Competition for qualified finance professionals in the US is fierce. 83% of leaders report experiencing a finance talent shortage.
It's getting worse. The talent pool is steadily shrinking, as the number of US candidates sitting for the CPA exam plummets to historic lows.
High demand makes hiring in-house teams expensive. To stay competitive, lean companies are outsourcing finance roles, often partnering with international providers.
Thinking of outsourcing your finance team? Check out our complete guide to finance outsourcing, which covers benefits, risks, best practices, and more.
What is finance outsourcing?
Finance outsourcing involves delegating financial operations to a third party. This can range from accounting and payroll to financial analysis. Companies may outsource to freelance accountants or financial services firms. Nearshoring — outsourcing to nearby countries — is gaining popularity, with more businesses hiring global teams to manage finances.
Why companies outsource finance
- Cost savings. Outsourcing to countries with lower living costs or favorable exchange rates can reduce salary and benefits expenses.
- Access to talent. Regions like Latin America offer a largely untapped pool of qualified finance professionals.
- Speed and flexibility. Startups can scale quickly without the time-consuming process of hiring, onboarding, and training new staff.
- Technology advantage. Financial service providers often utilize state-of-the-art technology, enhancing efficiency.
- Focus on core business. Outsourcing financial services lets you concentrate on product development and sales.
Risks and how to mitigate them
- Loss of control. Reduced oversight can lead to anxiety. Establish clear communication channels with your provider.
- Time zone delays. Outsourcing to far-off countries may cause delays in communication. Nearshoring can reduce this risk.
- Compliance gaps. Different countries have varying compliance standards. Make sure practices align with financial regulations in home and partner countries.
- Data security. Sharing financial data with third parties poses risks. Vet providers thoroughly and ask about their data security measures.
Top finance functions to outsource
- Bookkeeping & General Accounting. Recording and organizing financial transactions to maintain accurate records.
- Payroll. Processing employee compensation, including wages and deductions.
- Accounts Payable. Managing and paying company debts to suppliers and vendors.
- Accounts Receivable. Tracking and collecting payments owed by customers.
- Taxes & Compliance. Calculating and remitting taxes to meet legal obligations.
- Financial Controller. Overseeing accounting operations and financial reporting to ensure accuracy and compliance.
- FP&A (Financial Planning & Analysis). Conducting budgeting, forecasting, and analysis to support decision-making and optimize business performance.
- CFO Services. Providing strategic financial leadership, including financial planning, reporting, cash flow management, and risk assessment, to guide organizational growth and stability.
- Business Intelligence (BI). Analyzing financial and operational data to extract actionable insights, enabling informed decision-making and performance optimization.
Best practices for finance outsourcing
Start small
Begin with a single role or project to test the waters before expanding your outsourcing efforts. Consider testing with a single role or project before committing to a wider scope.
Set clear KPIs
Ask yourself: What does success look like when you outsource financial services? Define key performance indicators around profitability, cost savings, time savings, and return on investment.
Track ROI and performance
Once you have your KPIs defined, track them. Monitoring your KPIs helps evaluate the effectiveness of your outsourcing strategy so you can make informed adjustments.
Prioritize integration
Choose the right partner
Select providers with relevant industry experience and positive reviews. If you're looking to nearshore financial services staff, Howdy has vetted top Latin American talent ready to join your team. Reach out to book a demo today.
The nearshoring advantage: Why LatAm?
Nearshoring financial services to Latin America has surged in popularity as companies seek cost-effective, high-quality solutions. Here are the benefits of nearshoring financial operations to LatAm:
Time zone compatibility
LatAm's proximity to North America translates to overlapping business hours. Alignment of business hours means faster responses and real-time communication.
High talent quality at lower cost
LatAm labor costs are lower than in North America, allowing you access to top-tier talent at lower rates. A competitive exchange rate with the US helps your hiring dollars go further.
Cultural alignment
Hire top LatAm finance professionals
Looking to hire expert LatAm financial professionals? Let's talk. Howdy.com specializes in assembling dedicated financial teams in LatAm, delivering pre-vetted candidates who seamlessly integrate into your team. Whether you need bookkeeping, payroll, compliance, or financial analysis support, Howdy can help you build a team that aligns with your goals and culture. Book a demo to get started.
