New Finance and Accounting Outsourcing Statistics [2023]

In this article, we look at finance and accounting outsourcing statistics this 2023.

Businesses, whether small to medium, or large-scale, are involved in daily financial and accounting decisions. Accounting and finance play an important role in every business. The global accounting services market is expected to grow from $544.06 billion in 2020 to $573.29 billion in 2021 at a compound annual growth rate (CAGR) of 5.4%. Despite the growth, there are challenges encountered. Here, we look at challenges encountered in the U.S accounting services industry.

Challenges in the Finance and Accounting Industry: Statistics

As of April 7, 2023, the current unemployment rates for the ff. Finance and Accounting positions in the U.S. are the ff.: there is a 0.9% unemployment rate for Financial and investment analysts, 1.7% for Accountants and auditors, 1.7%, Financial managers, 1.8% for Billing clerks, and 2.1% for Bookkeeping, accounting and auditing clerks. The percentages were near or below the national unemployment rate at the end of the first-quarter 2023.

More than 300,000 U.S. accountants and auditors have left their jobs in the past two years,..

Looking at the job openings for accountants, only about 136,400 openings for accountants and auditors are projected each year, on average, over the decade.

As financial regulations become more complex and strict, and the challenge of accounting and finance talent shortage becoming significant, making logical and timely financial decisions can be quite a challenge.

Fortunately, there is a practical solution: finance and accounting outsourcing.

Finance and Accounting Outsourcing

Financial and accounting outsourcing is the practice of engaging an external service provider to perform specific finance and accounting-related functions. instead of having an internal finance and accounting team to handle tasks such as accounting, accounts payable, accounts receivable, bookkeeping, financial analysis, payroll processing, tax preparation and planning, these tasks are outsourced to an external provider who has the expertise and resources to handle them.

The practice of outsourcing finance and accounting services has become a popular model for businesses of all sizes, since this helps businesses improve operations by providing support in a lot of finance and accounting functions.

Finance and Accounting Outsourcing Statistics [2023]

What is the most outsourced Accounting function?

The tax preparation services market is expected to be the fastest growing segment in the accounting services market, according to Research and Markets. 71% of small companies outsource their tax preparation—this is an accounting service outsourced the most.

How many businesses outsource Accounting and Finance?
The scope of Finance and Accounting Business Process Outsourcing covers U.S.; Canada; U.K.; Germany; France; China; India; Japan; Singapore; Malaysia; Philippines; Indonesia; Thailand; Brazil; Mexico.

It is estimated that 37% of small businesses outsource their Accounting function. Accounting requires specialized skills and experience, making it the top outsourced function, next to IT.

In fact, 71% of financial service executives outsource or offshore some of their services.

The global finance and accounting business process outsourcing market revenue

The global finance and accounting business process outsourcing market was valued at USD 56.42 billion in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 9.1% from 2023 to 2030.

Key players operating in the F&A business process outsourcing market include Accenture; Infosys Limited (Infosys BPM), HCL Technologies Limited.; Wipro Limited; Capgemini; Sutherland.; IBM Corporation; Tata Consultancy Services Limited; Genpact, LLC; Fiserv, Inc.

According to Business Research Insights, finance and accounting outsourcing (FAO) is gaining popularity among European businesses, especially small and medium-sized organizations (SMEs), as a low-cost means of enhancing their operations. Market trends include automation, real-time services, and a need for partners that can provide added value.

Industry predictions

According to a Gartner prediction, Finance and accounting (F&A) organizations will not renew 60% of their existing business process outsourcing (BPO) contracts by 2025 owing to the outdated pricing models that do not drive business’ goals of digitization and process improvement and automation.

Another significant shift that Gartner predicts in the market is that by 2023, 40% of finance organizations will consolidate to a single outsourcing service provider for all F&A operations, up from 24% in 2019.

