4 Things Australian SMEs Need to Know Before Offshoring Accounting to the Philippines
by Ben Rajah, Co-Founder and CFO, Staff Domain
Australian SMEs are turning to offshore accounting in the Philippines because local hiring for accounting and bookkeeping roles has gotten slower and more expensive at the same time compliance work keeps growing. Before you sign anything, look at four things: who can see your financial data and what happens if that access is misused, whether your processes are documented well enough for someone new to follow, what work has to stay with a registered Australian tax or BAS agent, and who owns the relationship day to day. Get those four right, and the country matters less than most owners assume.
Why AU SMEs are looking at offshore accounting right now
I have built cost models for hundreds of Australian businesses weighing a local hire against an offshore one, and the maths used to be the whole story. It is not anymore. The supply side has changed, and that shift is pushing more owners toward finance and accounting outsourcing companies for the first time, not because offshoring got cheaper, but because the local option got harder to find.
External auditors have sat on Australia’s occupation shortage list for five years running, and tax accountants for three, while accounting degree enrolments have fallen by close to half since 2018 (Chartered Accountants ANZ, 2025). The pipeline that used to fill junior and mid-level roles has thinned out at the same time demand has grown. In the December 2025 quarter, 64 per cent of employers hiring for professional-level roles still had vacancies unfilled after a month, up 11 percentage points on the year before (Jobs and Skills Australia, 2026).
Meanwhile the workload has not eased. STP Phase 2 reporting, more frequent BAS obligations, and tighter ATO scrutiny all add hours to a function that struggled to hire the hours it needed. For a lot of SME owners, the choice is not local hire versus offshore hire. It is offshore hire versus the work not getting done, which is why offshoring accounting has stopped being a fringe move for AU SMEs and started being a practical one.
A four-question readiness check
Before you make any move towards outsourcing, identify your business’s readiness for offshore accounting services by going through the following factors:
- Access
Do you know exactly who will see your financial data, and is that access logged and role-based? - Process
Could someone new follow your current process from written instructions alone? - Compliance line
Do you know which parts of the work must stay with a registered Australian agent, and has that agent signed off on the arrangement? - Ownership
Is there one named person on your side who owns this relationship, week to week?
Four questions that are easy to read, but harder to answer honestly. It’s worth taking them one at a time, starting with the one most owners think about last: who actually has access to your numbers.
Who can see your numbers, and what happens if it goes wrong?
When it comes to finance functions, the first thing in mind should be security and access.
Financial data touches customer information, wage details, tax file numbers, and sometimes banking credentials. Handing that to anyone, local or offshore, without a clear access model is a real risk. Australia’s finance sector reported the second-highest number of data breach notifications of any industry in the first half of 2025, behind only health services (OAIC).
None of that argues against offshoring. It argues for treating access control as the first decision, not an afterthought after the contract is signed. Ask who can see what, whether access is role-based, whether it is logged, and what happens in the first hour after something goes wrong. When considering a provider for offshore accounting, those who cannot answer that in specifics have given you the answer.
Could a stranger follow your process without you in the room?
An unusual question to pose, but a necessary one. It’s also where a lot of offshoring accounting engagements quietly fail, three months in rather than on day one.
This is the factor most SMEs underrate, and the one that decides most outcomes. Even the most skilled offshore accountant is not a mind reader. They work from whatever you have written down, and for most SMEs, it is a thin record: a few notes in a shared drive, a habit that lives in one person’s head, a chart of accounts nobody has cleaned up since the business was half its current size.
The fix is not complicated, but it is work. Before you offshore anything, write down how the task is done today, warts and all. If you cannot describe your month-end close in a single page, an offshore hire will not produce one by instinct. What they will do is expose the gap faster than a local hire would, because they cannot lean on years of tribal knowledge the way a long-tenured employee can.
What has to stay with a registered agent in Australia?
Now for the legal line. This is the part of the accounting outsourcing Philippines conversation most owners skip, right up until it matters.
Under the Tax Agent Services Act 2009, a registered tax or BAS agent stays responsible under law for the competence of any tax agent service offshored to an unregistered third party, and must keep active supervision and control arrangements in place (Tax Practitioners Board). The agent must also get client consent before disclosing a client’s information to that third party.
In plain terms: if your accountant offshores BAS preparation or tax work to someone who is not a registered agent, your accountant is still on the hook for its quality, and you are entitled to know that arrangement exists. This does not put offshoring these functions off-limits. It means sign-off and professional accountability sit with a person registered in Australia, while the offshore hire does the preparation work under that person’s supervision. Good providers build this in from day one. Providers who treat it as a footnote are worth walking away from.
