Finance and Accounting Outsourcing (FAO) State of the Market 2024: How are Small and Mid-Market Organizations Driving the Next Wave in FAO?

The Finance and Accounting Outsourcing (FAO) market is poised for significant growth due to increased outsourcing from first-generation adopters, particularly in the small and mid-market segments. These organizations are struggling with weak cash disposition, cost pressures, and the need for efficiency improvements. Small organizations are primarily cost-focused, while mid-market organizations prioritize efficiency and value-added capabilities, prompting them to embrace Finance and Accounting (F&A) outsourcing. This segment’s growth is further fueled by the emergence of high-growth niche industries, including PE firms, which present unique outsourcing drivers. Small and large F&A providers are capitalizing on this opportunity by building tailored capabilities to meet the segment’s demands. They are differentiating themselves by offering contractual flexibility, bundled IT-F&A solutions, and verticalized F&A offerings.

In this report, we explore the rise of small and mid-market organizations in FAO and F&A providers’ evolving strategies. The report provides comprehensive coverage of the FAO market during 2023-24, analyzing regional nuances, buyer adoption trends, growth drivers, and the growth of the small and mid-market segments in FAO.