Finance and accounting outsourcing (FAO) is the practice of contracting some or all of a company’s finance functions — from bookkeeping and payroll to management accounts and financial planning — to an external team of qualified accountants, rather than employing that team in house. It is one of the most established forms of outsourcing because finance work is rules-based, standardised under frameworks like IFRS, and easy to deliver remotely.
This guide defines FAO, sets out the functions it covers, explains where it sits between BPO and KPO, and outlines what makes a destination credible for finance work.
Key Facts
| Item | Detail |
|---|---|
| What it stands for | Finance & Accounting Outsourcing |
| Definition | Outsourcing finance functions to external accountants |
| Spans | Transactional (BPO) and analytical (KPO) work |
| Core functions | AP/AR, bookkeeping, payroll, management accounts, FP&A |
| Reporting standard | IFRS (international) |
| Engagement size | Single process to full finance function |
| Key destination criteria | Qualified accountants, IFRS, English, data protection |
| Kenya accountants | 40,000+ ICPAK members; active ACCA community |
| English (EF EPI 2025) | Kenya rank 19, score 593 (High) |
| Typical pricing | Per role or retained finance team |
Key terms
- FAO
- Finance and accounting outsourcing — delegating finance functions to an external provider's qualified team.
- FP&A
- Financial planning and analysis — budgeting, forecasting and management reporting, the analytical end of FAO.
- IFRS
- International Financial Reporting Standards — the global accounting standards FAO teams typically work under, aligning their output with international reporting requirements.
What FAO means
Answer: FAO is handing finance processes to an external team of accountants who run them to your standards and reporting calendar.
A company might outsource a single process — say, accounts payable — or its entire finance function up to management reporting. The provider supplies qualified accountants, the systems, and the controls; the client keeps ownership of decisions, sign-off and strategy. Because finance work follows defined rules and standards, it transfers to a remote team more cleanly than many other functions, provided the team is properly qualified and the data is handled securely.
What FAO covers
Answer: From transactional processing to analytical reporting — the full finance stack can be outsourced in pieces or as a whole.
| Layer | Functions |
|---|---|
| Transactional | Accounts payable/receivable, bookkeeping, bank reconciliation, payroll |
| Periodic | Management accounts, month-end close, consolidation |
| Analytical | FP&A, budgeting, forecasting, management reporting |
| Specialist | Tax preparation support, audit support, technical accounting |
For the operational layers, see our finance outsourcing in Kenya and payroll outsourcing guides; for the standards layer, see IFRS accounting outsourcing.
FAO between BPO and KPO
Answer: Transactional finance is BPO; analytical finance is KPO; most FAO engagements blend the two.
Invoice processing and bookkeeping are operational, measured on volume and accuracy — that is BPO. FP&A, technical accounting and management reporting require a qualified accountant’s judgement — that is KPO. The practical implication is staffing: a credible FAO provider needs both efficient processors and qualified accountants, and prices the analytical work per role rather than per transaction.
Why companies outsource finance
Answer: Cost, access to qualified accountants, scalability across reporting cycles, and continuity are the main drivers.
Finance talent is expensive to hire and retain in high-cost markets, and demand spikes around month-end, year-end and audit. An outsourced team smooths that, adds qualified capacity at lower cost, and reduces key-person risk. The savings can be substantial — KenInvest puts Kenyan labour 60-70% lower than the US, Europe and Australia — but for finance the deciding factor is usually qualification and standards, not the headline rate. Our cost overview and ACCA salary guide set out the economics.
What makes a good FAO destination
Answer: A deep pool of IFRS-trained, English-speaking qualified accountants, strong data protection, and time-zone overlap with your reporting calendar.
Kenya illustrates the profile: more than 40,000 ICPAK-certified accountants and an active ACCA community, all trained under IFRS; English as an official language (rank 19 on the 2025 EF English Proficiency Index, score 593); a GDPR-aligned Data Protection Act 2019; and a GMT+3 time zone that overlaps UK and European month-end cycles. Those are the attributes that make finance work safe to delegate — see hiring ACCA accountants in Kenya and the Kenya talent hub.
Key Takeaways
- FAO is outsourcing finance functions — from bookkeeping to FP&A — to an external team of qualified accountants.
- It spans transactional BPO work and analytical KPO work; most engagements blend both.
- Drivers are cost, access to qualified accountants, scalability across reporting cycles, and continuity.
- The best destinations offer IFRS-trained, English-speaking accountants, strong data protection and time-zone fit — not just low cost.
Looking for a Kenya outsourcing partner?
If you are considering outsourcing finance work, a Kenya-based provider can help you assess IFRS-qualified accountants and data-protection fit for your reporting needs.
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Frequently Asked Questions
What is finance and accounting outsourcing?
FAO is contracting some or all of a company’s finance functions — bookkeeping, payroll, management accounts, financial planning — to an external team of qualified accountants rather than employing them in house.
What functions does FAO cover?
Accounts payable and receivable, bookkeeping, bank reconciliation, payroll, management accounting, FP&A, tax preparation support, and audit support — from a single process to a full outsourced finance function.
Is FAO BPO or KPO?
Both. Transactional finance (invoice processing, bookkeeping, payroll) is operational BPO; analytical finance (FP&A, management reporting, technical accounting) is judgement-based KPO. Many engagements blend the two.
What makes a good FAO destination?
A deep pool of qualified accountants, IFRS training, strong English, reliable data protection, and time-zone overlap for month-end and reporting cycles. Kenya, for example, has 40,000+ ICPAK-certified accountants trained under IFRS.
Sources & References
- Institute of Certified Public Accountants of Kenya (ICPAK), membership data, accessed 2026-06-13. https://www.icpak.com/
- ACCA, “Annual Integrated Report 2025,” accessed 2026-06-13. https://www.accaglobal.com/
- EF Education First, “EF English Proficiency Index 2025,” accessed 2026-06-13. https://www.ef.com/epi/
- Kenya Investment Authority (KenInvest), “BPO sector pack” (cost-competitiveness), 2025, accessed 2026-06-13. https://www.investkenya.go.ke/
Published by Outsourcing.ke.
Further Reading
- Finance Outsourcing to Kenya — the function in depth
- What Is KPO? — the knowledge-work branch
- ACCA Salary in Kenya — accountant pay benchmarks
- Employer of Record Kenya — EOR services for companies hiring in Kenya