Outsourcing Financial Roles: What to Outsource and What to Keep In-House

In today’s globalized economy, businesses of all sizes are turning to outsourcing to reduce costs, improve efficiency, and access specialized expertise. The financial sector is no exception—outsourcing accounting, bookkeeping, tax preparation, and even CFO-level tasks has become increasingly common.

However, not all financial roles are equally suited to outsourcing. Some functions benefit greatly from remote teams, while others require close internal oversight.

In this article, we’ll explore:
✔ Which financial roles are best to outsource
✔ Which roles should stay in-house
✔ Outsourcing vs. offshoring
✔ How to find reliable outsourcing partners

Financial Roles Best Suited for Outsourcing

The following financial functions are commonly outsourced to offshore teams, due to their process-driven nature and lower need for real-time strategic decision-making.

1. Bookkeeping & Data Entry

Outsourced bookkeepers handle day-to-day financial transactions, reconciliations, and ledger maintenance. Many outsourcing firms have a strong talent pool in this area, with professionals trained in QuickBooks, Xero, and other accounting software.

2. Accounts Payable (AP) & Accounts Receivable (AR)

Managing invoices, processing payments, and following up on receivables are repetitive tasks that can be efficiently handled by an outsourced team. Automation tools like Bill.com and Zoho Books further streamline the process.

3. Payroll Processing

Outsourcing payroll ensures compliance with local tax laws while reducing administrative burdens. Outsourced accountants are well-versed in domestic and international payroll systems such as ADP, Gusto, and Paychex.

4. Tax Preparation & Compliance

Tax filing, especially for routine compliance, can be outsourced to professionals familiar with IRS, HMRC, or ATO regulations. However, complex tax strategies should remain in-house or with a local CPA.

5. Financial Reporting & Analysis

Monthly financial statements, variance analysis, and KPI reporting can be outsourced effectively. Many outsourcing firms provide real-time dashboards using tools like Power BI and Tableau.

6. Virtual CFO Services

For startups and SMEs, a Fractional CFO from an outsourcing firm such as Preferred CFO can provide strategic financial guidance without the cost of a full-time executive.

Financial Roles Best Kept In-House

While many financial tasks can be outsourced, some roles require close collaboration with leadership and deep company-specific knowledge. If there is insufficient in-house expertise, a fractional CFO can fill the gap.

1. Strategic Financial Planning

Long-term budgeting, investment decisions, and mergers & acquisitions require executives who understand the company’s vision intimately.

2. Internal Audit & Fraud Prevention

Sensitive audits and fraud risk management should remain under internal control to ensure objectivity and security.

3. High-Level Decision-Making (CFO/Finance Director)

While Virtual CFOs can assist, core financial leadership should remain in-house or with a trusted local advisor.

4. Regulatory & Legal Advisory

Compliance with rapidly changing local laws (e.g., SEC, GAAP, IFRS) is best handled by in-house experts or domestic legal teams.

Outsourcing or Offshoring?

The choice between offshoring and domestic outsourcing isn't just about cost; it's about aligning the function with the right blend of expertise, control, and strategic importance.

It's More Than Just Geography

• Offshoring is a subset of outsourcing defined by geographic distance. It primarily targets cost efficiency through labor arbitrage but introduces challenges of time zones, culture, and distance.

• Domestic Outsourcing (Onshoring/Nearshoring) involves contracting a third-party within your own country. It prioritizes ease of collaboration, cultural alignment, and reduced risk over maximum cost savings.

Offshore models are best suited for high-volume, repetitive, and well-documented tasks where the primary goal is efficiency and scale.

Domestic outsourcing is preferable for complex, sensitive, or strategic tasks that require close collaboration, deep understanding of the local business environment, and higher levels of judgment.

Moreover, some companies choose a hybrid approach: offshore for lower cost on standardized tasks; domestic for control, collaboration, and complexity. 

The right choice is the one that best aligns with the specific task's requirements and your company's overall risk tolerance and strategic goals.

How to Find Reliable Outsourcing Partners

Choosing the right outsourcing provider is critical. Here’s how to ensure quality:

1. Look for Industry-Specific Experience

Seek firms with expertise in your sector (e.g., e-commerce, healthcare, manufacturing).

2. Check Certifications & Reviews

Reputable providers often have:

• ISO certifications

• Positive client reviews

• Case studies from past clients

3. Start with a Pilot Project

Test the waters with a small task (e.g., monthly bookkeeping) before committing to long-term contracts.

4. Ensure Data Security

Verify that the provider uses encrypted communication, secure cloud storage (AWS, Microsoft Azure), and NDAs.

5. Consider Time Zone Alignment

It can be difficult to communicate with an outsourced financial team when working hours don't overlap. A company in New York may need to make special arrangements to work with an outsourcing company in Hawaii. On the other hand, the Philippines’ GMT+8 time zone works well for most  U.S. based businesses.

In Summary

Outsourcing financial roles can lead to significant cost savings, efficiency gains, and access to top talent. However, businesses must carefully assess which functions to outsource and which to keep internally.

By following best practices in selecting an outsourcing partner—prioritizing experience, security, and scalability—companies can build a seamless offshore finance team that drives growth without compromising quality.

How to Vet an Outsourcing Provider for Financial Roles