Conclusion

In summary, the finance and accounting services industry faces challenges related to regulatory changes, talent shortage, and digitization. To overcome these obstacles, businesses are increasingly turning to finance and accounting outsourcing. This trend is driven by the need for specialized expertise, improved operations, and the ability to make informed financial decisions. The outsourcing market is growing rapidly, and industry predictions indicate further changes in outsourcing strategies and provider consolidation.

Outsourcing Accounting functions offshore to countries like the Philippines can help contribute to the overall efficient operation of the Finance and Accounting department. Here are some reasons you should offshore Accounting services to the Philippines:

• • In the Philippines, you can outsource Accounting at a much lower cost than hiring inhouse.
  • Philippine accounting practices are based on International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS).
  • Accounting is an established and recognized industry in the Philippines.
  • The Accounting education track in the Philippines is the same as the U.S.
  • The Philippines is regarded as a highly literate and proficient English-speaking country.
  • In the Philippines, Accounting courses are taught in the English language.
  • The Bachelor’s of Accountancy is required to become CPA eligible. It’s common to see a 4 year degree for Bachelors of Science in Accounting Tech and then a fifth year for the accountancy degree.
  • The Philippine Institute of Certified Professional Accountants (PICPA) helps further the development of professional, ethical and educational standards of Accountancy.

Connext Global Solutions is a business process outsourcing company in the Philippines provides cost-effective offshore accounting services and IT support.

Outsource your Accounting services with Connext Global Solutions today.

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References:

Accounting Services Global Market Opportunities And Strategies To 2031: COVID-19 Impact and Recovery. https://www.researchandmarkets.com/reports/5633460/accounting-services-global-market-opportunities?utm_source=BW&utm_medium=PressRelease&utm_code=6ds6fh&utm_campaign=1512263+-+Global+Accounting+Services+Market+Report+(2021+to+2030)+-+COVID-19+Impact+and+Recovery&utm_exec=jamu273prd. Research and Markets. Published July 2022. Accessed June 02, 2023.

The Employment Situation — April 2023, U.S. Bureau of Labor Statistics, May 5, 2023. Accessed June 02, 2023.

G. Dautovic. 15 Must-Know Outsourcing Statistics for 2023. https://fortunly.com/statistics/outsourcing-statistics/#gref. Fortunly. fortunly.com.. Updated December 16,2022. Accessed June 02, 2023.

Finance And Accounting Business Process Outsourcing Market Size, Share & Trends Analysis Report By Service, By Enterprise-size, By Vertical, By Region, And Segment Forecasts, 2023 – 2030. https://www.grandviewresearch.com/industry-analysis/finance-accounting-business-process-outsourcing-market-report. Grand View Research. grandviewresearch.com. Accessed June 02, 2023.

Finance and Accounting Outsourcing (FAO) Market Size, Share, Growth, And Industry Analysis, By Type (Business Support Outsourcing Service, Specific Functions Outsourcing Service, and Universal Terminal Outsourcing Service), By Application (SME (Small and Medium Enterprises) and Large Enterprises), REgional Forecasr From 2023 to 2028. https://www.businessresearchinsights.com/market-reports/finance-and-accounting-outsourcing-fao-market-102678. Business Research Insights. businessresearchinsights.com. Published January 2023. Accessed June 02, 2023.

Accountants and Auditors. https://www.bls.gov/ooh/business-and-financial/accountants-and-auditors.htm#tab-1. Bureau of Labor and Statistics. www.bls.gov. Accessed June 02, 2023.

37 Amazing Accounting Statistics Showing the Power of Numbers [2023]. https://goremotely.net/blog/accounting-statistics/. Go Remotely. Last updated March 07, 2023. Accessed June 02, 2023.

Gartner Predicts by 2025, 60% of Finance and Accounting Outsourcing Contracts Will Not Be Renewed. https://www.gartner.com/en/newsroom/press-releases/2021-05-25-gartner-predicts-by-2025-60-percent-of-finance-and-accounting-outsourcing-contracts-will-not-be-renewed. Gartner, Inc. gartner.com. Published May 24, 2021. Accessed June 02, 2023.