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How (and Why) to Outsource Financial Services: A Guide

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The world grows ever smaller. Literally lightning-fast connections tie the world together, from Timbuktu to Tibet, Laos to Los Angeles. Nearly every continent on Earth is wired together by fiber-optic cables, while WiFi and satellites take care of the rest.

On our ever-more-networked globe, it’s easy to form relationships spanning all areas of the Earth, and it’s similarly easy to leverage them for business. For decades, business owners have made use of this connectivity for outsourcing, offloading some of their expensive in-house accounting services to more affordable service providers. And beyond cost savings, by outsourcing financial services tasks, businesses often create the very quality and efficiency they’ve been lacking.

If you’re a CFO or manager wondering whether outsourced finance and accounting could solve your staffing problems and budgetary woes, look no further. Today’s post will tell you all about what outsourced finance jobs can mean for you. We’ll discuss what it is, top tasks to outsource, its main benefits, and how to do it.

What is Financial Services Outsourcing?

Financial outsourcing, also called financial services outsourcing, is the act of sending some or all of the tasks overseen by your accounting department to an external agency. Often, these companies are overseas – think the Philippines or elsewhere in Asia – though outsourcing providers also exist within the borders of your own country (known as “onshore outsourcing”).

The main goal of business process outsourcing (BPO), as it relates to financial services, is to reduce the need for in-house account services and for expensive accounting software licenses or subscription fees. Instead, you send all tasks to an external financial service provider, whose team members are specially trained for the work. This can dramatically streamline the workflow and save costs for all levels of industry, from startups and small business to large enterprises and corporations.

This is especially true since the generic term “outsourcing” most often refers to offshore outsourcing, meaning you can leverage the difference between your economy and that of a developing nation. The lower cost of living in your outsourcing partner’s country also means greater savings for you, which we will discuss more below.

For now, let’s turn our attention to just how you can make use of financial outsourcing.

Top Financial Services Tasks to Outsource

Outsourcing finance usually means reducing the amount of work that happens in the back office, reducing the accounting systems you have to manage in house, and shunting it to expert service providers in other countries. Outsourced accounting means your finance team can let go of the bookkeeping, cash flow, and data analysis for which they’re overqualified or too busy.

More specifically, you can outsource such finance and accounting functions as:

  • Accounts payable / receivable
  • Payroll processing
  • Financial forecasting
  • Financial planning
  • Consolidating financial data
  • Financial statement reporting

These tasks, which don’t require face time with clients and customers, are perfect for sending overseas. They still get done in real-time, leveraging the same cloud-based software that your in-house team relies on; while freeing up your remaining financial team to focus on their core competencies.

Benefits of Outsourcing Your Financial and Accounting Services

What will you get out of outsourcing, you’re wondering? Let’s take a closer look.

Access Top-Quality Talent

No longer must you confine your talent search to the nearby cities and boroughs. Now you can access talent from anywhere in the world. That means you’ll have access to a much greater pool of candidates. Plus, outsourcing companies train employees in specific core competencies, so they’re likely to be more knowledgeable and efficient in their areas of expertise than generalists here at home who are forced into wearing too many hats to excel in any one of them.

Streamline Your Finance Department

With the help of an outsourced team, you can streamline both the people and the functions in your financial department. Build a team full of experts who work together, passing files from one digital desk to the next in an efficient and cost-effective workflow that saves time and maximizes cash flow. As a bonus, not only do you save money, but your financial operations start going much more smoothly.

Reduce Your Hiring & Operational Costs

Once you have a smaller financial operations team under your physical roof, managing your daily business needs will become less time-consuming. With fewer in-house employees, your overall employment and operational costs will decrease—this includes everything from staffing and payroll, benefits, office space requirements, hardware, and software subscriptions.

Offload Process-Heavy Work

Any work that has a set process that can be followed, and requires little decision-making, is great for outsourcing. This allows for full-time, in-house teams to focus on creative decision-making, strategizing, and other efforts that only their highly trained and specialized skill sets can handle.

How to Outsource Your Financial Operations

Outsourcing your business needs is a great idea, but that doesn’t mean it is without its pitfalls. If you’re going to make the jump, you’ll need to find a trustworthy outsourcing partner – one who will maintain excellent cybersecurity protocols while saving you money and reducing your need for full-time, in-house staff.

