Accounting technology / Glossary / Outsourced accounting

What is outsourced accounting?

Definition

Outsourced accounting is a company or accounting firm using an outside provider to do accounting work: bookkeeping, payables and receivables, payroll, month-end close, management reporting or tax preparation. The provider may be a local firm, an offshore team, or a service that combines software with accountants. The company keeps responsibility for its accounts.

Also calledoutsourced bookkeepingfinance outsourcingaccounting outsourcing

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Buyers: Companies and accounting firms
Common scope: Bookkeeping, payroll, close, tax prep
Category: Bookkeeping

How outsourced accounting works

There are two main buyers. Companies outsource some or all of their finance function, often start-ups and small businesses that do not need a full team, sometimes with a fractional CFO on top. Accounting firms outsource work they deliver to clients, such as bookkeeping or tax return preparation, to offshore teams in countries such as India and the Philippines to add capacity. Models range from a provider working in the client's own systems to a managed service on the provider's platform. A newer model combines AI that does the routine coding and reconciliation with accountants who review it, which changes the pricing from hours to a fixed monthly fee. Key questions are data security and access, who reviews the work, what happens at handover, and in firms, client consent and professional rules on confidentiality. Pilot provides outsourced bookkeeping and CFO services; Outmin and Uplinq pair AI bookkeeping with accountant review.

Common questions

What accounting work should stay in-house?+

Approval of payments, decisions on accounting judgements, and ownership of the numbers reported to the board and lenders. Outsourced providers do the work; the company remains responsible for the accounts.

What is offshoring in accounting firms?+

Accounting firms using teams in lower-cost countries, either their own or a provider's, for work such as bookkeeping and tax return preparation, with review by the firm's own staff.

How is outsourced accounting priced?+

Usually a fixed monthly fee based on transaction volume and scope, or hourly rates for project work. AI-assisted services tend to price per month by company size rather than by hours.