Businesses are facing constant pressure to stay competitive, efficient, and compliant—especially in complex markets. For both local enterprises and foreign-owned companies, managing finances effectively can be a daunting challenge, one that demands both expertise and agility. This is where outsourced accounting services come into play.
By outsourcing accounting functions, businesses can tap into specialized expertise, leverage the latest technologies, and streamline operations—all while keeping costs under control. However, like any strategic decision, outsourcing comes with its own set of pros and cons that must be carefully considered.
Here is some guidance on outsourcing your accounting and financial reporting, and a list of the best international accounting outsourcing providers to consider.
Contents:
- What is an outsourced accounting firm?
- What is the difference between offshoring and outsourcing accounting?
- Is outsourcing accounting on the rise?
- Best Outsourced Accounting Firms for International Expansion
- Is outsourcing accounting a good idea?
- What are the risks when outsourcing accounting?
- Simplifying Global Expansion and Accounting
What is an outsourced accounting firm?
Outsourced accounting involves entrusting your company’s financial management and administration to external experts. This can cover a wide range of services, from routine bookkeeping to high-level strategic planning. Key activities typically outsourced include:
- Bookkeeping and Financial Reporting: Maintaining accurate records, reconciling accounts, and preparing essential financial statements such as balance sheets, income statements, and cash flow statements.
- Tax Compliance and Planning: Managing tax filings and returns, while providing strategic advice to optimize tax efficiency and ensure compliance with regulations.
- Payroll Management: Ensuring accurate and timely payroll processing, including managing tax withholdings, social security contributions, and adhering to labor regulations.
- Expense Management: Streamlining expense processes, enforcing reimbursement policies, and delivering detailed expense reports to keep costs under control.
- Financial Systems Implementation: Assisting with the selection, implementation, and integration of accounting software to improve efficiency and accuracy.
- Bilingual Financial Reporting: For multinational companies, producing financial reports in multiple languages, such as English for the parent company and local languages like Japanese for regional operations.
- Consolidation and Reporting Standardization: Helping create local processes that align with a unique Chart of Accounts, Standard Operating Procedures (SOP), and policies from the headquarters. This ensures that accounting across various country offices follows a unified format, making it easier and faster for the headquarters to consolidate results at regional or global levels without extensive data reformatting.
By outsourcing these functions, businesses can significantly improve operational efficiency. External accounting teams bring specialized expertise, advanced tools, and industry best practices, enabling internal staff to concentrate on core business activities. This approach not only streamlines financial processes but also minimizes the risk of errors and oversights that can occur with in-house financial management.
What is the difference between offshoring and outsourcing accounting?
The key difference between offshoring and outsourcing accounting lies in the location and ownership of the services provided: offshoring involves relocating accounting functions to a different country within the same company, while outsourcing involves contracting an external firm to handle accounting tasks, either domestically or internationally.
Offshoring involves moving accounting or other business processes to a different country, typically to capitalize on lower labor costs, favorable tax regimes, or specialized expertise. The key distinction is that offshoring keeps these functions within the same company, just in a new geographic location. For example, a U.S.-based firm might establish a finance and accounting team in another country to manage its operations more cost-effectively.
Outsourcing, on the other hand, refers to contracting an external firm to handle specific accounting tasks. This can be done domestically or internationally. Unlike offshoring, outsourcing involves a third-party provider taking full responsibility for the accounting functions, allowing the company to focus on its core business activities. While outsourcing can involve moving tasks overseas, it’s not a requirement—outsourcing is about leveraging external expertise, whether nearby or across the globe.
Is outsourcing accounting on the rise? When it comes to entering new markets – yes.
Outsourced accounting services have seen a significant rise globally, with Asia, particularly Japan, experiencing rapid growth. A quick look at Google Trends shows the number of searches for terms like “outsource accounting” on Google increase by 38% between 2020 and 2023, with the volume only growing as 2024 progresses.
This trend is driven by several key factors, particularly among small and medium-sized enterprises (SMEs) and foreign-owned companies entering new markets. Let’s take a closer look at Japan as an example:
Regulatory Complexity and Compliance
Japan’s complex legal framework, including the Companies Act and Financial Instruments and Exchange Act (FIEA), presents significant compliance challenges. For example, navigating the differences between Japanese GAAP (JGAAP) and International Financial Reporting Standards (IFRS) can be daunting. Outsourcing firms bring the necessary expertise to ensure compliance, helping companies avoid penalties.
Strategic Focus and Resource Optimization
Outsourcing allows SMEs to focus on their core business activities by offloading non-core functions like accounting. This reallocation of resources is crucial for companies that need agility in diverse market conditions. Research shows that businesses that outsource accounting functions report a 32% increase in operational efficiency.
Cost Efficiency and Economies of Scale
Outsourcing accounting services offers significant cost savings, especially in high-cost labor markets like Japan. By leveraging economies of scale, companies can access high-quality services at a fraction of the cost of maintaining an in-house team. A 2022 report from Deloitte found that 57% of companies choose outsourcing as a means to cut operational costs.
