Accounting Outsourcing Explained: Everything You Need to Know to Get Started

Accounting firms (big and small) are increasing their investments in accounting outsourcing.

With Deloitte moving a third of its roles to India and EY opening its 22,000 square feet outsourcing center in the same country, leading accounting firms are zeroing in on the hiring strategy that has helped corporations grow their firms for the last few decades.

What is accounting outsourcing, how does it work, and how can you prepare your firm to leverage it in 2025 and beyond?

This article answers these questions and more.

What is Accounting Outsourcing?

Accounting outsourcing is when you delegate some of your client’s work (the repetitive, technical, or specialized work) to a third-party service provider, who may be local or in another country.

How it works

When you hire an accounting outsourcing company, they become an extension of your firm. They could use their software or be added to yours to ensure secure information exchange.

The external provider is usually a firm with its staff, workflow systems, and tech stack, so it can handle your processes and deliver the final outcomes and deliverables as agreed.

Alternatively, they can embed their staff into your firm. In this instance, they’ll work in your internal systems like your in-house staff.

 

In any case, you’ll be required to pay an hourly or monthly subscription for using their services.

Outsourcing vs Offshoring vs Freelancing

Outsourcing is delegating your projects to a third-party provider, regardless of where they reside.

 

Offshoring is when you delegate your services to a third-party accounting service provider that lives in another country, usually a country with lower labor costs.

 

Freelancing is when you delegate these services to an individual accounting professional instead of a company. This option is the cheapest and most flexible option, but it is also the most unreliable in terms of turnaround time, technology, data security, etc.

 

While outsourcing is the general term for delegating your services to a third party, offshoring is handing that service to a company in another country, while freelancing is giving that service to an accounting professional (as opposed to a company).

Why It’s Gaining Popularity

Many firms (accounting, bookkeeping, CPAs, and CFOs) are struggling to keep up with the financial demands of hiring, paying, and compensating full-time accounting staff.

 

Since there are equally qualified accounting professionals in places where they can pay for only the services without hiring and long-term commitment, it makes more financial sense for them to use these external professionals (who may be more experienced in relevant reporting standards and tax laws than their in-house staff) to get the job done.

 

This allows them to free up their internal team to focus on core, more sensitive, and profitable work.

Key Benefits of Accounting Outsourcing for Modern Firms

Cost-efficiency

Accounting outsourcing firms offer a subscription-based pricing model, where you only pay for the services you need. No employee compensation, paid time off, or payroll taxes.

This significantly reduces your firm’s operating costs while improving your client service.

For example, Finsmart Accounting provides expert accounting professionals who will work 40 hours a week (160 hours a month) for $2,600. There are no hidden fees and you don’t have to worry about a severance package when the relationship ends.

Scalability

Accounting outsourcing gives you access to a steady stream of qualified professionals who are ready to take on as much work as you have, which enables you to meet the needs of a growing client base.

Focus on Core Services

Every accountant has their favorite and least favorite services.

Outsourcing gives you the option to channel your internal team to the projects that matter most to them (and potentially your firm), knowing you can find more qualified, experienced, and passionate accounting professionals to handle the other projects.

Time Zone Advantage

The time difference between American firms and their outsourcing partners in India or the Philippines enables overnight work.

As businesses are closing for the day in the U.S., that’s when businesses are starting their day in India. This means the work you assign gets done before your next business day, which helps project turnaround time.

Access to Qualified Professionals

Aside from their rigorous accounting education, the average outsourced employee has diverse experiences working with different businesses in your client’s industry.

 

They boast a wealth of experience that can apply to your client’s financial situation.

What Services Do Accounting Outsourcing Firms Offer?

• Bookkeeping

Outsourced bookkeepers are skilled at turning your client’s raw data (receipts, expenses, invoices, and bank statements) into organized records.

They are experts at categorizing transactions and reconciling accounts, giving your clients accurate data to make sound financial decisions and comply with relevant regulations.

• Payroll

Your outsourcing provider can also ensure your client’s employees are paid accurately and on time.

