Executive Interview: Nicholas Sinclair, President of the Outsourced Accountant

As part of a new series on this blog we will be profiling PayrollHero users to learn more about them, their business, where they go to learn and best practices.

Nick-Sinclair-photoNick Sinclair is the President of the Outsourced Accountant. The company is a BPO in the Philippines that helps accounting firms in Australia and New Zealand improve their client value added services. We spoke to Nick about his experience in the Philippines.

  1. Tell us about your company.

The Outsourced Accountant is dedicated in helping Australian and New Zealand Accounting firms identify their current workflow blockages and employ the right team on a full-time basis to help them become proactive in client value added services. We are a BPO focused solely on this niche and our offering is unique and not like traditional BPO offerings.

  1. How and when did you realise the need for Australian businesses to outsource accounting?

I visited Manila for an Entrepreneurs Organization board conference approximately 3.5 years ago and I went and spent the day with Mike O’Hagan and saw his operation there, as well as a range of other businesses. This then got my mind racing and I then thought how I could flip my accounting and financial planning business to become more efficient and allow my Australian team to actually add value to clients. This then grew into a business when others in my industry saw what we were doing and didn’t want to reinvent the wheel so we started an outsourcing business based on what frustrated us most with the providers we used in Manila. I understand that most accounting firms are buried in paperwork and process-driven tasks, causing them to lose focus on adding value to clients. We want to help these firms get back to client facing work by having an offshore team who can take care of all the compliance and administration work.

  1. Where are you headquartered?

Our office in the Philippines is situated in Clark Freeport Zone, while our headquarters in Australia is located in Queensland.

  1. How many locations do you have in the Philippines? Why did you choose this location versus other locations that are perceived more conventional (i.e: why Clark over Manila)?

Just one inside Philexcel Business Park in Clark.

I prefer Clark over Manila because it’s a lot quieter and less congested environment. A lot of our team members who live within the region have already worked in Manila, since it’s obviously one of the biggest work environments in the Philippines, but they wanted to come home and live with their families. Here in Clark, it’s easier to get to work as people will not be sitting in traffic for hours. We’re very much about work-life balance with our team over here so we want them to spend more time with their families.

Moreover, Clark is accessible to expressways, has its own international airport, and enjoys a variety of amenities and government incentives. We also have a talent pool of close to 8 million people with very little competition (compared to Manilla and other regions).

  1. What was the biggest roadblock to establishing yourself in the Philippines?

The biggest roadblock was the time that I had to spend being in the Philippines, being away from the family and missing out on school events of the kids as I was constantly away.

The biggest roadblock to setting up in the Philippines is the legislation and getting the right advice as it isn’t straight forward and you need to register with multiple departments and each department needs the others approval. There are lots of experts who charge anywhere from $1500 to $10,000 AUD to provide this advice but a lot of the time they dont know what they are talking about. We struggled until we found a local lawyer, who is well connected and has a wealth of experience and endless connections. The other challenge is no one tells you all the things you need to have to even operate, things like Workplace health and safety approval, fire approval, a company nurse when you hit certain levels of staff. There is a lot more involved then get an office, hire some staff and your off.

6.  Was there an unexpected outcome (positive or not) from moving into the Philippines?

The business we now have was an unexpected outcome. We originally did this to service our own firm’s needs, but we have since grown to 180 team members in less than 18 months and I have now sold my accounting and financial planning business to focus on our outsourcing business.
Outsourced Accountant BPO

  1. How do you see this industry changing over the next few years?

I believe the industry is going to go through continued growth, but more BPO’s will start to niche in specific industries rather than be generalist BPO’s as this market is starting to become flooded with new BPO’s.

  1. What were your evaluation criteria before you chose the Philippines? Were there any other countries you were considering?

We had tried outsourcing in India, Vietnam and in Australia (and failed in all). The Philippines wins hands down.

The Philippines has a strong english culture, a strong accounting workforce and an even better number of accounting graduates coming out each year (its one of the main degrees Filipinos complete). The time zone suits perfectly as its only two hours behind for all Eastern states of Australia and the same time zone for Perth.

