Services provided by accounting outsourcing companies are designed to meet the accounting, tax, financial management and consulting needs of companies. They can perform a company’s monthly, quarterly and annual accounting and bookkeeping tasks, or supplement the present staff to lessen the usage of administrative time. This enables a company to concentrate on its core competencies leaving the specialized support functions to professionals. When evaluating a city to outsource Finance and Accounting (F&A) work companies need to consider various factors, with security and privacy being amongst the most important. Specifically, the companies need to evaluate the cities for:

In this article, we will discuss some of the prime centers for Finance and Accounting Outsourcing (FAO) and the trends in the FAO industry.

India

Mumbai and Delhi (National Capital Region) in India are prime F&A offshore centers. Mumbai is the financial hub of India and companies such as Morgan Stanley, Lehman Brothers, WNS, Principal, Citibank and JP Morgan have centers there. Delhi is another alternative for an F&A center in India. Apart from being the capital of the country, it has the largest scale of skilled and competent workforce among key offshore destinations. Genpact, EXL Services, Fidelity Investments, Xansa and IBM have centers there. Chennai has historically been the financial and business hub of South India, and has the F&A operations of Accenture and TCS.

The Philippines

Manila has emerged as a preferred destination for shared-service centers of companies like P&G, Chevron Texaco, Citibank and HP. Accenture was one of the first to base their F&A center of excellence in Manila. Of the total workforce that is involved in FAO in the Philippines, about 60% are women, who constitute a more stable workforce. The accounting and legal system in the Philippines is strongly influenced by the U.S., making it a preferred destination for American firms.

Sri Lanka

Colombo is becoming a hot spot for FAO. The city’s success may be primarily attributed to the fact that it has the highest number of certified accountants (U.K. certified) after the U.K. itself, and the cost of setting up FAO centers is relatively cheaper than it is in the U.K. and even India. HSBC, OfficeTiger, Astron, WNS and others find Colombo a financial center of excellence that competes favorably with the best.

Central Europe

Central and Eastern Europe (CEE) are emerging as favorites for F&A offshoring for the European market, the frontrunner being Krakow, Poland. There are approximately 30,000 graduates in Krakow, of which about 21,000 are graduates in economics. Capgemini has its largest FAO center in Krakow. Some of the other cities in the CEE that are prime locations for F&A outsourcing are Bratislava, Prague, Budapest and Bucharest. Accenture, Hewitt, IBM, Diageo and others have their European services centers in these CEE cities. Diageo, the world’s leading premium drink business, located its business services center in Budapest in 2001. Now, the center employs about 450 people and performs financial and administrative tasks for 13 European Diageo business units.

United Kingdom

The U.K. is still a preferred destination for FAO, even though the costs are high. This is primarily because of the available talent pool. Manchester has emerged as an important FAO center with good transport and business infrastructure, a wide and deep pool of talent, and compliance with regulatory and customer expectations.

The Bank of New York and The Royal Bank of Scotland have service centers in Manchester. Xansa provides shared services for BT, O2 and MyTravel. Network Rail, Michelin, Chep, Marks & Spencer, Tetra Pak, Astra Zeneca and JT International have shared service centers in Manchester as well.