This transfers the responsibility of managing international payments, calculating wages, withholding taxes, and handling benefits in compliance with relevant labor laws to your outsourcing partners.

• Accounts Payable/Receivable

Accounting outsourcing firms have proven systems for managing money going in and out of your client’s business.

 

They are proficient in scheduling bills and ensuring timely client payments to avoid late payments and related penalties. They also use technology to track payments and follow up with late-paying clients.

 

• Financial Reporting

You can also hire an accounting outsourcing company when your clients need their numbers to tell a story of their financial health.

With fluency in preparing reports like balance sheets, income statements, and cash flow statements, your outsourcing provider will help your clients understand where they stand and the opportunities for growth through accurate financial reporting.

• Tax Prep & CPA Support

The ever-changing tax landscape requires you to constantly keep tabs on the IRS, or the equivalent for firms outside the United States.

If this is not your cup of tea, there are more than sufficient qualified hands to help you complete your tax projects and help your clients claim all available refunds.

Top Countries for Accounting Outsourcing: Where to Hire and Why

India

Talent Pool: India has over 400,000 chartered accounting professionals, with as many as 14,700 more graduating every other year.

 

The average Indian accounting outsourcing professional is knowledgeable in global financial reporting standards and is up-to-date with evolving tax laws in the U.S. and other Western markets.

 

This expertise has drawn the expertise of the Big 4, who have increased their investment in the Indian outsourcing ecosystem over the years.

 

Time Zones: India is about 9.5 hours ahead of the U.S., offering U.S. and other accounting firms in Western markets the opportunity to deliver round-the-clock client service, as your Indian staff will be working during your unofficial hours.

 

Cost: You can work with a chartered accountant in India for a monthly fee of $2,600 compared to the average accounting salary of $4693 in the U.S.

 

Language: English is the language of education and business in India, so communicating with your outsourcing partners in India wouldn’t be a problem.

Philippines

Talent Pool: Like India, accounting education in the Philippines is rigorous. The country boasts thousands of qualified accountants trained in global reporting frameworks and technology.

 

Time Zones: The Philippines is 12 hours ahead of the U.S. Daytime in the Philippines is nighttime in the US, allowing offshore employees to work on their tasks while you’re off work.

 

Cost: The average cost of using a Filipino accountant is $7870.79.

Language: Being a former US territory, Filipino English bears significant similarities with American English, making it easy to communicate and collaborate.

Eastern Europe

Talent Pool: Eastern European countries like Poland and Ukraine have decent accounting outsourcing populations, thanks to their strong financial services sectors.

 

Their professionals are also trained in international reporting standards like GAAP and IFRS.

 

Time Zones: Poland and Ukraine are 6-7 hours ahead of the U.S. This creates a 2-hour overlap with American business hours, creating a decent opportunity for real-time collaboration.

 

Cost: The average cost of using an accountant in Poland, for example, is $3,723. While this is lower than in the US, it is still significantly higher than in India and the Philippines.

Language: communication would also not be a problem, as countries in Eastern Europe use English as their language of instruction.

Why India Leads for U.S. Accounting Firms

India is the preferred accounting outsourcing destination for US firms for many reasons:

• Cost Savings: The Indian workforce presents the best opportunity to save costs for American and European firms.

The cost of living is lower, competition is higher, and skilled accountants are in abundant supply, which further drives down the cost of using these skilled professionals.

• Familiarity with United States’ Accounting Standards:

Indian accounting professionals are trained in generally accepted accounting principles (GAAP).

• India’s IT Infrastructure and Investment:

Between government interventions in creating the Indian BPO Promotion Scheme (IBPS) and huge financial and infrastructural investments from the Big 4 firms (who are moving most of their operations to India), the Indian finance and accounting outsourcing ecosystem is more advanced, secure, and reliable than most outsourcing countries.

How to Choose the Right Accounting Outsourcing Firm

Evaluation Checklist

The evaluation checklist will give you the right set of criteria against which you can assess your prospective outsourcing partners.

It should contain a list of the conditions an outsourcing firm must meet to give you a sense of their competence, professionalism, and reliability.

