Since the global expansion of the call center industry, companies from all over the world outsource its cash-related operations to the Philippines – being the country with an enormous pool of skilled workers who are fluent in English. At first, most of the outsourced cash-related processes are customer service operations like sales and purchase transactions, debt collections, and remittance services. But as the BPO industry in the Philippines continues to grow, more complex processes are being outsourced to the country. Finance and Accounting Outsourcing (FAO) became a trend, with the availability of the necessary technology and growing number of finance and accounting professionals in the Philippines. Some of the FAO processes commonly outsourced are payroll, order-to-cash (O2C or OTC), procure-to-pay, and record-to-report processes.
According to a 2015 research by the Everest Group, the FAO market is now reaching its maturity with its growth rate declining to approximately 6% unlike to the industry’s double-digit growth from the previous years. With that, companies that outsource finance and accounting (F&A) functions are now more concerned with the value or quality of work than the low labor cost – improving the competition among FAO providers.
So how do you know when is the right time for your company to try finance and accounting outsourcing (FAO)?
- When your F&A department and technology is not efficient anymore.
Before you realize it, those finance and accounting strategies and technology you’ve been using for ages are already ineffective and unsuited for today’s business situations. Perhaps you’ve been wondering why your F&A processes start to develop as stagnant processes that don’t contribute much to the growth of your business.
Because of the global outsourcing competition, BPO companies offer more competitive F&A strategies and technologies that are far better than most in-house F&A departments use. These BPO companies have developed the FAO expertise through the years of experience in various verticals, strategy and tool-testing, and implementing the highest standards of staff training – resulting in better FAO procedures and technologies. That being the case, SMEs and even large-sized companies take advantage of what the BPO industry has to offer.
- When you need to take advantage of simplification.
Are finance and accounting operations your core processes? If not, outsourcing your F&A can be a very good way of upgrading and maximizing what your current F&A staff can do. Instead of making them do some of the tedious F&A tasks that do not directly contribute to the growth of your company, outsourcing those can let them focus on core competencies that can drive efficiency and growth to your business.
Outsourcing some processes can simplify seemingly complex tasks. To simplify means more space for breathing and productivity. With this, you can expect a faster turnaround time and more valuable input from your in-house staff.
- When you want to reduce costs.
Outsourcing to the Philippines lets you cut costs without downgrading the quality of work or outputs your company will get. Operational expenses and labor fees in this country are lower than most countries. When the Philippine peso’s exchange rate versus most countries is also considered, drastic cost-savings await the CEOs and CFOs who choose Philippines as their FAO destination.
It’s time to think about it
Dear CEO and CFO, your “best practices” in your in-house finance and accounting department may not be as efficient as before. Want a faster turnaround time? Want the latest F&A tools and strategies in affordable rates? Then it’s time to take a shot at what finance and accounting outsourcing in the Philippines has to offer.