  1. What do you read to keep yourself up to date with your industry and the clients you are serving?

I don’t get too caught up in the BPO industry information, I focus on what is happening in the accounting industries in Australia and New Zealand. We focus on knowing our client, and talking to them regularly so we can continue to tailor our offering to meet there needs. We aren’t a traditional BPO. We also read a lot of industry information, specifically from industry thought leaders like Rob Nixon.

  1. What advice would you give a businessman moving into the Philippines, that you wish you knew before moving to the country?

It isn’t as easy as some people make it out to be (or it looks to be). I have had so many people say that we have had massive growth and made it look easy, but they don’t see all the work that goes on behind the scenes to deliver what we do. The Philippines isn’t a straight forward place to operate, its very paper based and not technology based which makes it hard. I also would say don’t employ an expat that hasn’t had experience managing a business the size you want to grow to. I have seen many expats that couldn’t manage 50 people in Australia but are managing more than this in the Philippines and failed due to lack of experience. There is plenty of local talent that have significant experience, so look locally (we just hired a gun Country Manager that has over 20 years’ experience managing large operations and he is a gun).

  1. What results that you delivered to your clients are you most proud of? 

The growth of our business is testament that we are on the right track. 60% of our current growth is from existing clients putting more people on. We have plenty of case studies on it working for our clients. The comment we get regularly is our team are world class and pick it up quicker than our clients expect them to.

  1. How has PayrollHero helped streamline your business? 

First of all, it made timekeeping more convenient. It has let us process calculations accurately, and kept us compliant with tax regulations. It also made it easy to manage and generate reports for government statutory benefits since the required forms are already provided and automatically filled.

The big benefit is our leadership team can login to the system, anywhere in the world to see the stats at a quick glance. The system has allowed us to focus on time and attendance and manage this as one of our business’s key strategic goals, and with tardiness being less than 1% late per day and attendance at 98% average for the year to date it is working (compared to the industry average).

  1. How did you run payroll before you found out about PayrollHero?

Before, we used biometrics door access control system for timekeeping, and we did payroll processing with excel spreadsheets. PayrollHero has certainly sped the process up and made it significantly more trackable and accurate.

14. What convinced you to choose PayrollHero over other payroll software     vendors?

The unique TAS (Time, Attendance and Schedule) feature wherein team members have to take selfie photos to clock-in and out plus the good client experience (contact persons are accommodating; quick response time on queries raised) from inquiry to sign-up stage made us decide to go for PayrollHero.

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How To Prepare An Alphalist for the Philippines

This is the first guest post of many to come from Kevin Jay B Umali, a CPA in the Philippines.

hirowallpaper2Wondering how to prepare an alphabetical list (alphalist) of employees to comply with regulatory requirements? Thinking that you fell asleep when this was discussed in school? Well, you are one of the many process owners who ask on how to do it. As common as it may seem, the Bureau of Internal Revenue (BIR) has issued certain guidelines and basic information requirements in preparing a company’s alphalist. Such guidelines are released through BIR Revenue Regulations (RR).

The general guidelines are enumerated in Section 2.83.2 of RR 2-98, as amended by RR 10-08. The portions relevant to creating an alphalist are mentioned in Section (B) quoted hereunder, for your reference.

(B) The alphabetical list of employees must show the following:

(1) Name and TIN of employees;
(2) Gross compensation paid by present and previous employers for the calendar year;
(3) (a) Taxable 13th month pay/other benefits for the rank and file employees; (b)

Taxable fringe benefits for managerial employees;

(4) Non-taxable 13th month pay/other benefits (Present employer);
(5) Non-taxable statutory minimum wage;
(6) Non-taxable holiday pay, overtime pay, night shift differential pay and hazard pay
(minimum wage earners only);
(7) (a) For 2008, Amount of Exemptions (January 1 to July 5, 2008) and Amount of

Exemptions (July 6 to December 31, 2008); (b) For 2009 and thereafter, Amount of Exemptions;

(8) Amount of premium payments on health and/or hospitalization insurance not exceeding P2,400.00, if any;
(9) Tax required to be withheld computed in accordance with Sec. 24 (A) of the Code;
(10) Tax withheld by all present employers for the calendar year; and
(11) Adjustment, if any.

