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Edition: 17; Released: February 2022
Executive Pool: 5323
Companies: 142 – Players covered include Accenture PLC; Capgemini SE; Cognizant Technology Solutions Corporation; Exlservice Holdings, Inc.; Genpact; Hewlett-Packard Development Company LP; IBM Corporation; Infosys BPM Limited; Serco Group Plc; Sutherland Global Services; Tata Consultancy Services Ltd.; Wipro Ltd.; WNS (Holdings) Ltd. and Others.
Coverage: All major geographies and key segments
Segments: Type (Multi-Process F&A BPO, Source-to-Pay Outsourcing, Record-to-Report Outsourcing, Procure-to-Pay Outsourcing, Order-to-Cash Outsourcing)
Geographies: World; United States; Canada; Japan; China; Europe (France; Germany; Italy; United Kingdom; Spain; Russia; and Rest of Europe); Asia-Pacific (Australia; India; South Korea; and Rest of Asia-Pacific); Latin America (Argentina; Brazil; Mexico; and Rest of Latin America); Middle East (Iran; Israel; Saudi Arabia; United Arab Emirates; and Rest of Middle East); and Africa.
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Global Finance and Accounting Outsourcing Market to Reach US$53.4 Billion by the Year 2026
Accounting outsourcing service constitutes a critical function in the overall finance and accounting market. The global economic crisis is expected to foster the demand for F&A BPO activities, as the service needs less customization when the process and technology are outsourced (in comparison to customer care and HR BPO). Growing demand for transparency and increased regulations are driving companies to standardize their F&A (Finance and Accounting) BPO activities. The move towards standardization is also driving the incorporation of best practices in financial management, which is major driving factor for the adoption of F&A BPO services. The regulated nature of numerous F&A standards allows BPO service providers to deploy a common platform for various customers, thereby reducing customization, improving margins, and allowing customers to capitalize on the economies of scale. Number of new companies starting to use accounting outsourcing each year has been constantly increasing while the service contracts of older clients have also been extending for outsourcing companies. Going forward, outsourcing service providers would increasingly harness advanced technologies like machine automation and artificial intelligence for speeding up tasks and increasing productivity for clients. The finance and accounting outsourcing domain is witnessing a pressing need for providers to migrate from archaic pricing models towards automation initiatives to stay relevant and ensure renewal of service contracts.
Amid the COVID-19 crisis, the global market for Finance and Accounting Outsourcing estimated at US$43.1 Billion in the year 2022, is projected to reach a revised size of US$53.4 Billion by 2026, growing at a CAGR of 5.9% over the analysis period. Multi-Process F&A BPO, one of the segments analyzed in the report, is projected to grow at a 6.8% CAGR to reach US$19.3 Billion by the end of the analysis period. After a thorough analysis of the business implications of the pandemic and its induced economic crisis, growth in the Source-To-pay Outsourcing segment is readjusted to a revised 5.9% CAGR for the next 7-year period. This segment currently accounts for a 24.5% share of the global Finance and Accounting Outsourcing market.
Global businesses are increasingly opting for onshore or nearshore outsourced services for accounting and finance functions that are at the higher-end of the value chain. For instance, companies are outsourcing high-value functions such as financial planning and analysis, and investigation of accounting errors, moving away from the earlier trend that focused on transaction processing. Though India and other low-cost destinations predominate the offshoring market for F&A functions, US companies are now looking towards other locations, particularly from Latin American countries of Argentina, Mexico and Brazil. The new destinations are witnessing increased outsourcing of functions such as travel-and- entertainment expense processing, invoice processing, and accounts receivables. Also nearshoring is emerging as the favored outsourcing model among companies, particularly among US and European businesses due to cultural similarities with neighboring nations. For instance, China and Vietnam are major nearshore destinations for Japanese businesses, while Brazil and other Latin American countries are emerging as nearshore destinations for US companies. In the US, federal, local and state governments are likely to drive the demand for nearshore outsourcing services. Nearshore facilities are also expected to benefit from reducing cost-effectiveness of larger offshore centers owing to the elimination of tax exemptions, which would prompt businesses to opt for nearshore delivery centers. With businesses continuing to prefer geographically close destinations for performing high-level activities such as corporate tax and budgeting, the trend towards nearshoring is likely to gain strength. The model also finds favor as companies increasingly look to transfer complex business processes into shared services environment. Many countries offer FAO services offering their own benefits.
The U.S. Market is Estimated at $19.3 Billion in 202, While China is Forecast to Reach $2 Billion by 2026
The Finance and Accounting Outsourcing market in the U.S. is estimated at US$19.3 Billion in the year 2022. The country currently accounts for a 45.7% share in the global market. China, the world second largest economy, is forecast to reach an estimated market size of US$2 Billion in the year 2026 trailing a CAGR of 7.6% through the analysis period. Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at 4.9% and 5.4% respectively over the analysis period. Within Europe, Germany is forecast to grow at approximately 5.2% CAGR while Rest of European market (as defined in the study) will reach US$2.1 Billion by the end of the analysis period. In Asia Pacific, adoption of latest technologies would drive accounting software market growth.
Record-to-Report Outsourcing Segment to Reach $9.4 Billion by 2026
In the global Record-to-Report Outsourcing segment, USA, Canada, Japan, China and Europe will drive the 5.5% CAGR estimated for this segment. These regional markets accounting for a combined market size of US$5.7 Billion will reach a projected size of US$8.2 Billion by the close of the analysis period. China will remain among the fastest growing in this cluster of regional markets. Led by countries such as Australia, India, and South Korea, the market in Asia-Pacific is forecast to reach US$837.3 Million by the year 2026. More
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