A good checklist will help you determine the outsourcing provider’s background, technical proficiency, and cultural alignment with your firm.

What to Ask During Vetting

Here are some of the important ones to draw important information that’ll help you make an informed choice of an outsourcing partner:

• What’s your experience with my niche?
• What’s one recent tax regulation my clients should take note of?
• How will I communicate and collaborate with my dedicated staff?
• How quick is your turnaround time for selected projects?
• How do you handle negative feedback and disputes?

Red Flags to Avoid

Here are some of the signs to look out for to save your time and resources.

• Vague Answers: Vague responses usually indicate dishonesty or incompetence.  A reputable outsourcing firm should answer your questions in clear terms.
• No Industry Experience: If a firm hasn’t worked in your client’s industry, it will be harder for them to meet your client’s financial reporting requirements.
• Poor Communication: The apprehension of giving away control of your client’s projects increases when you can’t tell what’s happening with your outsourcing partner. You shouldn’t be chasing your outsourcing partner for important project updates.
• Lack of Certifications: Professional and security certifications are signs that a firm means business and takes the safety of confidential information seriously.
• No Client Review: Firms are usually happy to connect you with their past clients, because it increases their chance of winning your business. If an outsourcing company can’t provide other accounting firms they have satisfied in the past, they may be hiding a negative attribute you’d want no part of.
• High Turnover: If their staff or clients leave frequently, you’ll likely see enough reasons to leave them.

Top 5 Accounting Outsourcing Companies Worth Considering in 2025

• Finsmart Accounting

Finsmart Accounting is an India-based accounting outsourcing firm using expert accounting professionals to help CPAs, accounting firms, and multinational corporations manage their workload and staffing challenges.

In the last 15 years, Finsmart has combined a compliance-first approach with AI-powered technology to ensure timely, accurate, and scalable accounting services for 300+ clients, with a 9-year average client retention rate.

Unique Selling Points:

• Dedicated plug-and-play accounting professionals.
• Strong grasp of accounting technology that enhances their turnaround time (TAT).
• Fluency in generally accepted accounting principles (GAAP), international financial reporting standards (IFRS), and tax laws.
• A scalable subscription-based pricing model (Accounting Seat) that ensures consistent finance and accounting support.
• Advanced data security certifications.

Pricing: Finsmart’s subscription model offers the following rates:

• Dedicated Seat: $2600 per month for a dedicated professional (who works 160 hours a month).
• Hourly Seat: $20 per hour.
• USA Tax Seat: $3000 per month for a dedicated professional (who works 160 hours a month).

Service Highlights:

• Bookkeeping
• Accounts payable/receivable
• Payroll processing
• Tax Preparation
• Financial reporting
• Audit support
• CPA support

 

• InDinero

InDinero offers accounting and tax services to growing businesses using their proprietary cloud-based platform.

The all-in-one accounting service and software provides real-time financial insights to clients while helping firms reduce operational costs and focus on creating new revenue lines.

Unique Selling Points:

• Proprietary cloud-based accounting and tax software.
• Flexible plans (Essentials, Growth, Executive) allow firms at different levels of need to choose the option that suits them most.
• InDinero’s software integrates seamlessly with major accounting software ( QuickBooks, Bill, Gusto, NetSuite, etc.

Pricing

• Essential: $300/month for basic bookkeeping
• Growth: $900/month for mid-sized firms.
• Executive: $2,500/month for comprehensive CFO services.

Service Highlights:

• Bookkeeping
• Accounts payable/receivable
• Payroll
• Tax Preparation
• Financial reporting and analysis
• CFO advisory services.

 

• Connext

Connext is an accounting outsourcing provider that helps firms grow their offshore teams using accounting professionals spread across India, the Philippines, Mexico, and Colombia.

Their expertise lies in providing accounting services for businesses in real estate, health care, marketing, etc.

Unique Selling Points:

• Cross-functional services for multiple industries.
• Experience with global financial reporting standards.
• Offshore and nearshore accounting talents.

Pricing: prices range between $99/month (Bronze) and $399/month, depending on your outsourcing needs. Contact the sales team for exact prices.