Who owns this once it's running?
You know who sees your numbers. You’ve documented your process well enough that someone new could pick it up. You’ve mapped what has to stay with a registered agent. Now: who is actually running this offshore accounting arrangement on your side?
“Ownership” comes down to this:
Name the manager, and define what they own in week one
Write an actual name next to this hire’s manager, confirm that person knows it’s theirs, and brief a specific scope, not “helping with accounts,” but which accounts, which reports, which deadlines. Do it the way you’d brief a new local employee on their first day. “The team will look after them” and a vague scope are the same mistake wearing different clothes, and both produce a hire who’s answering to nobody in particular by month two. The better outsourced accounting firms build this into onboarding as standard, not something you have to ask for.
Stay involved in who gets hired, not just how they’re managed
Owners who sit in on shortlisting and interviews tend to end up with someone who actually fits the role, because they’ve seen real work, not a CV summary. This matters more the first time you’re offshoring accounting, since you don’t yet have a feel for what a good fit even looks like. Handing that step entirely to a provider and waiting for someone to show up is usually where fit problems start, long before day one.
Set a real check-in cadence, in the calendar, before day one
Fortnightly is common. Weekly for the first month is better. Any genuine offshore accounting provider should be able to tell you what a normal cadence looks like before you sign, not after. “We’ll check in as needed” is not a cadence. It’s a hope.
When offshore accounting is the wrong call
Some accountants and CPA-body voices argue finance work is too high-trust and too bound by regulation to send offshore at all. That is not a position to wave off; it holds often enough to take seriously.
It holds when a business has no documented processes and no time to build them before handing work over, which is exactly the kind of business that finance and accounting outsourcing companies should be turning away rather than signing. It holds when nobody on the local team can commit to owning the relationship, because an unowned offshore accounting service fails quietly until it fails loudly. And it holds at the top of the finance hierarchy: strategic tax planning, complex judgement calls, and anything requiring a registered agent’s sign-off should stay with a person who holds that registration, offshore staff or not.
This is also where the difference between accounting outsourcing done well and done badly shows up first. A provider who takes the engagement anyway, gaps and all, is telling you something about how the rest of the relationship will go.
The pattern behind the businesses that get this right
After building cost models and helping structure hundreds of these arrangements, one thing holds true across all four factors above: the businesses that get a good outcome are specific, on every one of them. The ones that struggle are vague, usually on more than one.
Specific about who has access, not “a few of the team.” Specific about what stays with a registered agent, not “assume the accountant sorts it out.” Specific about the process, written down, not carried in one person’s head. Specific about who owns the relationship, not “we’ll see how it goes.”
It is the same discipline that separates a well-run local hire from a badly run one. Offshore accounting does not change the rule. It just makes the businesses that skip it easier to spot, because there is no hallway conversation to paper over the gap when something starts drifting.
Interested in offshore accounting services or other functions within the finance scope? Visit our Accounting & Finance page today.
FAQ
Is offshore accounting the same as an accounting BPO?
No. An accounting BPO in the Philippines hands a process to a shared team working across many clients at once. Offshore accounting, done as an embedded model, places a dedicated accountant or bookkeeper inside your business, working your systems, under your oversight, the way a local hire would.
What accounting and bookkeeping tasks can be offshored to the Philippines?
Transaction-heavy, process-driven work travels well: accounts payable and receivable, bank reconciliations, payroll processing, and BAS preparation under a registered agent’s supervision. Judgement-heavy advisory work and anything needing a local agent’s sign-off should stay onshore.
Is it legal to offshore BAS or tax agent work from Australia?
Yes, provided the arrangement follows the Tax Practitioners Board’s Code of Professional Conduct: a registered agent maintains supervision and control, and clients consent to the disclosure of their information to the offshore hire. This is general information, not legal advice.
How much oversight does an SME need to give an offshore accounting hire?
Less than most owners fear, once processes are documented and access is defined. What is non-negotiable is one named person on your side reviewing output on a set schedule. Oversight is not hours spent watching. It is someone owning the outcome.
Does offshoring accounting work take Australian jobs?
The accounting sector is short on people, not short on work: external auditors and tax accountants have both sat on the national shortage list for years, with enrolments down by close to half since 2018 (Chartered Accountants ANZ, 2025). Most SMEs offshoring accounting are filling roles they could not fill locally, not displacing a local hire. A business that grows because it can staff its finance function tends to add local roles too, the client-facing and senior ones growth creates.
This article is general information, not legal or tax advice. Get advice specific to your situation before acting.
