5% to the country’s gross domestic product (GDP). Last year, it amounted to $32.5 billion in revenue.
- Provincial BPO Expansion. It has expanded its reach to the provinces, where 30% of the total industry workforce resides. The Philippine government has started preparing for the Digital Cities 2025 initiative, aiming to create more ecozones.
- Growing Business Verticals. It seeks to further fortify top industries such as retail trade, real estate development, and telecommunications. Last year, the banking, financial services, and insurance (BFSI) sector significantly contributed to the country’s BPO growth.
With all these achievements, you have every reason to consider outsourcing accounting functions to the Philippines.
4. Look for BPO Providers in the Country
After studying the Philippine outsourcing industry, you can now look for offshore providers with accounting professionals in the country. The Philippines has over 700 BPO companies; you can find one that best fits your industry type, company size, business needs, and overall budget.
To get started with your search, you have three options:
- Search Online. The internet is a goldmine for Philippine BPO companies specializing in accounting services. You can search for offshore providers on Google and visit each prospect’s website. You can also check online directories and social media platforms such as LinkedIn.
- Get Referrals. Getting recommendations from other professionals and businesses is a viable option as well. They can refer you to BPO firms in the country specializing in accounting services. Chances are that they have already outsourced financial management tasks and can provide recommendations.
- Attend Events. The last option is to attend industry events organized for the Philippine outsourcing industry. You can check events hosted by government agencies such as the IT and Business Process Association Philippines (IBPAP), the Philippine Economic Zone Authority (PEZA), and the Department of Information and Communications Technology (DICT).
After creating a list of prospects, you can proceed to the screening and selection process in the next section.
5. Evaluate and Choose the Right Partner
Whether you outsource tech solutions, customer service, or administrative work, hiring the right BPO partner is critical to success. Hence, this step is crucial to outsourcing accounting services to the Philippines.
Screen the worthy prospects on your list thoroughly. You should check their websites, ask for their credentials, and conduct interviews. From there, consider the following factors:
- BPO Record. Choose the prospects with a proven track record in outsourcing. They should have experience serving clients and handling their accounting tasks.
- Specialization. Opt for BPO service providers that specialize in the accounting field. Their extensive expertise means they can help meet your accounting needs.
- Workforce. Consider offshore providers that employ professionals with financial backgrounds. Check whether these agents are certified accountants, bookkeepers, or tax specialists.
- Technology. Factor in the technology these BPO firms use for accounting processes. As much as possible, go for the companies leveraging advanced software automation.
- Outsourcing Cost. Select BPO companies that can help you save money in the long run. Remember that you turn to offshore outsourcing for cost reduction.
- Business Reputation. Check your prospects’ reputation and see how they resonate with their previous clients. What clients have to say speaks volumes about the company’s competency and credibility.
With these critical factors in mind, you can pick a BPO partner with accounting professionals who can provide the most value for your organization.
6. Negotiate Terms and Create an SLA
After selecting an offshore provider in the Philippines, you can now negotiate the terms and conditions. The goal is to develop a service-level agreement (SLA) favorable to you and your hired service provider. This legally binding contract defines the relationships and obligations of both parties. Therefore, it should contain the following details:
- Operational Objectives. What SMART goals do you have for your outsourced accounting operation? They should be specific, measurable, achievable, relevant, and time-bound.
- Key Metrics. What key performance indicators (KPIs) should you consider? Include service efficiency, data accuracy, and business productivity as vital metrics in your SLA.
- Work Scope. What are the duties and responsibilities of your contracted provider? Likewise, you should also document your obligations to your BPO provider.
- Processes and Protocols. What are the SOPs for your accounting? Clarify them with your hired service provider.
- Pricing Structure. What is your payment obligation to the service provider? Define the pricing model, payment frequency, and payment methods previously agreed upon.
- Contract Breach: What are the legal and financial consequences of breaching your contract? This part seeks accountability and ensures the responsibilities of both sides.
Ultimately, the SLA protects both parties in their outsourcing engagement.
7. Help Your Provider Set up the Operation
Once the SLA is in place, you can access accounting outsourcing services in the Philippines. Before taking the plunge, assist your offshore provider in setting up your accounting operation.
