Southeast Asia, a region from the world\u2019s largest continent, offers more than scenic tourist spots and rich cultural heritage. For firms affected by the ongoing <\/span>accountant shortage<\/span><\/a>, this tropical region can be an appealing destination for finding qualified professional accountants at competitive rates.\u00a0<\/span> <\/span><\/p>\n Let\u2019s have a more thorough look at the accounting outsourcing industry in Southeast Asia, the key considerations when deciding where to outsource, and a more granular examination of each country\u2019s accounting and outsourcing competitiveness.<\/span>\u00a0<\/span><\/p>\n \u00a0<\/span><\/p>\n In its newsletter<\/a>, the Institute of Management Accountants (IMA) \u2014 an international organization of accountants and financial professionals \u2014 recognized Southeast Asia as a region that offers promising accounting opportunities.\u00a0<\/span>\u00a0<\/span><\/p>\n \u201cWhat we\u2019re seeing in this region is increasing urbanization, a growing middle class, and a trend towards more manufacturing moving to Asia,\u201d states Josh Heniro, the director of operations of IMA Southeast Asia. Heniro also adds that Southeast Asian countries aim to be viewed as the leading global accountancy hub for Asia Pacific, which triggers \u201ca strong desire for international credentials to help with job seeking, both within and outside the region\u201d.<\/span>\u00a0<\/span><\/p>\n OECD\u2019s <\/span>2024 Economic Outlook report<\/span><\/a> revealed that the Emerging Asian economies* are showing sustained resilience and have contributed strongly to global economic growth. The expansion of its services sector, which is driven by the development of high-technology-based services, also accounts for its continued progression. <\/span>Southeast Asia is also <\/span>a top choice for US companies<\/span><\/a> when reshoring business functions, which makes this country as one of the main contributors to the bullish growth of the region\u2019s outsourcing market.<\/span>\u00a0<\/span><\/p>\n Looking at the numbers of available accounting professionals (<\/span>see image 1<\/span><\/i>), <\/span>six out of 11 countries from this region display a capacity to provide accounting outsourcing services to foreign clients<\/span><\/strong>. These are the Philippines, Singapore, Indonesia, Malaysia, Thailand, and Vietnam.<\/span>\u00a0<\/span><\/p>\n \u00a0<\/span><\/p>\n Image 1.<\/span><\/i><\/strong> A graph showing the three-year growth of the <\/span><\/i>number of accountants who are active members of each Southeast Asian country\u2019s recognized professional accounting organization (PAO)<\/span><\/i><\/strong> under AFA.\u00a0<\/span><\/i>\u00a0<\/span><\/p>\n Source:<\/span><\/i><\/strong> ASEAN Federation of Accountants\u2019 <\/span><\/i>2023 Annual Report<\/span><\/i><\/a>. <\/span><\/i>\u00a0<\/span><\/p>\n \u00a0<\/p>\n While the quantity of accountants can be a good consideration when deciding where to outsource, it\u2019s also good to note several other factors to check if a country can be a suitable accounting outsourcing destination. The next section enumerates the top aspects to consider when choosing an outsourcing location.<\/span>\u00a0<\/span><\/p>\n \u00a0<\/span><\/p>\n Southeast Asian countries have varying status when it comes to accounting outsourcing competitiveness, labor cost, and their ability to work effectively with foreign clients. The factors outlined below are some of the top considerations when checking a country\u2019s capabilities and readiness to handle work from abroad.\u00a0<\/span>\u00a0<\/span><\/p>\n \u00a0<\/span><\/p>\n For firms that have been hit by the ongoing accountant shortage, outsourcing to a country with a huge quantity of accounting professionals can be an easy way to fill talent gaps.\u00a0<\/span>\u00a0<\/span><\/p>\n However, quantity alone wouldn\u2019t suffice.\u00a0<\/span>\u00a0<\/span><\/p>\n To maintain effective finance and accounting operations, one must also look at the quality of accounting professionals that they can source from a certain country. This can mean checking the technical expertise of accountants, their familiarity with international accounting standards, digital know-how, industry knowledge, and the like.<\/span>\u00a0<\/span><\/p>\n An education curriculum hinged on international standards and the presence of recognized professional accounting organizations (PAO) can also be useful in assessing how a country values the progression of their accounting industry.<\/span>\u00a0<\/span><\/p>\n \u00a0<\/span><\/p>\n Assessing a country\u2019s outsourcing market is important for determining their exposure to international trades and relations, experience handling work from abroad, the capacity of their physical and technological infrastructure, and their ability to meet the demands for quality talent.<\/span>\u00a0<\/span><\/p>\n \u00a0<\/span><\/p>\n Effective communication is essential towards achieving outsourcing success. English, being the <\/span>international language of business<\/span><\/a>, is a useful tool to facilitate proper communication between two or more parties. If both client and accountant cannot understand each other due to language barriers, getting anything done and doing proper work may be challenging.<\/span>\u00a0<\/span><\/p>\n Southeast Asian citizens are not native English speakers. Each country within this region has a distinct and exquisite national language and many other provincial dialects. This explains why adding English proficiency to your checklist is a must when weighing your options.