(C) The alphabetical list of employees shall be prepared indicating, among others, separate listings of the following:

(1) Employees Separated/Terminated before December 31 of the taxable year (indicate date of separation/termination);
(2) Employees whose compensation income are exempt from withholding tax BUT subject to income tax;
(3) Employees whose total compensation income are exempt from withholding tax and not subject to income tax (indicate if MWE);
(4) Employees as of December 31 of the taxable year with no previous employment within the year;
(5) Employees as of December 31 of the taxable year with previous employment within the year;
(6) Employees who received Fringe Benefits subjected to Fringe Benefit Tax;
(7) Alien employees subject to withholding tax.

Employers with centralized accounting system, or those mandated to consolidate remittances (e.g. large taxpayers), shall prepare alphalists on a regional basis or per branch office, due to the identification of SMW per region where the employee is assigned, which shall be submitted to the BIR where the head office is located.

In cases where no information was provided by a previous employer, such fact shall be stated in BIR Form No. 1604-CF and the present employer shall not be liable to any penalties.”

We hope that you find the foregoing sufficient for your purpose.

If you are knowledgeable on the topic, you are welcome to put in additional comments and suggestions help improve this article.

Please be guided that this post is intended for general information only and not for the purpose of providing legal and/or professional advice. Contact your attorney to obtain advice with respect to any particular issue or problem. The opinions expressed at or through this post are the opinions of the individual author and may not reflect the opinions of any individual attorney. As the author of this post, I am disclaiming any liability from direct or indirect use of this material.


Are you interested in learning more about PayrollHero’s Philippine payroll software? Give us a call anytime to speak with one of our team about how PayrollHero’s payroll platform can help your business go to the next level.

Doing Business in the Philippines

David-Elefant-PayrollHeroI asked David Elefant to contribute a guest post to our blog about doing business in the Philippines. David owns Dayanan Business Consultancy which assists individuals and foreign companies of all sizes in setting up their business operations in the Philippines.

Doing Business in the Philippines
Guest Post: David Elefant

Why setup a business in the Philippines?

The top reasons are the friendly English speaking low cost labor and the warm weather.

Your employees are your number one asset. In the Philippines you will find employees who are loyal, trainable, warm and caring, have good work ethics and are team players. Take good care of them and they will take good care of the company.

For larger operations there are tax incentives such as a four year exemption from corporate income tax extendable up to eight years, with the option to pay a special 5% tax on gross income in lieu of all national and local taxes after the tax holiday and exemptions from duties and taxes on imported capital equipment.

The Philippines is well situated in South East Asia with just a few hours flight time to 15 countries.

What to expect when setting up in the Philippines

dayanan_horizontal_black_transparentEntrepreneurs have various legal entities to choose from to setup their business. The choice will depend on the kind of business and where your clients are situated. Due to the many restrictions on foreign ownership, export enterprises are the easiest for a foreigner to establish. An export enterprise does not have any limitations on foreign ownership or require a high paid-up capital (Philippines’ regulations impose minimum paid-up capital depending on the nature of the business).

The Philippines bureaucracy has a love affair with paperwork.

Applying for any permit or business registration usually requires multiple copies of every document or permit you obtained at another government office and numerous visits. It can easily take up to two months to obtain all the necessary permits to legally operate a business. After receiving a certificate of incorporation or a license to transact business from the SEC, the next step is to obtain Barangay Clearance and Mayor’s Permit (many steps involved), then off to the Bureau of Internal Revenue followed by registering with the Social Security System, PhilHealth and Home Development Mutual Fund.

It is very important to understand the labor laws to correctly prepare employment contracts and employee handbooks. The courts will rule in favor of the employee on any clause which is not clearly stated.

Those who can do without every single modern amenity can find office space outside of the larger agglomerations and save on rent. Rent in Metro Manila is not cheaper than most North American mid-sized cities. The real savings is on the workforce if you know how to manage them.

Location, location, its important to find an office space that will allow your employees to reach work easily during bad weather especially during the typhoon season. Make you sure your office building has a generator. Other very necessary nearby amenities are restaurants and convenience stores.

Internet is not cheap and a backup connection is a necessity.

In the Philippines, the set up is slow but once everything is in place you will have found the right place to do business.

