Written by Allie Delos Santos
Filling accounting roles in-house is expensive due to the high recruitment and training costs. Plus, the whole process requires supervision by management. That is why some companies prefer to partner with offshoring providers in the Philippines.
Offshore outsourcing (also known as offshoring) gives businesses high-quality solutions at affordable rates, thanks to offshore destinations’ low labor costs. It also streamlines the management of accounts with less hassle and oversight.
What makes offshoring accounting processes to the Philippines a smart business decision? Read on to find out.
Eight Reasons Businesses Should Consider Offshoring Accounting Work to the Philippines
The Philippines is one of the top outsourcing destinations in the world, along with nations like India and Ukraine. Last year, the information-technology business process outsourcing (IT-BPO) sector earned $29 billion in revenue.
However, IT processes are just the tip of the iceberg. Businesses worldwide have long been outsourcing other functions to the country. Case in point: some companies offshore accounting services to the Philippines.
If you want to streamline operations through offshore accounting, it is in your best interest to consider the various solutions this nation presents.
Of course, Philippine vs. India outsourcing would bring different advantages. Here are some perks you can expect when offshoring to the Philippines:
1. Great Cultural Fit and Limited Language Barriers
Filipino culture is a mix of Eastern and Western ways of life. Western entertainment, such as music, movies, TV shows, and video games, is widely popular across the country, contributing to the country’s affinity for Western culture.
In addition, the Philippines boasts an impressive English literacy rate, which makes offshoring easier. English is one of the country’s official languages and is even the medium of instruction in private and public academic institutions. Most Filipinos consider English their second language, so communication barriers are practically nonexistent.
Another reason Philippine back-office outsourcing is an excellent solution for companies in the U.S. is the rich history between the two countries.
- The U.S. is one of the largest foreign investors in the Philippines.
- The U.S. is also the third-largest trading partner to the Philippines, thanks to a bilateral agreement signed in 1989.
- The two nations exchange around $27 billion in products and services.
Filipinos are also known for their adaptability, creativity, and hardworking nature. Once they build professional relationships, they can be fiercely loyal to business partners and clients. Thus, you can rest easy knowing that outsourcing to a Philippine BPO company gives you high-quality, efficient output and fierce brand advocates.
2. Skilled and Educated Staff
Accountancy is one of the most popular college courses among Filipinos. This means many accountants can take full-time jobs from foreign BPO clients.
Accountancy is also a challenging course. To have a degree in accounting, students must survive subjects such as taxation, business law, IT, business mathematics, and other management subjects.
The law requires licensed accountants to keep abreast of all developments in their trade. They must undergo continued formal and informal training and be familiar with the tools necessary for their field, such as accounting software. Thus, you can guarantee that your offshore contractors are proficient in accounting services.
Moreover, the Philippine college education system is primarily based on that of the U.S., further increasing the cultural similarity between the two nations. These similarities extend to the workforce. But one difference is crucial: the number of accountants in the U.S. is decreasing, but the number of accountants in the Philippines is growing with no sign of stopping.
3. Continuous Training of Certified Public Accountants (CPAs)
Filipino CPAs are mandated to undergo additional training years after licensure to ensure a high level of proficiency in their profession.
Lawmakers enacted the Continuing Professional Development (CPD) Act of 2016, or Republic Act No. 10912, to encourage licensed accountants to continue improving their expertise and knowledge. According to the law, CPAs must have 120 CPD units. The minimum required units that belong to the three major areas of CPD activities include:
- Technical competence – 30 CPD units
- Professional skills – 5 CPD units
- Professional values, ethics, and attitudes – 5 CPD units
Of the 120 CPD units required, 80 are “flexible,” which means they fall under the CPA’s chosen specialization. CPAs can also get a maximum of 48 CPD units for self-directed learning activities.
Failure to comply with this mandate prohibits CPAs from renewing their professional license, supervised by the Professional Regulation Commission (PRC).
The regulation guarantees that no accountant under the management of business process outsourcing companies stagnates in proficiency or skills. So you will work with skilled talent when offshoring accounting tasks to the Philippines.
4. Effective Outsourcing Infrastructure
The BPO infrastructure in the Philippines does not fall behind other offshoring destinations. It has an advanced telecommunications network that uses fiber-optic cables and easily accessible satellites for backup.
It also has solid outsourcing experience that has been improving for three decades. The BPO industry in the Philippines started in 1992, and today over 800 BPO companies exist in the country. The industry is one of the largest contributors to the country’s gross domestic product (GDP), which means the public and the government widely support this line of work.