Service Highlights:

• Bookkeeping
• Accounts payable/receivable
• Payroll
• Financial reporting, analysis, and tax preparation.
• Company incorporation services for startups.

• Unison Globus

Unity Globus is an India-based outsourcing firm that services accounting and CPA firms in the United States.

Its team of 500 accounting professionals is trained in the reporting and compliance requirements of U.S. businesses, which has enabled it to serve 350 clients in the last 19 years.

Unique Selling Points:

• U.S.-focused expertise with professionals trained in GAAP.
• Strong data security policies and certification with ISO 27001 and GDPR compliance.
• Proficiency with advanced accounting technology.

Pricing: The exact cost of using Unison Globus depends on a firm’s specific needs.

Service Highlights:

• Accounting and Bookkeeping
• Tax Preparation
• Financial reporting
• Payroll processing and accounts reconciliation.

 

• Innovature BPO

Innovature BPO is a Vietnam and Philippines-based accounting outsourcing firm that offers tech-driven accounting services to firms in Western markets.

Its team of 200 experienced accounting professionals has served over 50 clients for the past 10 years.

Unique Selling Points:

• Cost-effective services with high adaptability to client processes.
• Strong communication and timely project delivery.

Pricing: Prices are adapted to the client’s needs and budget. Contact the sales team for the exact cost of completing your projects.

Service Highlights:

• Bookkeeping
• Accounts payable/receivable
• payroll processing
• Tax Preparation
• Financial planning and analysis.
• Business intelligence and analytics

 

Common Challenges and Risks in Accounting Outsourcing

• Communication Gaps

If there can be communication gaps between people working in the same physical office, you should expect similar challenges for people working across countries.

Time zone, culture, and language differences can alter people’s perception of the words and phrases used in communication (especially verbally), which can result in errors.

Possible Solution

Just a little more detail and intentionality when communicating your expectations, requests, and timelines can go a long way to close this gap.

• Don’t assume you understand (or are understood by) your outsourced employee. Ask them to repeat the instructions you have given to ensure that what they heard is what you meant.
• Create a system of regular check-ins, where you discuss the work being done and align expectations to prevent things from going off course before you realize what’s wrong.

 

• Data Security

You know your client’s financial information is too confidential to share carelessly. Does your outsourcing provider know that?

If they don’t take security as seriously as they need to, they might store sensitive client data in insecure servers, which will expose them to a data breach.

Possible Solution

Scrutinize your potential outsourcing provider’s security policies and measures. Maanoj Shah, Finsmart Accounting’s co-founder, recommends asking for security certifications and compliances (such as SOC 2, ISO, GRPR) that ensure the secure storage, transfer, and handling of your client’s data.

He says that every outsourcing firm of worth should have secure data facilities, managed switches, and strong antivirus.

Onboarding Struggles

Getting someone (especially when they are halfway across the world to settle into your workflows, tech stack and culture is never a cake walk.

If onboarding is poorly done, it becomes harder for outsourced employees to deliver quality service (by your standards).

Possible Solution

Your outsourcing partner already has the technical knowledge to do the job you’re assigning them.

 

What you need to spend your time on is integrating them into your team so that they understand your SOPs like every member of your team. This is where workflow templates shine.

 

By documenting the processes of completing projects in your firm, it becomes easier for your outsourced staff to know what to do at each point of a project.

 

Why Your Accounting Firm Should Consider Outsourcing in 2025

The finance and outsourcing trend is expected to grow at a compound annual growth rate (CAGR) of 8.9% between now and 2030.

More accounting firms are turning to outsourcing due to several factors, which include:

• Talent Shortages: There is a deficit of accounting talent in the U.S., and when qualified talent is not available locally, firms have to find it wherever possible.

 

• Technological Advancement: Innovation in accounting technology has made it possible for accounting professionals to get work done from any part of the world. This has opened accounting firms up to the cost benefits of using professionals in other countries for their projects.

 

• Regulatory Complexity: As federal and state tax laws and financial reporting requirements evolve and get more complex, accountants need to stay on top of changing requirements.

