Philippines vs. India – Where Should You Hire Offshore Accountants?

You can hardly search for anything about offshore accounting online without stumbling on India and the Philippines.

The two countries dominate the conversation, and while accounting generally requires a defined set of skills, each of the two countries presents unique advantages that help firms in the U.S., U.K., and Australia, solve their specific capacity challenges.

In this article, we compare the two countries (India and the Philippines) to show where they excel and when you can use them.

Why Businesses Are Turning to Offshore Accountants

Market trends in accounting outsourcing

• Shortage of Accounting Talent: The Western market continues to struggle with a shortage of accounting professionals. The older generations are retiring as quickly as the younger generations are losing interest in the profession.

This has left accounting firms in countries like the U.S. to shift their focus to offshore staffing to meet evolving client deliverables.

• Growth in Technology and Remote Work Culture: No matter the skill and availability of offshore talent, if the technology to manage your work and team remotely did not exist, using offshore professionals wouldn’t be possible.

Currently, an accounting firm in the U.S. can manage work, clients, and a distributed team conveniently using a tech stack that comprises all the tools (QuickBooks, Xero, Financial Cents, Liscio, SmartVault, etc.) they use for work and collaboration.

• The Rise of Offshoring Companies: Offshore companies help offshore accounting professionals make up for their accounting skills gap to compete on a global scale. They also help with HR responsibilities and provide the tools and environment for your offshore professionals to work in without worrying about data security.

Key Benefits of Offshore Hiring

• Cost-efficiency: Offshore professionals can deliver the same quality of work as their local counterparts in the U.S., but due to labor costs, offshore teams charge way less than accounting teams in the U.S.

• Wider Talent Pool:While the accounting population in the U.S. is shrinking, the reverse is the case for the offshore accounting population. Between India and the Philippines alone, there are over 600,000 CPA-level accountants. India, for example, adds 20,000 chartered accountants (CAs) to its accounting population every year.

These accountants are trained in global accounting standards to deliver the highest quality of services in their specialized accounting domain and industry.

• 24-hour Client Service: The time difference between offshoring countries like India and their clients in the U.S. or Europe. This enables offshore teams to get work done while their U.S. teammates are asleep.

The result is a faster turnaround time because the tasks assigned in your day get delivered by morning because your offshore team worked while you slept.

• Operation and Strategic Flexibility: Offshoring companies provide their services on a short or long-term basis. There’s no pressure to commit to a long-term relationship.

This enables you to meet the seasonal increase in client demands without the financial commitment of full-time employment.

The Case for Hiring Offshore Accountants in India

Highly skilled talent at competitive costs

India has the highest offshore accounting workforce in the world. Its 400,000+ chartered accountants are trained in the rigorous standards set by the Institute of Chartered Accountants of India (ICAI), which is ethically and technically similar to the accounting standards in the United States.

This expertise enables them to provide complex, process-driven services, such as tax planning, controller-level cash flow management, and audit support.

Despite their skills and level of education, Indian accountants are significantly more affordable than their counterparts in the United States, available for as little as $7 per hour.

Strong IT infrastructure & automation expertise

The Indian government and the Big Four accounting firms have invested heavily in IT infrastructure, which has exposed the Indian offshoring professionals to advanced financial technology.

They are proficient in automation software (QuickBooks, Xero, NetSuite, Financial Cents, Canopy, etc.) that U.S. firms use for project, client, and team management.

There are high-security offshore service delivery centers all around the country, from Mumbai to Pune to Bengaluru. These facilities are equipped with biometric access verification systems, surveillance tools, and internet backup systems in line with global information security requirements.

Deep expertise in international tax & compliance

In addition to its 400,000 Chartered Accountants, India has hundreds of thousands of accounting professionals trained in global accounting standards, like the GAAP and IFRS.

Indian Offshoring companies also invest in training their employees in U.S. tax and regulatory compliance, enabling them to meet the tax preparation needs of national and multinational businesses.

The Case for Hiring Offshore Accountants in the Philippines

English proficiency & cultural compatibility

The first draw of the Philippines workforce is its fluency in oral communication. Like India, English is the official language of education and business relations in the country, which makes them comfortable handling client communication.

As a formal territory of the United States of America, the country’s business culture is similar to that of the U.S. Combined with their large-scale consumption of American media, its talents share similar social similarities that enhance team integration and make them well-suited to client-facing accounting roles.

Well-established BPO industry

The Philippines has one of the most mature business process outsourcing (BPO) systems (second only to India). That is why global brands like Accenture, IBM, and Wells Fargo run major operations out of the country.

