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The Pros and Cons of Offshore Outsourced Services

The Pros and Cons of Outsourced Accounting Services - Staff Domain

Outsourcing non-core business activities has long been used by businesses to improve their operations. Accounting is one of the most commonly outsourced tasks—a study by research firm Clutch reveals that 37% of small and medium businesses outsource a business process. But what are the benefits of offshore outsourcing—and what are its drawbacks?

The Benefits of Offshore Outsourcing

Expanded capacity

Outsourcing allows you to make better use of your resources, letting you focus on consultative work while your offshore team fulfills the leg work. We have an extensive discussion on expanded capacity—you can read it here.

Cost savings

The Clutch research revealed reduction of operating costs as one of the top reasons small businesses outsource (12%). Let’s look at an example from a specific industry: We did a study we ran with Bond University titled This is because your outsourcing fee usually covers everything, from the staff to the facilities to the technology infrastructure required.

Another study titled “Does Outsourcing of Accounting Services Increase Profitability of SMEs” reveals that not only do companies enjoy cost savings when they outsource—they actually increase their profit. 66% of respondents say they outsource to obtain profit, and 38.8% have reported a profit increase as a result.

Improved service levels

By outsourcing accounting services, you get a dedicated team of experts to complete specialized functions—and their focus is solely on that. Tasks can be fulfilled faster and more accurately, resulting in improved customer experiences.

According to the OAS study, accounting firms that offshore reported a satisfaction rate of 75% or more. According to these firms, these positive outcomes are a direct result of the firms providing good, clear direction—and the offshored staff adopting and following these directions carefully.

The Challenges of Offshore Outsourcing Services

No outsourcing partnership is perfect—but with constant communication, proper planning and an established process, you can reap the benefits. The following are some of the most common challenges you can encounter in a partnership:

Client data risk

The study “Offshore outsourcing in large companies: Motivations and risks perceived” (Offshore Outsourcing Motivations and Risks) reveals business motivations for offshore outsourcing, along with perceived risks. The study shows that one of the main perceived risks of offshore outsourcing is security breach, particularly in business data (2%).

Meanwhile, the OAS reports that only 19% of businesses consider client data risk as a major risk, while 62% said it was a minor risk.

A good outsource provider will have stringent policies and procedures in place to protect data. Before outsourcing, you must have strict, clear policies and procedures on what your outsourced staff can and can’t do with company client information.

Another way to protect client data is to put restrictions on the use of computers. In the case of Staff Domain for example, when the Philippine government announced a lockdown, all staff were given new office computers and no personal devices were to be used. In cases where this is not an option, a personal computer should only be used to connect to a computer in the office through a secure server or a secure remote desktop connection. This way, you as the employer maintain all the security controls and data in your own environment. Two-factor authentication should also be established every time remote access is commenced.

Lesser management control

There’s a perceived notion that when you outsource, you lose some control over the processes that take place. The “Offshore outsourcing in large companies” study revealed several concerns: greater management effort (28%), difficulty in controlling subcontracting by the supplier (26%), and loss of flexibility to address new needs (24%).

While these are very real concerns, these can also be easily addressed. Having a manager to manage both onshore and offshore workflows, training and development, and all the organizational processes can make outsourcing efficient.

Decrease in the quality of services

As you can see in the section “improved service levels,” this is a misconception—and one that can be easily addressed. Setting KPIs and service level agreements, developing processes and holding regular catch-up meetings with your offshore team helps ensure your outsourced staff are fulfilling their tasks efficiently. Work with an outsource provider that’s completely transparent with their processes and policies. Be just as transparent with your own processes and policies to ensure the success of your outsource partnership.

At the end of the day, each business has its own unique needs—and a customized outsource solution can help you maximize its benefits and address the challenges of working with outsourced accounting staff. We’d be happy to walk you through it—set up a meeting with us today and we’ll answer your questions about offshore outsourcing.


An Australian Business Process Offshoring (BPO) organization focused on supporting small to medium businesses, Staff Domain, Inc. is committed to helping its partners overseas achieve cost savings and rapid growth through end-to-end offshore recruitment and operational management.

Based in Pasig City, Metro Manila, Philippines, and with offices in the United States, Australia and Hong Kong, Staff Domain boasts the best talent who take pride in the work and the professional choices they make. The company’s state-of-the-art facility exceeds the expectations of working professionals and ensures productivity—a space where smart professionals and businesses can grow together.

Considering offshoring for your business? Visit Staff Domain to get learn more and get started.

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