Why do companies outsource? Companies choose to outsource for a number of reasons, but for most of those who go with an outsourcing provider, the journey starts with a need to cut costs, increase production, or scale faster — sometimes all at the same time.
Outsourcing allows companies to focus on their current priorities and leave the back-office work to the professionals without wasting time on admin responsibilities (like accounts payable, accounts receivable, and general accounting, etc.). But most of all, outsourcing paves the way to reaching goals, getting new clients, and growing your business.
Key Takeaways
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Substantial cost reduction remains a primary driver for outsourcing, allowing mid-market firms to lower transactional accounting expenses by 50% to 70% compared to domestic hiring.
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Regaining strategic focus is top of mind for finance executives, with 88% of CFOs reporting that they want to escape transactional fires like month-end close to focus on corporate growth.
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Navigating the domestic CPA shortage is simplified by tapping into global talent hubs like Manila, which offers thousands of highly qualified, GAAP-compliant accounting professionals.
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Strengthening fraud prevention is an overlooked advantage of outsourcing, providing independent third-party separation of duties to secure vulnerable mid-sized accounting workflows.
Table of Contents
While cost containment and time management are historically the primary drivers, modern finance leaders are expanding their focus. From mitigating internal vulnerabilities to capturing rare technical skill sets, here are the top five reasons companies partner with an outsourced provider today.
1. Save Money on Back-Office Tasks
This one might seem obvious, but saving money is one of the top reasons that outsourcing clients choose to go with a provider, especially one offshore in India or the Philippines. Lowering budgets has never been more relevant today, and right now, outsourcing is a way to save money without losing people or lowering production.
Also key in the cost-saving discussion is what clients do with the savings. Many clients choose to reinvest that money back into their business. Whether it’s to build a new program, hire a key player, or invest in new technology, outsourcing gives clients the opportunity to use the 50-70% savings into something that will actually grow the business, instead of putting it into non-growth areas like accounting, back-office or admin tasks.
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But how do these cost savings you keep hearing about actually work? Let's take, for example, accounts payable outsourcing. In our home base of Austin, Texas, an Accounts Payable Specialist would cost you about $66,844 each year, when you take into account salary, estimated benefits cost, and the separated hire's salary. When choosing an outsourcing provider that allows for a team of just one AP Specialist offshore (see how Personiv has revolutionized this approach here), you end up paying just $2,250/month or $27,000 per year. With a cost savings of nearly $40K (and a cost reduction of almost 60 percent), it is easy to see why companies choose to outsource something like accounts payable.
2. Why Companies Outsource to Gain Time to Focus on What Matters Most
With so many priorities, company leaders often feel pulled in a million different directions. This can lead to not only lost time but also low efficiency and muddled focus. By choosing an outsourcing partner dedicated to non-core tasks, companies are able to spend time on strategy, execution, and growth, rather than putting out fires. Nothing could be truer in the finance departments of mid-size organizations right now, where being in growth-mode means needing more hours in a day.
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For CFOs and Controllers, this often takes the form of the monthly fire drill to close the books: the dreaded month-end close. We hear from financial leaders all the time that they find themselves working as a player-coach, sometimes closing the books one minute while making strategic decisions the next. This is such a problem, in fact, that in our Finance & Accounting Talent Outlook Survey, we found that 88 percent of CFOs wish they had more time for strategic work.
Another time-consuming task that pops up for finance & accounting teams is how long it takes to invoice clients. While companies need to get paid and desire to lower invoicing time, their smaller staff may take days to do so, causing delays in payment and a large lag in data used to make important decisions. Many companies use outsourcing so they can invoice and get paid faster (something that our teams have proven can be lowered by 60 percent with an offshore team as small as one). Whatever business leaders are spending their time on, one thing is certain: they need more of it, and outsourcing can help.
3. Access to Agile Scaling Opportunities and Global Talent
For small- to mid-size companies, building your business and growing your client base are likely two of your top priorities. The thing about admin tasks is that they take a lot of time and money, but don't directly contribute to these goals. Fast growth is typically a driver and one of the "why's" of outsourcing clients and also one of the main benefits to starting an outsourcing relationship. Many desire scale, but don’t want to wait, and this is where outsourcing comes in.
An outsourcing provider can put a dedicated team as small as one on necessary tasks so that companies don’t have to worry about hiring, training, and retaining top talent. Scaling fast requires talent, and one of the things that can cause issues, especially in the accounting world, is the current lack of talent. In our survey, for example, we found that 89% of CFOs agree with the AICPA that the majority of CPAs will retire within the next 15 years. In our same talent survey, we also found that only 19 percent of CFOs could find the talent they need to fill the gaps left by a slowing market.
The traditional way of hiring takes time and effort, only for turnover to start the process once again. Luckily, in countries like the Philippines, accounting talent is on the rise, with accounting being a top degree of university graduates. In fact, there are 8,325 CPAs in their capital city of Manila alone, with thousands joining their PICPA each year.
You can take a look at a few of our very own CPAs in Manila, all of whom follow U.S. GAAP accounting standards, by clicking the link below.
Find Out More About Outsourcing in the Philippines: Get the Special Report
4. Companies Outsource to Leverage Specialized Expertise
You might have no problem finding a run-of-the-mill bookkeeper, but what about specialized accounting and tax tasks? Finding a qualified and affordable CPA or specialist to join your team can be almost impossible. This leads countless companies toward outsourcing finance and accounting roles.
Examples of services commonly provided include:
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Preparing international financial statements
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Filing income tax returns
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Maintaining compliance with regulatory agencies, like the IRS
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Communicating with auditors
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Advising on tax planning opportunities
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Preparing financial forecasts
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Creating action plans for growth goals
These services aren’t common with general bookkeepers. Outsourcing provides companies with access to these services at affordable costs.
5. Fraud Prevention
Business size doesn’t dictate fraud risk. A company with just five employees has the same fraud risks as a large enterprise with thousands of employees. In fact, three out of four small businesses were impacted by fraud, ransomware, or scams in 2025. While outsourcing accounting can’t completely eliminate your fraud risks, it can significantly reduce them.
Outsourced professionals are independent third parties, meaning they have no financial or personal ties to your company. Instead, they offer the ability to separate duties, implement advanced monitoring protocols, and closely monitor your financials for suspicious events.
For example, you might have your outsourced accountant process payroll for your in-house team. Moving this process to an independent party cuts down on the risk of hours being misstated and fictitious employees being paid. Just one fraudulent vendor or employee payment can cost your company thousands, which is why companies use outsourced providers.
Looking Forward: Why Do Companies Outsource Today?
Ultimately, the answer to why companies outsource goes far beyond simply clearing out a back-office to-do list. Whether your goal is to insulate your organization from fraud risks, access top-tier global compliance talent, or slash your operational overhead by up to 70 percent, securing a true strategic partnership turns transactional headaches into a primary engine for corporate expansion.
No matter the reasons for outsourcing, whether to cut costs, grow the business, hire better talent or get your time back, the benefits of outsourcing are perfect for middle-market companies looking to expand.
Interested in how outsourcing can work for your team? Download the Definitive F&A Decision Matrix Worksheet to find out what to outsource and what to keep in-house.
Ready to talk with an expert? Contact us today.
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