Government investment in the BPO industry has also helped to create a secure offshoring ecosystem, boosting data security with redundant internet connections, backup power, and strict data security protocols.

Offshore accountants in the Philippines are familiar with working shifts that align with U.S. business hours to enhance real-time collaboration and team alignment.

Availability of CPA-certified professionals

While the Philippines may not have as many accountants as India, it still has a sizeable number of CPA-level accounting professionals who are trained in international accounting standards.

There are currently 200,000 CPAs in the country, and about 8000 more join that population every year.

Offshoring firms like TOA Global also train their employees to ensure proficiency in advanced accounting software. This enables them to work in the systems that U.S. accounting firms use for work.

India vs. the Philippines – Key Factors to Consider

Cost of Offshore Accountants

India is the World’s most affordable offshoring destination due to its low cost of living and huge supply of labor. Entry-level accountants in India cost between $7 and $12 per hour. More specialized roles may cost more.

The cost of offshore accountants in the Philippines is slightly higher than in India. Filipinos charge between $9 and $14 for entry-level roles, while senior roles may cost up to $30 an hour.

Accounting Talent Pool & Qualifications

India is ahead of the Philippines in the accounting talent pool comparison. It has about 400,000 CPA-level accountants and thousands more graduate every year.

Apart from their academic training and certification, these professionals have undergone training in international accounting principles (such as the GAAP and IFRS) and are up-to-date with tax regulations like the IRS tax forms.

On its part, the Philippines has about 200,000 CPA-level accountants with an additional 8,000 yearly accounting graduates. Its professionals are also trained in U.S. financial reporting standards and IRS requirements. Their communication strength makes them suitable for firms looking to fill client-facing accounting roles.

Technology & Software Expertise

Both India and the Philippines have excellent knowledge of accounting technology and can work on the platforms that U.S. firms use for work.

However, India has an edge in terms of technical abilities with accounting software. They also offer a higher level of automation and analytical support to accounting firms than the Philippines, as reflected in their proficiency in software solutions, like QBO, Xero, Drake Tax, Power BI, and Excel Modelling.

Time Zone and Communication Challenges

India is 9.5 to 12.5 hours ahead of most U.S. time zones, which naturally poses a real-time communication challenge for firms. However, U.S. firms have taken advantage of the time zone difference to reduce turnaround time.

They can assign work to their offshore team one day, and before resuming work the next day, their offshore team has completed their tasks.

Moreover, Indian Offshoring companies offer clients the option of adjusting their working hours to align with U.S. time zones for real-time communication.

The Philippines, on the other hand, is 12 to 13 hours ahead of U.S. time zones, which also impacts real-time communication, unless they adjust their working hours to align with their U.S. clients.

Regulatory Compliance & Data Security

As offshoring powerhouses, both India and the Philippines have invested heavily in data security and privacy.

Reputable Indian firms operate from access-controlled facilities and use software that is compliant with relevant global data security regulations, such as GDPR, ISO 27001, SOC 2, etc. They have a Virtual Desktop Infrastructure that limits the exposure of client data to local tools.

Similarly, there’s also a strong system of data access control in the Philippines. Using GDPR, ISO 27001, and SOC-certified data processing systems, the Philippines understands the gravity of data security, among other data regulatory requirements.

When to Choose India vs. When to Choose the Philippines

With both countries excelling in slightly different ways, your final decision should be informed by the projects you need to delegate and the tasks you want your offshore team to be involved in.

Best fit for cost-conscious businesses looking for deep technical expertise

If your priority is to get deep technical expertise at the most affordable rate possible, India is the better choice.

That is because of:

1. The sheer size of its workforce makes accounting talent readily available, driving down prices.
2. The cost of living enables accounting professionals to offer premium service at lower rates (as low as $7).

One more reason to choose India over the Philippines is their depth of technical proficiency in accounting principles and technology. The presence of the Big Four accounting firms and the training from Indian Offshoring companies positions Indian accounting talents to serve its U.S. and European clients to meet compliance and reporting requirements.

Best fit for businesses prioritizing language & culture

Firms that want their offshore accountants to handle client-facing tasks often choose the Philippines due to their cultural alignment with U.S. business norms.

Filipinos are more comfortable engaging with U.S. customers for follow-ups and advice.

Their United States-style education system and cultural influences make the Filipino accent more understandable to accounting customers.