Talent Acquisition and Management
Talent acquisition makes outsourcing an attractive option. For example, finding skilled accounting professionals in Japan is increasingly challenging due to demographic trends and a tight labor market. A 2023 report found that 57% of Japanese companies were concerned about shortages of employees with professional skills, an increase from 48% the previous year.
The difficulty is compounded when you need professionals who can offer a holistic approach, combining expertise in multiple areas such as accounting and payroll, or accounting and tax. Additionally, finding bilingual talent who are proficient in both Japanese and English is nearly impossible or extremely expensive.
Outsourcing addresses this issue by providing access to a global talent pool, ensuring reliable and continuous financial operations.
Best Outsourced Accounting Firms for International Expansion
1. weConnect
Specialization: Global Accounting, Tax Compliance, and Payroll
When it comes to navigating the complexities of international expansion, weConnect is the partner you can trust. We specialize in global accounting and tax compliance, ensuring your financials are accurate and compliant, no matter where your business operates. Our deep understanding of cross-border regulations and the challenges of global operations ensures that your company stays ready for growth.
At weConnect, we don’t just provide outsourced accounting services—we help you implement your headquarters’ policies, Standard Operating Procedures (SOPs), and Chart of Accounts across your country offices. We make local adjustments when necessary (e.g., converting US GAAP to JGAAP), which enables your management team to better monitor, manage, and consolidate their accounting and reports. This approach standardizes processes across countries, so you don’t have to manage different accounting firms in each country with varying formats and procedures.
Another critical advantage of partnering with weConnect is our system-agnostic approach. Unlike many outsourced accounting firms that lock you into their preferred accounting software, we work within your existing system. This means you can access your financial data in real-time, anytime—no more waiting until the end of the month to see where your finances stand. With our expertise, we can make it work in your system across more than 90 countries, delivering a standardized and seamless experience from your HQ down to each local office.
Whether you’re expanding into new markets or managing multiple international entities, weConnect’s tailored approach ensures that your operations are efficient, compliant, and perfectly aligned with your global strategy.
2. Deloitte Global Accounting Services
Specialization: International Accounting, Tax Compliance, Advisory
As one of the Big Four accounting firms, Deloitte provides comprehensive accounting services tailored for global businesses. Their international network allows them to offer seamless accounting support, tax advisory, and compliance services across multiple jurisdictions, making them a reliable partner for multinational companies.
3. BDO Global
Specialization: Cross-Border Accounting, Tax Planning, and Advisory
BDO is a global accounting firm with a strong focus on serving mid-market companies expanding internationally. They offer a full suite of accounting services, including financial reporting, tax planning, and compliance, backed by their presence in over 160 countries.
4. RSM International
Specialization: International Financial Reporting, Compliance, and Advisory
RSM is a leading provider of audit, tax, and consulting services with a strong focus on global middle-market businesses. They offer in-depth expertise in international financial reporting and compliance, ensuring that companies expanding abroad can meet the financial and regulatory challenges of new markets.
5. Grant Thornton International Ltd.
Specialization: Global Accounting, Audit, Tax Services
Grant Thornton is a global network of independent accounting and consulting firms. They specialize in providing tailored accounting services for businesses expanding internationally, with expertise in cross-border financial reporting, tax compliance, and advisory.
6. Mazars Group
Specialization: International Accounting and Tax Services
Mazars is an international accounting firm with a strong presence in Europe, Africa, Asia, and the Americas. They offer a wide range of accounting services, including audit, tax, and advisory, with a focus on helping businesses manage their global financial operations and ensure compliance across different jurisdictions.
7. Vistra
Specialization: Cross-Border Accounting, Tax, and Advisory Services
Vistra is known for its expertise in helping companies manage their international accounting and compliance needs. They offer a range of services, including financial reporting, tax compliance, and entity management, making them a trusted partner for businesses expanding into new markets.
8. Haines Watts
Specialization: International Accounting for SMEs
Haines Watts is a UK-based accounting firm with a global network of partners. They specialize in providing accounting services to SMEs looking to expand internationally, offering expertise in financial reporting, tax compliance, and business advisory.
9. Crowe Global
Specialization: International Accounting, Tax, and Audit Services
Crowe Global is a leading accounting network with a strong focus on serving businesses with international operations. They provide comprehensive accounting, tax, and audit services, with a deep understanding of the regulatory environments in various countries.
10. EisnerAmper Global
Specialization: International Accounting, Tax, and Advisory Services
EisnerAmper offers specialized accounting services for companies with global operations, focusing on financial reporting, tax planning, and compliance. Their global network allows them to provide consistent support across multiple jurisdictions, making them a valuable partner for businesses expanding internationally.
Is outsourcing accounting a good idea?
There are lots of ways outsourcing can benefit your finance team and your bottom line, especially when it comes to international ventures.
Cost Efficiency
Outsourcing accounting services offers significant cost-saving benefits, especially for small and medium-sized businesses:
- Lower Overhead Costs: Outsourcing eliminates the need for full-time in-house staff, cutting down on salaries, benefits, office space, and equipment. For example, while hiring bilingual accounting staff in Japan might cost 30-35 million JPY annually, outsourcing can provide similar services for a third of the cost.