The following steps will lead you through the process of determining your financial management needs, so you can make the most of automation and cost savings, and say goodbye to hassle forever.

1. Identify Your Business Needs

Before you even talk to potential BPO providers, think through your own needs. This isn’t just an exercise; it’s critical information that potential partners will need to offer quotes, draw up contracts, and kick off your relationship. Ask yourself questions such as:

  • Whose time is being wasted on menial tasks?
  • Are any team members essentially doing the same process-heavy job, and could be consolidated with a lightened workload?
  • Which software budgets contribute most to bloat?
  • Are you failing to provide any services to clients and customers because you’re too busy or overwhelmed?

If you can, draw up a list of every finance function in your accounting department, then separate them into two buckets: those you really need to oversee in-house, and those that have to get done regardless of who does them. The second list constitutes those tasks you can offshore immediately.

2. Determine Your Outsourcing Budget

Now, time to look at the budget. If you’ve rigorously completed the above exercise, then you should have freed up a considerable amount of money from combining job functions, moving staff from full-time to part-time, and focusing on core competencies to increase profits.

You can now put those reassessed functions—and the salaries that had been dedicated for them—toward your outsourcing needs. With this budget calculated, and your awareness of what functions are being outsourced, you can now start your search.

3. Work With a Knowledgable Partner to Find the Best Outsourcing Providers

The good news is, the world is absolutely awash in outsourcing options. The bad news is, the world is absolutely awash in outsourcing options. It is therefore difficult to separate the wheat from the chaff, and many companies get burned trying to find the right partner themselves.

Before you have a bad experience that could put you off the whole concept, get help. TDS Global Solutions, for example, has decades of knowledge of BPO providers and how they can serve companies just like yours. Whether you’re looking for an onshore or offshore call center, have questions about the top countries for offshoring, or simply don’t know where to start, we can help.

4. Take the Time to Check References

Whether you go it alone or get assistance from a pro, you absolutely must check references. It’s tempting to dive in when you’re antsy about getting started, but don’t.

Instead, do your due diligence. Ask for references from the provider’s existing clients. Find out how long they’ve been in business. Then have a long conversation with their team to make sure it’s a good fit. If not, move on. The right company does exist, so don’t stop until you find it.

5. Start Outsourcing With a Trial Project

Another mistake newbies make when looking for outsourcing companies is jumping right into a full-time relationship.

Don’t. Start with a small trial project so you can see how the outsourcing team uses the latest technology to save you money and increase efficiency. Make sure their work ethic and capabilities align with what you’re looking for. Allow them to learn your needs and preferences before saddling them with a ginormous amount of work, which will set everyone up for success.

Financial Services Outsourcing is Growing... Just Look at the Data

It’s important to note that the new habit many businesses have developed of outsourcing financial services to an outsourcing provider is well-founded. We’re not just talking anecdotal evidence here; research indicates that companies who designate an offshore accounting team for financial reporting, accounts receivable and payable, and analyzing metrics simply perform better.

Part of this is because subscription software isn’t actually saving people money. According to, “fewer than 5% of respondents to a recent HFS survey said that SaaS is decreasing their outsourcing costs, while more than 80% expect to increase their third-party spending on SaaS implementations.”

As Saurabh Gupta, president of research and advisory services at HFS Research, told CIO, “The cultural resistance to WFH is now gone. Our research suggests that the ‘goldilocks’ WFH ratio in the medium term is likely to be around 40%.” That means it’s easier than ever to get C-suite leaders, board members, and other shareholders on board with outsourcing companies.

However, it’s important to note that you need to find the right outsourcing partner if you want to succeed. Any company with poor security protocols, improperly trained workers, ethics violations, or loosey-goosey adherence to legal codes in your country has to go. Your good name is on the line, after all.

That’s where it helps to have someone on your side. Here at TDS Global Solutions, we work with top companies around the world, carefully creating partnerships based on the parent company's needs and the outsourcing partner’s capabilities and expertise. If you’re ready to reduce your hiring and operational costs, offload process-heavy work, streamline your accounting department, and access the highest-quality talent around the world, it’s time to discard the old ways and move to an outsourcing model.

TDS Global Solutions is the best in the industry, and we’d love to bring that service to you today. All you have to do is get in touch to learn more and start your journey today!

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