Maintaining a strong finance team is critical for any organization, but the staffing and structuring of that team is changing rapidly. Over the years, the debate between a fully in-house finance operation versus completely outsourced functions has given way to a third, increasingly dominant option: the hybrid model.
The Shift Toward Outsourcing
For decades, back-office finance functions - bookkeeping, transaction processing, payroll were viewed as internal responsibilities. But that mindset is evolving. A 2025 survey from Financial Executives International (FEI) found that 52% of companies are already outsourcing accounting or finance functions. This shows how widespread financial outsourcing has become.
Why the shift? The drivers are familiar: cost efficiency, access to specialized talent, and growth. According to one provider, outsourcing finance can reduce operational costs by 20–40%, depending on how much of the work is externalized.
Moreover, the market for finance and outsourced accounting is booming. The global market was valued at nearly USD 46.9 billion in 2024 and is projected to reach USD 83.6 billion by 2034, growing at a compound annual growth rate (CAGR) of around 5.9%. These numbers shows not just cost-cutting, but real demand for growing and flexible financial services.
Challenges of Fully Outsourced or Fully In-House Models
Fully In-House: Strengths and Drawbacks
When your finance function is fully in-house, you gain direct control, in-depth organizational knowledge, and quick decision-making power. Your finance team is integrated into the business, understands your culture, and can move fast when required.
But running a full in-house finance division is expensive. Hiring skilled accountants, financial analysts, or even a CFO involves salaries, benefits, office space, and continuous training. For small or mid-sized companies, this can be a burden. And when businesses fluctuate, a large fixed-cost finance team may not scale efficiently.
Fully Outsourced: Efficiency, But at a Cost
On the other hand, outsourced accounting and finance services bring external expertise and flexibility. Outsourcing partners can handle transaction processing, reporting, tax compliance, and more. According to Wipfli’s outsourcing report, 47% of companies outsource finance and accounting tasks.
Yet, fully handing over your finance operation is risky. Some leaders talk about the concern regarding quality, data security, and a lack of commitment from external teams. Also, a surprising analysis shows that 60%of finance outsourcing contracts won’t be renewed by 2025 not necessarily because firms dislike outsourcing, but because traditional contracts are proving inflexible and unable to support changing strategic needs.
Enter the Hybrid Model: Best of Both Worlds
This is where the hybrid model enters. Blending in-house financial expertise with outsourced finance capabilities. Rather than choosing one extreme, companies are increasingly combining them to get flexibility and control.
What Does a Hybrid Finance Team Look Like?
In a hybrid structure, your basic finance team remains in-house: perhaps your strategic finance leaders, the CFO, FP&A (financial planning and analysis) professionals, and controllers. Meanwhile, more transactional or repetitive tasks- bookkeeping, payroll, accounts payable are managed via outsourced accounting providers or financial outsourcing firms.
This model gives you:
- Scalability: You can outsource high-volume periods (for instance, end-of-quarter reporting) without expanding your headcount permanently.
- Cost Efficiency: By offloading transactional tasks, you turn some fixed costs into variable ones, paying only when you need the help.
- Access to Specialized Skills: Outsourcing firms often bring advanced technology (AI, RPA, cloud) and domain expertise that might be too expensive to build internally.
- Control and Governance: Critical strategic decisions stay with your internal finance team, making sure that it aligns with the company’s long-term finance strategy.
Why Hybrid Models Are Winning Right Now
Here are several reasons why this blended approach is rapidly becoming the go-to:
- Addressing Talent Shortages
According to FEI, 27% of companies are increasing outsourcing to deal with talent gaps in their finance functions. As finance roles demand more data literacy, technology skills, and analytical capabilities, the hybrid model makes it easier to plug gaps without hiring full-time. - Riding the Tech Wave
The outsourcing space is no longer manual data entry, it’s increasingly powered by automation, AI, and cloud. In fact, FAO (finance and accounting outsourcing) providers are quickly integrating these technologies. By engaging external providers, firms can tap into these capabilities without building their own tech stack. - Improving Resilience
A hybrid finance team enhances risk management. Your internal team maintains oversight, while outsourced teams handle non-core work. This separation avoids overloading your in-house staff and reduces single points of failure. - Cost Efficiency with Control
Hybrid structures enable cost optimization: you outsource where it’s cheap and effective, and retain in-house control where strategy matters most. Outsourcing providers claim savings of 20–40% in operational costs. - Flexibility to Scale
As business needs change - seasonal demand, expansion into new markets, or regulatory pressures. A hybrid finance team allows you to scale effectively. You’re not locked into a fixed staff, but your leadership remains balanced.
Real-World Examples and Use Cases
Consider a mid-sized SaaS company. During regular months, its in-house finance team handles cash-flow forecasts, investor reporting, and regulatory compliance. But when year-end reporting or tax season comes, the company leans on an outsourced accounting partner to process invoices, reconcile accounts, and close books faster. This hybrid structure saved them approximately 35% on finance operating costs while improving reporting speed.
In larger enterprises, some global CFOs employ shared service centers (offshore), but also keep finance executives on site for strategy, governance, and decision-making. These firms report better resource utilization, lower cycle times, and more reliable financial planning.
Risks and Considerations
While hybrid models offer many advantages, they’re not without caveats. Companies considering this route should be aware of:
- Vendor Management Complexity: Managing an outsourcing partner takes effort-monitoring performance, aligning on goals, and building trust.
- Data Security: Entrusting sensitive financial data to an external provider brings concerns about confidentiality and compliance.
- Cultural Fit: External teams may not understand your business culture, so you need clear communication and governance mechanisms.
- Cost-Benefit Misalignment: Without proper planning, outsourcing costs may appear slowly, or the anticipated cost efficiency may not materialize.
- Change Management: Shifting to a hybrid model often requires a re-think of your finance strategy, processes, and internal roles.
Building a Future-Ready Finance Strategy
If you’re considering making the move to a hybrid finance model, here’s a suggested path:
- Audit Your Current Finance Team
Identify which functions are high-value (strategic, analytical) vs. transactional (bookkeeping, payroll). - Define Your Finance Strategy
Define long-term goals. Do you want real-time analytics? Better cash-flow visibility? More predictability in forecasting? - Select the Right Outsourcing Partner
Look for providers who align with your vision, provides technology-enabled services, and have strong governance practices. - Pilot and Scale
Start by outsourcing a subset of transactions or repetitive tasks. Once the model proves itself, scale gradually. - Establish Strong Controls
Put in place clear communication cadence, reporting structures, and security protocols. - Invest in Integration
Use cloud tools, dashboards, and consolidated reporting to blend the work of your in-house team and outsourced partner smoothly.
The Bottom Line
A hybrid model of combining outsourced finance with an in-house finance team is not just a trend it’s becoming the new normal. As companies grapple with rising complexity, talent shortages, and cost pressures, this model provides a balance of flexibility, efficiency, and control. Rather than choosing between fully internal or fully external finance, many are realizing that the best move is to integrate both: keeping strategic leadership close, while entrusting execution-heavy tasks to external experts.
By making a thoughtful finance strategy that leverages financial outsourcing where it makes sense, organizations can build resilience, scale, and clarity - all while achieving genuine cost efficiency. The result is a more agile, future-ready finance function that can handle today’s demands and tomorrow’s growth.