Before you offshore accounting, automate
As finance leaders plan for 2025, I see many of my controller friends responding to staffing challenges by outsourcing or offshoring accounting work.
After all, if you’re facing a looming audit or lengthy month-end process, why not hire talented professionals around the globe—for example, from India, the Philippines, or Latin America—to categorize reconciliations at a fraction of the cost of their U.S. counterparts? A recent survey reported that 90% of CFOs outsource their accounting functions. Even Google moved several finance functions outside the U.S. earlier this year.
But there’s an underused strategy that finance leaders should consider more seriously to improve efficiency: automation. Here’s how we use automation at Ramp to enable our lean accounting team of seven to support more than 750 employees.
Mature accounting automation
Like other accounting departments, our team at Ramp automates expense categorization, basic reconciliations of straightforward accounts such as cash, prepaids, fixed assets, and accounts payables, and multi-entity consolidation.
Many teams stop their automation efforts here—but at Ramp, we’ve successfully automated more complex accounting work, like P&L reconciliations.
What accounting teams typically automate | Opportunities for further automation |
|---|---|
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Teams usually reconcile P&L by hand because of its complexity. But at its core, the work is predictable, ongoing, and recurring. At Ramp, we’ve embedded accounting logic directly into the product that defines how revenue should be categorized. The resulting data flows directly to our data cloud and business intelligence tools, and allows us to automatically generate reports every month that map transactions to our general ledger. Instead of manually creating reports, my team simply reviews them and uploads the final transactions and summaries to NetSuite.
In addition to automation depth, we’ve invested in automation breadth to support non-finance employees. Most employees doing day-to-day finance work don’t actually sit under the Finance function. Yet they’re responsible for requesting budgets, making purchases, submitting invoices and expenses, and approving bills. Tools that streamline the entire intake-to-pay procurement process and eliminate manual expense reporting offer compounding benefits as your organization grows.
These are just a few areas that many accounting teams have yet to automate, meaning they are missing opportunities to improve productivity and strategic focus. At Ramp, we’re continuing to work with our engineering team to push the boundaries of our automation. We’re building tools that automatically compare Ramp’s data with third-party data sources and flag exceptions for human review. We’re also automating more advanced flux analysis to enable profit analysis by product line. My ultimate goal is to integrate journal entry uploads to NetSuite and enable a continuous close.
When to automate, outsource, or offshore
As finance leaders look to the second half of the year, they need to ask which resourcing strategy will give them the best return—quantitatively and qualitatively. Here’s a simple decision framework:
Type of work | Examples | Recommended approach |
|---|---|---|
Is an immediate, non-complex need | Journal entries review, audit reconciliations | Outsource at first, automate after |
Requires nuanced and judgemental analysis | Estimates | Outsource or offshore |
Benefits from in-person collaboration | Complex accounting | Outsource or offshore |
Requires specialist expertise | Tax, valuation, equity management | Outsource |
Requires international expertise and knowledge | Compliance for global entities | Outsource or offshore |
Is repetitive | Reconciliations, journal entries, bank data | Automate |
Uses predictable logic | Opex categorizations | Automate |
Volume grows over time | Expense categorizations | Automate |
Is temporary | Audit tasks (substantive testing) | Automate |
Outsourcing or offshoring may be the most efficient solution if work requires subjective analysis or specialized knowledge. However, automation will benefit your teams more whenever work is repetitive and volume continuously grows over time.
Don’t let complexity deter you. In recent years, numerous accounting software providers like Rillet, Avise, Finta, Puzzle, and Campfire have emerged to help companies automate more complex reconciliations. Leading accounting systems like NetSuite, Sage Intacct, and Xero have also expanded their capabilities.
For companies with sensitive data, I recommend getting in-house engineering resources to develop your automation. This approach may seem more expensive than offshoring or outsourcing, but over time, it will end up saving you more. Investing in automation is like buying real estate—the price rarely goes down, so the sooner you automate, the better. If you don’t have internal engineering resources, you could get creative and consider fractional development services or tech-oriented accounting firms for more custom tooling.
Ultimately, whether to outsource, offshore, or automate is a question of resource allocation. Often, automation generates the most efficiency gains despite higher upfront costs.
Scale your accounting function
The accountant shortage is a long-term problem that requires finance leaders to be proactive and innovative. What new automation strategies can you start testing to unburden your team in 2025? From our experience at Ramp, you might be able to automate more than you think.