Here are some steps you need to take to collaborate with your BPO partner:
- Set up the infrastructure and integrate their technologies with your systems.
- Create communication channels for the outsourcing engagement.
- Help the service provider train newly hired agents and create a BPO team.
- Establish SOPs for your accounting operation.
- Set performance monitoring and reporting protocols.
- Conduct a pilot run before the official launch.
All these steps help set your outsourced accounting operation on the right footing.
8. Launch Your BPO Accounting Operation
Finally, you can officially launch your accounting outsourcing services in the Philippines. After the pilot run, you can be confident that your BPO partner can effectively handle your accounting operation. Give them the freedom to operate but offer help and support as necessary. Make sure to strike a balance.
The outsourcing engagement does not end with the official launch, though. As with customer service and technical support outsourcing, you should ensure constant communication and collaboration. Likewise, measure your BPO partner’s performance and monitor your progress.
If areas for improvement exist, make the necessary adjustments. Regularly reviewing performance ensures that your outsourcing operation remains efficient, cost-effective, and aligned with your business objectives.
Top Reasons to Access Accounting Outsourcing Services in the Philippines
Front- and back-office outsourcing proves beneficial in many ways. Companies hiring accounting outsourcing services from the Philippines can focus on their core operations. They can ensure reliable offshore providers manage their finances well. Ultimately, that helps them maintain a consistent cash flow by earning more than they spend on their businesses.
But of all outsourcing destinations, why should you consider the Philippines? Explore the top reasons for outsourcing accounting services to the country below.
- Lower Operating Costs. Generally, the Philippines has a lower cost of living, making outsourcing in the country affordable. Not only will you save on labor costs, but you will also reduce your operating expenses such as office leases and utility bills. You can even cut expenditures on building infrastructure, hiring talent, and training people.
- Access Skilled Talent. Philippine education produces thousands of graduates annually. Some of them specialize in accounting or have financial backgrounds. Outsourcing to the country lets you tap into certified public accountants (CPAs), professional bookkeepers, and tax specialists. These experts can manage your business finances properly.
- Leverage Accounting Software. The Philippine government is serious about creating information and communication technology (ICT) hubs and establishing digital cities. Outsourcing to the country allows you to access up-to-date technologies such as contact center as a service (CCaaS) solutions for customer service and automated software for accounting.
- Guarantee Work Ethics. Did you know that Filipinos are known for their strong work ethics? They are notable for being hardworking, resilient, patient, and committed to their jobs. The same applies to BPO agents working in the industry. This is why you should consider getting accounting outsourcing services from the Philippines.
- Ensure Cultural Compatibility. The Philippines shares cultural traits with Western Countries, especially the United States. Why? The country has a colonial past with the U.S. and continued partnerships. As such, Filipinos are familiar with Western customs and business practices, making outsourcing engagement seamless.
- Improve Overall Efficiency. Outsourcing accounting services to the Philippines can boost your efficiency. An offshore provider in the country can streamline and accelerate your processes with professional accountants and automated software. With timely processing of your accounting operations, you can always stay on top of your finances.
- Achieve Financial Data Accuracy. Accounting involves financial management, which means handling financial data. You need a reliable outsourcing provider to ensure accurate, complete, and up-to-date financial information. So whether outsourcing accounting or data entry services, a Philippine offshore provider can help.
- Ensure Business Flexibility. Hiring accounting outsourcing services from the Philippines can help you scale your operations as needed without worrying about hiring or firing staff. Such flexibility benefits small and medium-sized businesses (SMBs) that should be agile and responsive to market changes.
The Bottom Line
Accounting outsourcing services in the Philippines are cost-effective and efficient. Businesses of all sizes should consider working with an offshoring provider in the country to effectively manage their financial operations.
Follow the crucial steps here to start outsourcing your accounting activities to the Philippines. Examine your business operation and hire the right BPO service provider for your industry type, business needs, and overall budget.
With the help of a reliable outsourcing provider, you can focus on your core competencies and entrust your accounting tasks to professionals to save time and money. Ultimately, you can maximize Philippine outsourcing and minimize risk.