- Scalability and Flexibility: Outsourced services can easily scale with your business needs, allowing you to adjust the level of service without the fixed costs of an in-house team.
- Access to Advanced Technology: Outsourced firms use the latest accounting software and tools, enhancing accuracy and efficiency without the expense of purchasing and maintaining these systems internally.
- Expertise and Efficiency: Gain access to specialized accounting experts who ensure high-quality financial management. Outsourced firms streamline processes, leveraging their expertise to further reduce costs.
- Eliminate Recruitment and Training Costs: Avoid the substantial expenses of recruiting and training staff. Outsourcing ensures you have well-trained professionals from the start, with no extra effort on your part.
- Business Continuity and Reduced Turnover Risk: In-house accounting roles often experience high turnover, as they are typically stepping stones in corporate finance careers. This turnover can lead to disruptions, missed deadlines, and the challenges of managing leaves, retirements, or personal issues. Outsourcing shifts the focus from managing people to managing a service, providing greater stability, and ensuring business continuity without the time-consuming and emotional aspects of staff turnover.
- Risk Mitigation: Outsourced accounting providers implement strong controls and security measures, reducing the risk of fraud and errors, and saving on the costs associated with internal controls.
Scalable, Expertise, Efficiency & Hyper Business- Focus
In a competitive business environment, especially for foreign-owned enterprises, outsourcing accounting functions is becoming a strategic move. Here’s why:
- Scalable Resources: Easily adjust accounting support based on your business needs, whether you’re managing growth or handling seasonal peaks.
- Project Flexibility: Add or reduce services for specific projects, like audits or financial reporting, without long-term commitments.
- Cost Efficiency: Keep operations lean by paying only for the services you need, when you need them.
- Specialized Expertise: Access top-tier knowledge in tax, regulatory compliance, financial analysis, and strategic planning.
- Regulatory Expertise: Navigate complex frameworks with ease, thanks to expert guidance.
- Staying Ahead: Benefit from teams that are continuously updated on the latest industry trends and regulations, offering advanced insights.
- Core Focus: Free up internal resources to focus on strategic planning, customer engagement, and product development.
- Drive Innovation: Allow management to concentrate on growth initiatives, boosting operational efficiency.
- Market Agility: Respond swiftly to market opportunities and challenges by focusing on what you do best.
Risk Management
Outsourcing significantly reduces the risks of financial mismanagement and fraud. Third-party providers implement advanced data security measures, like robust encryption and strict access controls, to protect sensitive financial information. By using a team of experts, businesses ensure that internal controls are properly maintained, minimizing the risk of unauthorized access and fraud. Regular audits and continuous monitoring help detect and address any potential anomalies quickly.
Another major benefit is the separation of duties, a critical internal control measure that prevents any single individual from having complete control over financial processes. This reduces the likelihood of fraud, and when combined with real-time fraud detection systems, it strengthens the company’s defense against financial threats.
Compliance: Adherence to Complex Overseas Tax Regulations
Navigating intricate tax laws abroad can be challenging, especially for foreign entities. Outsourced accounting firms bring invaluable expertise in ensuring accurate and timely tax filings, helping businesses avoid penalties for non-compliance.
These firms are skilled in handling a range of tax-related issues, from corporate tax obligations to transfer pricing and consumption tax complexities. They stay updated on legislative changes, ensuring clients remain compliant with current laws.
Outsourced firms also offer specialized support for challenges like e-commerce taxation, estate and gift taxes, and the unique aspects of digital transactions. By leveraging their expertise, businesses can confidently manage tax liabilities and ensure full compliance with local regulations.
What are the risks when outsourcing accounting?
There are always risks when handing over any area of your operations to a third party. Most of the risks below are mitigated by selecting the right partnerships with vetted, trustworthy firms.
Communication Hurdles
Language barriers and cultural differences can create roadblocks, leading to misunderstandings or delays. To overcome this, consider hiring bilingual liaisons, offering cultural training, and setting up clear communication protocols to keep everyone on the same page.
Data Security Risks
Handing over sensitive financial data to a third party introduces risks. Ensure your chosen provider has top-notch cybersecurity measures, regularly audit their practices, and include strict data protection clauses in your contracts to safeguard your information.
Loss of Control
Outsourcing can sometimes make you feel like you’re losing touch with your financial operations, especially if response times lag or visibility decreases. Combat this by establishing clear reporting routines, leveraging real-time data tools, and keeping communication lines wide open.
Choosing the Right Partner
Finding the right outsourcing partner is critical. Make sure to vet potential providers thoroughly—look at their experience, client reviews, and regulatory compliance. Clear contracts with well-defined expectations and regular performance checks are crucial to ensuring a successful partnership.
Global Expansion and Accounting Simplified
As your business grows and enters new markets, managing the intricacies of international accounting and compliance can quickly become overwhelming. That’s where the right partner makes all the difference. With weConnect, you gain not just a service provider, but a dedicated team of experts committed to your success across borders. Ready to streamline your global operations and focus on what you do best? Fill out the form below to get in touch with weConnect today, and let’s start simplifying your journey to international growth.