The Comprehensive Guide to Back Office Outsourcing

Back office work keeps your business running. It also takes time, focus, and money away from growth. As companies grow, admin tasks pile up. Invoices, data updates, reports, and compliance work start to slow teams down.

This guide explains back office outsourcing in depth. You’ll learn what it is, how it works, which services you can outsource, the costs involved, the benefits, the risks, and how to decide whether it fits your business.

What is Back Office Outsourcing?

Back office outsourcing means delegating internal, non-customer-facing tasks to an external support team. These tasks support daily operations but do not involve direct sales or customer interaction.

Common back office functions include:

• Accounting and finance support
• Data entry and reporting
• Tax preparation assistance
• Payroll and administrative work

Instead of hiring and managing an in-house team, businesses work with a dedicated offshore team that follows documented workflows and reporting structures.

Why Businesses Outsource Back Office Work

Back office tasks grow with scale. Early on, founders and managers handle admin themselves. As volume increases, this leads to overload and errors.

Common reasons businesses outsource:

• Admin work takes too much time
• Teams miss deadlines
• Costs rise with local hiring
• Growth stalls due to lack of focus

Many companies turn to offshore teams, especially in the Philippines, due to structured processes and cost control.

Read more in Epic Rise of Back Office Outsourcing in the Philippines.

How Back Office Outsourcing Works

Successful outsourcing depends on structure.

Step 1: Identify repeatable tasks

Focus on tasks that:

• Repeat daily or weekly
• Follow clear steps
• Need accuracy more than judgment

Examples:

• Invoice processing
• Billing and collections
• CRM and spreadsheet updates

Step 2: Build a dedicated team

You are assigned:

• Role-based staff
• Set working hours
• Clear responsibilities

Your team works only on your account, not shared across clients.

Step 3: Set workflows and reporting

You define:

• Turnaround times
• Review steps
• Communication rules

This prevents delays and rework.

Back Office Services You Can Outsource

Back office outsourcing covers a wide range of operational support.

Accounting and Finance Support

These services handle high-volume, structured financial tasks.

• Accounts Payable Outsourcing
  Invoice processing, vendor payments, reconciliations
• Accounts Receivable Outsourcing
  Billing, collections, and payment tracking
• Bookkeeping Services
  Financial records, reporting, reconciliations

If accounting admin takes too much time, many businesses start with bookkeeping before expanding to payables and receivables.

Data and Administrative Support

These services support growing data volume.

• Data Entry Services
  CRM updates, spreadsheets, and databases

Other admin support:

• Document management
• Report preparation
• System updates

Tax and Compliance Support

Ideal for accounting firms and finance teams.

• Tax Preparation Support
  Data preparation, validation, and filing workflows

This helps manage seasonal workload without temporary hiring.

Benefits of Back Office Outsourcing

Outsourcing works when applied to the right tasks.

Cost control

• Lower labor costs
• No office space required
• Predictable monthly pricing

Many businesses cut admin costs by 40–60%.

See a deeper breakdown in the Hidden Costs of In-House vs Back Office Outsourcing.

Better focus

Your internal team stops handling routine admin.
They focus on sales, strategy, and clients.

Process consistency

Dedicated staff follow documented workflows.
Accuracy and turnaround improve.

Easy scaling

Add staff during peak months.
Reduce support during slower periods.

Back Office Outsourcing vs In-House Teams

Factor	In-House Team	Back Office Outsourcing
Hiring Time	1 – 3 months	2 – 4 weeks
Fixed Costs	High	Predictable
Office Space	Required	Not needed
Scalability	Slow	Flexible
Admin burden	High	Low
Best for	Leadership, strategy	Repeatable admin tasks

What to Outsource First (Decision Guide)

Business Stage	Tasks to Outsource First
Small business	Data entry, bookkeeping
Growing Company	Accounts Payable (AP), Accounts Receivable (AR), reporting
Accounting firms	Tax prep support

Offshore Support vs Local Hiring

Area	Local Hire	Offshore Support
Salary cost	High	Lower
Flexibility	Limited	Scalable
Turnover risk	Medium-High	Lower with dedicated teams
Setup speed	Slow	Fast

When Back Office Outsourcing Makes Sense

Outsourcing works when:

• Admin work grows faster than revenue
• Teams feel overloaded
• Errors increase due to volume
• Local hiring feels too expensive

It fails when:

• Tasks lack documentation
• Oversight is ignored
• Leadership roles are outsourced

Preparation matters.

Risks of Back Office Outsourcing and How to Manage Them

Common risks

• Miscommunication
• Quality issues
• Missed deadlines

How to reduce risk

• Document tasks clearly
• Assign one internal lead
• Set KPIs and review weekly
• Start with one function

Structure protects results.

How to Choose the Right Back Office Outsourcing Partner

Ask direct questions:

• Do you provide dedicated staff?
• How does onboarding work?
• What security measures are in place?
• How do you handle scaling?

Avoid providers who:

• Offer shared staff
• Avoid clear pricing
• Promise instant results

Read more on the Do’s and Don’ts of selecting a back office service provider.