Outsourced accountants are especially experienced with global tax laws and multi-jurisdictional compliance requirements.

Besides, when your in-house tax accountants are overwhelmed with basic bookkeeping and other repetitive tasks, their ability to keep up with changes in tax laws is negatively impacted. Outsourcing frees them to focus on tax planning, advisory, and everything along those lines.

• Client Expectations: As clients’ needs evolve and there are more demands for real-time insights, predictive analytics, and advisory services, accounting firms need to channel their internal resources into more strategic services.

To do that, they need more hands to take on their everyday compliance work. Outsourcing gives them access to that steady supply of qualified human resources.

Understanding the Cost of Accounting Outsourcing

What Affects Pricing?

The cost of using an outsourcing company is determined by the following factors:

• The Type of Service: The commercial value or compliance requirements of a service can determine the cost of accessing that service.
• Complexity: The professional training and expertise required to complete a project will also affect the final price.
• Region: Offshoring is cheaper than local outsourcing for U.S. and European firms because of the difference in the cost of living and labor.
• Volume and Frequency: Higher transaction volumes (or frequent reporting) require more time and workflow resources and therefore, command a higher price tag.
• Technology and Expertise: The costs of using the tools needed to do your work will increase the amount you’ll be charged.
• Service Level Agreements (SLAs): If your outsourcing provider assigns a dedicated professional to serve your firm, you should expect to pay more for on-demand access.

Typical Packages vs Custom Models

Outsourcing costs are grouped into two broad pricing models:

Typical Packages

Typical pricing packages are pre-set plans, usually grouped into tiers (basic, standard, and premium) to allow you to pay a fixed fee.

These packages are designed to help you predict the cost of outsourcing your services from the start so you can budget accordingly. If your needs are simple and straightforward, typical packages will serve you just fine, but if they are dynamic, this system may not work well for the outsourcing relationship.

Custom Models

In custom models, your costs are tailored to your unique outsourcing needs. This is most effective when your outsourcing needs are complex.

To decide your final prices, your outsourcing partner will assess your needs and define the scope to give you specific quotes.

How Outsourced Accounting Firms Handle Security and Confidentiality

Reputable outsourcing firms have strict measures for ensuring the security of your client’s data in their care.

Some of these security precautions include:

Data Handling Protocols: outsourcing companies use secure data protocols like:

• Access Controls: Outsourcing firms use role-based permission to regulate the information accessible to their staff. This ensures that any staff not assigned to a client doesn’t have to see that client’s information.
• Data Encryption: Outsourcing firms use software programs that convert data (at rest and in transit) into a cipher code that unauthorized persons can’t decipher.
• Regular Backups: This allows outsourcing providers to back up work and client information in secure servers to prevent permanent loss or damage.

Cloud Accounting Safeguards: outsourcing firms also use secure Cloud Providers: outsourcing data centers also partner with web hosting companies like AWS or Microsoft Azure to access security infrastructure like firewalls and intrusion detection to prevent unauthorized access to their data.

NDAs, SOC 2, and GDPR Compliance:

• Non-Disclosure Agreements (NDAs): Adding non-disclosure agreements to your outsourcing contracts legally mandates your outsourcing partners to keep your data confidential.
• SOC 2 Compliance: Service Organization Control compliance ensures that firms take responsibility for the security, availability, and confidentiality of the client data. SOC (type 2) compliance means that an outsourcing firm’s processes are regularly audited.
• GDPR Compliance: outsourcing firms serving EU clients directly or indirectly, who comply with GDPR, ensure data minimization and timely deletion after use.

Final Thoughts: Is Outsourcing the Right Move for Your Firm?

Accounting outsourcing will reduce your operating costs, provide the expertise to improve service quality and scale your operations. But all of these depend on your preparedness for the relationship.

 

To help you make the most of it, we have created a structured assessment to help you identify your outsourcing opportunities, manage potential risks, and build a system that enhances seamless collaboration between your firm and your outsourcing partner.

 

Click here to download our free accounting outsourcing reading assessment.