Hybrid approach: Hiring from both locations

You can also hire professionals from both countries to enjoy the best of both worlds: the deep expertise of the Indians and the client-facing skills of the Filipinos.

This strategy will enable you to assign the technical, back-office work (reconciliations, tax compliance, financial audits, etc.) to the team in India and the Philippines to handle client-facing tasks (such as accounts receivable and reporting).

How to Get Started with Offshore Accounting

• Define Your Business Need

Some firms delegate their projects to offshore teams to reduce the time spent on specific tasks. Others do it to free up a senior team member’s time for strategic work. Your reasons for wanting an offshore team may be different, but you have to be clear about them.

It is when you are sure of this that you can rightly determine what your budget, destination, and offshoring model will look like.

• Identify the Right Offshore Location

As we’ve seen, India’s technical expertise is high, so, it is a better choice when looking for quality and affordable work. The Philippines, on the other hand, handles client-facing roles better. Be guided by the type of work and the nature (and frequency) of their client engagement to determine your destination.

• Choose Your Hiring Model

You can hire your offshore employees through:

• ➤ An offshore accounting firm: In this case, the firm handles the offshore team’s HR, infrastructure, and background checks.
• ➤ A talent marketplace or freelancer site: The marketplace gives you access to accounting talent who work for themselves. Here, you are responsible for their HR, infrastructure, and background checks.

• Evaluate the Providers and Candidates

Once you have a list of possible partners, assess their expertise, pricing structure, data security infrastructure, and other important details that will guide your working relationship.

After evaluating the offshore firms, proceed to the dedicated professionals you’ll be assigned. This is where you test their technical qualifications, tool proficiency, and communication skills.

• Onboard the Offshore Team

The onboarding phase allows you to set them up in your systems, providing standard operating procedures (SOPs) and defining key performance indicators and reporting structures.

Questions to ask potential offshore providers

The following questions will help you understand and evaluate offshore providers more effectively.

1. What industries do you specialize in?
2. Do your staff have experience with U.S. tax laws and financial reporting?
3. What data security protocols are in place?
4. How is client data stored, accessed, and transferred?
5. How do your teams handle meetings, project updates, or escalations?
6. What are your pricing models, and are there minimum commitments or long-term contracts?

Choosing the Right Offshore Accounting Partner

Examples of Businesses Outsourcing to India & the Philippines

Example 1:

How This 15-Person Firm Grew CAS Revenue to 50% Using Finsmart Accounting

When this 15-person accounting firm was crumbling under the weight of repetitive accounting work (bookkeeping, AP/AR, month-end close, etc.), they turned to Finsmart Accounting for help.

Within 18 months, our prequalified offshore accountants freed up their time, grew their client base by 30%, and divided their revenue streams into 50% client advisory and 50% accounting work.

“The Sales Tax report is done quarterly, requiring a complex pivot table and great attention to detail. The Finsmart Accounting team executed this with excellence, saving me significant time. I was very impressed with the work and the overall results.”

— Nikki, Thrive Business Services.

Example 2:

How DS Audit Services Grew Their Team to 12 and Regained Work-Life Balance

The founders of DS Audit Services found themselves struggling to maintain a work-life balance when the firm’s workload began to expand before the COVID-19 pandemic.

When the pandemic hit, they outsourced their services to TOA Global, an offshoring firm in the Philippines.

The relationship, which began with just one offshore member, grew to 12 within three years, enabling the firm to meet its client demands and grow.

“TOA transformed our onshore team because we can focus on high-level things… We can develop as a business rather than a team, just doing the audit files and just doing the work.”

— Dinesh Nanayakkara, Founder of TOA Global

Why Finsmart Accounting is the Preferred Choice

Finsmart Accounting has built a solid reputation as a reliable, process-driven offshore partner for accounting firms across the U.S., U.K., and Australia.

It is trusted for its:

• Domain Expertise: beyond our team’s qualification and understanding of GAAP principles, we ensure continuous learning to stay up-to-date with changing standards and industry requirements.
• Flexi-Tech Model: The Finsmart Accounting team knows how the various accounting software works and is ready to work with what you’re already using to manage work and collaborate with your team.
• Flexi-Scale Model: You can get any number of accounting talents you need to meet your evolving workflow needs. You won’t have to commit to a long-term relationship, and we don’t require you to hire any more employees than you need.

Whether you’re ready to scale your tax preparation capacity, offload time-consuming bookkeeping, or build a more flexible team, Finsmart Accounting can make it happen.

Let us build you an offshore accounting team you can rely on today. Click Here to Book a Free Consultation Now.