<\/span>\u00a0<\/span><\/p>\n Education First\u2019s English Proficiency Index (EF EPI)<\/span><\/a>, which ranks 113 countries by their English skills, is a credible resource to check a country\u2019s English proficiency.\u00a0<\/span>\u00a0<\/span><\/p>\n \u00a0<\/span><\/p>\n Image 2. <\/span>Shows the English proficiency index rankings of Asian countries.<\/span><\/i>\u00a0<\/span><\/p>\n Source: <\/i><\/span>Education First\u2019s English Proficiency Index (EF EPI)<\/span><\/i><\/a>\u00a0<\/span>\u00a0<\/span><\/p>\n \u00a0<\/span><\/p>\n A country\u2019s <\/span>ease of doing business<\/span><\/a> is a good indicator of how conducive their regulatory requirements are to starting and maintaining business operations. This economic assessment is based on different indices such as starting a business, trading across borders, getting credit, protecting investors, paying taxes, and enforcing contracts.<\/span>\u00a0<\/span><\/p>\n \u00a0<\/span><\/p>\n On average, Southeast Asia (all ASEAN member states) boasts a high <\/span>literacy rate of 93.3%<\/span><\/a>. Aside from basic education, the <\/span>region\u2019s access to higher education<\/span><\/a> continues to increase as a result of a growing school-age population, an expanding middle class, and a rising demand for higher-level skills.<\/span>\u00a0<\/span><\/p>\n \u00a0<\/span><\/p>\n Data security is a major concern in the accounting industry. It\u2019s also one of the reasons why some firms are still hesitant to outsource finance and accounting services. After all, cyber incidents can lead to monetary losses and even bring down an organization\u2019s reputation and credibility.<\/span>\u00a0<\/span><\/p>\n The majority of Southeast Asian countries have so far <\/span>enacted their own data and privacy laws<\/span><\/a>. Many organizations from the region are also required to comply with EU\u2019s General Data Protection Regulation (GDPR).<\/span>\u00a0<\/span><\/p>\n Companies belonging to the outsourcing sector are also exerting efforts toward getting certifications relevant to their operations to further increase data protection and prevent leakages of sensitive data. An example is the HIPAA certification for those working with healthcare institutions.<\/span>\u00a0<\/span><\/p>\n \u00a0<\/span><\/p>\n It\u2019s also worth checking if a country\u2019s government has been supportive of its outsourcing industry. The more support it receives from the government, the more favorable the conditions will be for companies that are planning to outsource.<\/span>\u00a0<\/span><\/p>\n \u00a0<\/span><\/p>\n One of the most distinctive features of Southeast Asia is its cultural diversity. No two countries are alike; each nation has a unique and rich culture.\u00a0<\/span>\u00a0<\/span><\/p>\n But as paradoxically as it sounds, these countries (except Thailand) also share one thing in common \u2014 all ASEAN countries have deep <\/span>historical ties with the West due to the latter\u2019s colonization<\/span><\/a>. Such affiliation had left strong influences in each country\u2019s economic policies, ethnic identities, political ideologies, and religious affiliation, and is expected to remain for a considerable time.<\/span><\/p>\n In modern times, this familiarity with Western culture can be a huge advantage, especially for those belonging to the outsourcing sector.<\/span>\u00a0<\/span><\/p>\n \u00a0<\/p>\n Given the considerations outlined in the above section, let\u2019s examine the six Southeast Asian countries that display a capacity to provide accounting outsourcing services to foreign clients:\u00a0<\/span>\u00a0<\/span><\/p>\n \u00a0<\/span><\/p>\n \/ <\/span>Number of registered accountants <\/span><\/strong>(<\/span><\/i>Professional Regulatory Board \u2013 Accountancy via BusinessNewsAsia,<\/span><\/i><\/a> 2023)<\/span><\/i>:<\/span><\/i><\/strong> nearly 200,000<\/span>\u00a0<\/span><\/p>\n![\"A](\"https:\/\/www.dvphilippines.com\/hs-fs\/hubfs\/A%20Look%20Through%20Southeast%20Asias%20Accounting%20Outsourcing%20Industry_Featured.jpg?width=1434&height=600&name=A%20Look%20Through%20Southeast%20Asias%20Accounting%20Outsourcing%20Industry_Featured.jpg\")
<\/span><\/p>\nWhy Southeast Asia?<\/span><\/strong>\u00a0<\/span><\/h2>\n
![\"A](\"https:\/\/www.dvphilippines.com\/hs-fs\/hubfs\/undefined-2.png?width=581&height=686&name=undefined-2.png\")
<\/span><\/span><\/p>\n*The Emerging Asian economies is the collective term used to refer to the member countries of the Association of Southeast Asian Nations (ASEAN), the People\u2019s Republic of China, and India.<\/span><\/i>\u00a0<\/span><\/h6>\n
Key factors to consider when choosing an outsourcing destination in Southeast Asia<\/span><\/strong>\u00a0<\/span><\/h2>\n
1. Availability and quality of accounting professionals<\/strong><\/span> <\/span><\/h3>\n
2. Status of the outsourcing market<\/strong><\/span> <\/span><\/h3>\n
3. English proficiency<\/span><\/strong><\/h3>\n
![\"A](\"https:\/\/www.dvphilippines.com\/hs-fs\/hubfs\/undefined-3.png?width=654&height=570&name=undefined-3.png\")
<\/span><\/span><\/p>\n4. Ease of doing business\u00a0<\/span><\/strong><\/h3>\n
5. Literacy rate<\/span><\/strong><\/h3>\n
6. Data security<\/strong><\/span> <\/span><\/h3>\n
7. Government support<\/span><\/strong><\/h3>\n
8. Cultural affinity<\/strong><\/span> <\/span><\/h3>\n
Southeast Asian countries in focus<\/span><\/strong>\u00a0<\/span><\/h2>\n
Philippines<\/span><\/strong>\u00a0<\/span><\/h3>\n