The country’s long history of working with foreign clients means you can expect strong government support and a steady flow of candidates.
Moreover, the water, roads, and power systems are all dependable, especially if your offshore accountants are in major cities. Whether you are outsourcing accounting or data entry services, the Philippines proves to be a top destination.
5. Flexible Workers Who Adjust to Time Zone Differences
Although the local time zone differs from most Western countries, Filipino BPO workers are flexible and adaptable. They can adjust their work schedules and daily routines if called to work with an offshore client. Some might even prefer working the graveyard shift due to less traffic and distraction.
If you use a contact center as a service (CCaaS) or offshore accounting services to the Philippines, remote teams will operate on night shifts or during the most convenient hours. Since working the night shift is common in the Philippine BPO industry, you can easily find staff willing to adjust to your time.
By offshoring accounting work to the Philippines, you can:
- Concentrate on core competencies
- Experience a smooth transition that protects sensitive information and revolves around client objectives
- Streamline inefficient and messy processes while transferring knowledge
- Review metrics of the service provider
- Get round-the-clock support by taking advantage of time zone differences
- Adjust project scope without starting over
6. Affordable and High-quality Service
Whether it be accounting or technical support outsourcing, companies cannot deny the massive cost savings of offshore recruitment. It is one of the primary reasons for outsourcing.
The Philippines is an affordable location for your remote team. The country’s cost of living is 30% lower than that of the U.S.; contractors are happy with reasonable compensation packages.
Despite offering affordable solutions, local BPO companies guarantee high service quality. Many big names, such as Microsoft, Hewlett-Packard, Google, Wells Fargo, and JPMorgan Chase, trust Philippine service providers.
Accounting tasks you can offshore to the Philippines include:
- Trust accounting. This type of accounting requires specific training on taxes and trust accounts. Offshoring trust accountants is an excellent solution to a skill shortage.
- Accounts receivable. Cash flow is crucial, especially for small to medium businesses. Slow payment limits growth and investment opportunities. Outsourcing accounts receivable improves cash flow health and eliminates the uncomfortable task of chasing clients for payment.
- Accounts payable. Offshoring bookkeeping work such as accounts payable lets you work with a talented contractor whose sole focus is your cash flow. Now, you cannot just pay bills but also plan them. Your offshore accountant can help you manage vendor relationships and keep the money trail clean and clear.
- Payroll. Payroll tasks are a major strain on the accounting manpower of companies of all sizes. Whether managing time sheets and leave accruals or preparing pay stubs and salary payments, having an offshore accounting specialist manage your payroll accounts is better.
7. Standardized Processes and Regulations
Just as the U.S. is home to the American Institute of Certified Public Accountants (AICPA), the Philippines has the Philippine Institute of Certified Public Accountants (PICPA).
Both associations are members of the International Federation of Accountants (IFAC), which exists to support, adopt, design, and implement international accounting regulations. They manage the standardization of accounting processes in 130 countries. Being a member of IFAC means the same quality standards apply regardless of whether a CPA works in Manila or Boston.
Talent in the Philippines and the U.S. must complete the required education track, which at a minimum involves a bachelor’s degree in accounting, before qualifying for the CPA licensure exam. When they pass, they must undergo continued education and training in their specialties and comply with the same auditing procedure.
Lastly, Philippine accounting is modeled on the generally accepted U.S. accounting procedures (GAAP), which prepares graduates to work on American accounts. Offshoring accounting tasks to the Philippines produces similar results as hiring U.S. or nearshore talent.
8. Abundant Accounting Talent
Although stateside talent shows a 17% decline, accounting in the Philippines is gaining steady momentum. Many American CPAs will retire in the next few years, and most accounting graduates do not want to work in the field.
The modern labor force is rapidly changing. Workers now expect more from their employers and are unafraid to show it. Companies that understand this industry shift are offshoring accounting services to the Philippines.
This global recruitment is more than just a short-term strategy; it is a way to stay relevant and sustainable in the coming years. Offshoring lets small and medium companies access overseas staff, even without the budget of large corporations.
The Bottom Line
The professional and cultural similarity of the Philippines to the U.S., high-quality and affordable service, and abundant skilled accountants prove that the Philippines is a top offshoring destination. By working with a Philippine BPO provider, you can rest assured that your contractors are continuously trained and have knowledge of the latest tools.
While the supply of stateside accounting talent is declining, the accounting field is steadily growing in the Philippines. Home to thousands of skilled CPAs, the Philippine offshore accounting industry is here to stay.
In need of quality offshore accountants that meet your unique business needs? Look no further. Contact Unity Communications now to discuss solutions.