How a Possible U.S. Recession Could Push Restaurant Businesses to Outsource Accounting Overseas
by Ariane Ramil, Virtual Client Account Director & Director of Development
As economic signals point toward a potential recession in the United States, businesses across industries are preparing to tighten their belts. One of the hardest-hit sectors during economic downturns is the restaurant industry, known for its thin profit margins, high labor costs, and sensitivity to changes in consumer spending. For American restaurant owners, especially those operating small to mid-sized chains, the threat of a recession brings urgent questions: How can we cut costs, stay competitive, and keep the business afloat without sacrificing quality? Increasingly, one answer lies in outsourcing key business functions like accounting to countries like the Philippines.
The Recession Threat and Its Impact on Restaurants
A U.S. recession—characterized by declining GDP, job losses, and reduced consumer spending—could severely affect the restaurant industry. As inflation continues to weigh on household budgets, dining out is one of the first luxuries consumers trim. This decline in traffic can cascade into lower revenues, layoffs, and in worst cases, restaurant closures. Meanwhile, fixed costs such as rent, utilities, and staff wages remain stubbornly high.
To make matters worse, geopolitical tensions and ongoing trade issues have led to increased tariffs on imported goods, including food and packaging materials. These rising costs further eat into margins, prompting restaurant owners to seek innovative ways to stabilize their finances.
The Rise of Strategic Outsourcing
In the face of such economic pressures, outsourcing has emerged as a strategic tool—not just a cost-cutting measure. While outsourcing has long been associated with large corporations, more small and mid-sized businesses are adopting the practice to survive and thrive amid economic headwinds. One of the most attractive outsourcing destinations is the Philippines, thanks to its strong English proficiency, robust BPO (business process outsourcing) infrastructure, and a large pool of finance and accounting professionals.
For restaurants, outsourcing non-customer-facing functions like accounting allows them to lower operational costs while maintaining efficiency and compliance. Services that can be outsourced include:
- Bookkeeping
- Payroll processing
- Accounts receivable and payable
- Financial reporting
- Tax preparation
By leveraging the time zone difference, restaurant operators can have financial reports ready by the time they start their day. Additionally, many Philippine-based firms follow U.S. GAAP standards and employ CPAs trained to work with U.S. clients.
Accounting: The Low-Hanging Fruit
Accounting is often considered a “low-hanging fruit” in outsourcing because it’s a well-defined, rules-based function that can be easily transitioned with the right processes in place. Outsourcing accounting provides several key benefits:
1. Cost Savings: Hiring an in-house accountant or financial controller in the U.S. can cost anywhere from $60,000 to over $100,000 annually, excluding benefits. In contrast, outsourcing to the Philippines can reduce this cost by up to 70%
2. Scalability: As business needs fluctuate, outsourced teams can scale up or down more easily than in-house staff.
3. Access to Expertise: Philippine outsourcing firms often specialize in accounting services and bring a depth of experience across industries.
4. Focus on Core Operations: With accounting taken care of, restaurant owners can redirect their attention to improving customer experience, optimizing menus, or expanding delivery operations.
Beyond Accounting: A Broader Shift
While accounting is a logical starting point, many restaurants are beginning to explore outsourcing other roles as well, including:
- Human resources and recruitment
- Inventory management
- Customer service (via chat, email, or phone)
- Social media management and digital marketing
This shift reflects a broader realization: to stay agile, competitive, and resilient, restaurants must reimagine their organizational structure. By building a hybrid team of onshore and offshore professionals, restaurants can maintain high service levels while controlling costs.
Addressing Concerns and Ensuring Success
Of course, outsourcing isn’t without its challenges. Concerns around data security, quality control, and communication barriers often come up. However, many of these risks can be mitigated by choosing the right outsourcing partner. Look for providers with:
- A proven track record in the restaurant industry
- Strong cybersecurity protocols
- Transparent communication and reporting practices
- The ability to integrate with your existing systems
Clear onboarding processes and defined KPIs (Key Performance Indicators) can further ensure that outsourced teams deliver the expected value.
A Lifeline in Uncertain Times
As the U.S. restaurant industry braces for economic turbulence, outsourcing may offer a much-needed lifeline. By moving back-office functions like accounting to cost-effective destinations such as the Philippines, restaurant businesses can weather the storm, protect jobs at home, and emerge stronger when the economy rebounds.
In uncertain times, agility becomes a key differentiator. Outsourcing provides the flexibility and efficiency that today’s restaurant businesses need—not just to survive a recession, but to build a leaner, more resilient operation for the future.
Final Thoughts
The potential U.S. recession may present one of the biggest challenges to the restaurant industry in recent memory. But with challenge comes opportunity. By strategically outsourcing critical business functions to the Philippines, American restaurants can reduce costs, improve efficiency, and create breathing room to innovate. It’s not just about surviving the downturn—it’s about setting the stage for long-term growth and stability.
To paraphrase a popular saying, tough times don’t last, but tough businesses do. For restaurants willing to adapt, outsourcing could be the key to enduring—and even thriving—through economic uncertainty.