David Elefant, Consultant

If you have any questions about setting up in the Philippines, feel free to reach out to David.  Let him know PayrollHero sent you.  🙂

How to Pitch Your Story to Journalists in Southeast Asia

I asked Erwin Oliva to write a guest post about how to pitch your story to journalists in Southeast Asia.  Erwin was a pioneering member of the team that established operations of the INQUIRER.net (formerly known as INQ7.net) and Yahoo! Philippines. Erwin is currently a contributing writer for Men’s Health Magazine Philippines, a senior lecturer at the University of the Philippines Diliman and Head of Product Development for Content & Services at Samsung Electronics Philippines Corp.

How to Pitch Your Story to Journalists in Southeast Asia
Guest Post: Erwin Oliva 

Screen shot 2013-08-27 at 6.01.22 PM

One of the things that will help you “market” your startup idea is to get the media’s attention. There are a lot of ways of doing this, but we’ve put together this top 10 things that we feel are practical, and yet effective ways to pitch your story to journos.

1. Give them a unique story that is fit for their audience. Unfortunately, there is no one-size-fits-all kind of a media release. Once you figure out who their audience is, figure out a way to tell your story that would stand out. Online audience usually want video. They also want to experience the service. They also want to know the juicy details –especially for breaking stories. If you’re talking to business journalists–give them numbers, not just facts and let them make their conclusions. If they ask questions, give them enough information to run a story.

2. Be accessible but don’t be pushy. Provide basic contact information: Person of Contact, mobile number, email and of course, your website address. Throw in your Twitter and Facebook account too, just to make sure you got it all covered. But don’t keep calling them to follow up on a request. Most journalists will respect you for respecting their time–not that they want to be divas. Just make sure you reply to their queries even though it is just a “no comment.” 

3. Don’t lie about or manufacture facts you cannot backup. It’s their job to find out if you’re lying to their face. They will know. If they happen to stumble upon leaked information, and cannot make comment, be courteous to answer their call, and explain why you cannot comment. It’s mutual respect–they will also respect you for that. Just don’t lie to them and pretend things will go away.

4. Don’t ignore them too. A simple text message or email reply that, “Yes, we got your message,” would help ease the pain. For startup companies going through a lot of problems, it would be good for you to answer them with questions about how you’re dealing with it. It helps that you know what you’re problems are–but of course, be ready to offer a solution.

5. Show don’t tell. This is a lesson from Steve Jobs who was media-savvy. He made sure when he does product demos, everything’s working well, not just fine. You should be able to eat your own dog food, which means you’re a power user of your own service/product. Journalists could tell if you’re fumbling or if you’re pretending to know what you’re doing.

6. FAQs are very useful. When drafting a media release, anticipate the questions that journos will be asking. So you have to develop a “sixth-sense” to predict what kind of questions they want answered, and how they want it answered. FAQs are very useful not only on websites, but also in releases. You can put in commonly asked questions by users, a bit of history, background of the founders, and your one-sentence business proposition (What is your business all about).

7. Develop good relations with them, always. Don’t disappear after a media conference. Hang out with the journos. Talk to them, but make sure what you say is not going into tomorrow’s news. Just get to know them better and find out what makes them tick. At the end, it is going to be about relationships. Journalists all aim to develop good sources of stories. So if you can, share some industry insights, refer them to other companies you think they can write stories about, or if you’re okay with it–give them some insider information–but not giving away any confidential information or even putting someone or a company in trouble. But they will try to push.

8. Use social media to engage them.  Many journalists today–especially the media savvy ones, are starting to ask questions via Facebook or Twitter. Why? You’re busy and if company policy allows, you can use social media as your “real time” blog or channel to update journalists about the status of a project. Use Instagram or other social networking sites (YouTube) to spread word about the company, activities you wish they covered (community projects), and other stuff that gives them enough information to create a story. Be your own media and PR agency.

9. Learn to talk to journalists. Learn their language. Understand them. Don’t talk down on them. Pretend you’re explaining to non-techies (actually assume that you’re talking to people who don’t have any idea about what you’re doing). So avoid acronyms, skip the geek talk. Go straight to the point. Don’t use corporate talk–or rhetoric to explain simple processes or issues. But don’t overdo this to the point that it can be demeaning. Balance is key.

10. Respect deadlines. Don’t waste their time. Know their deadlines. Know that when they’re calling, it may be urgent. If you promise to reply to a certain email, figure out the timelines. Turnovers are often quick especially for online news mediums. Magazines, TV or radio may have different needs–but they all have deadlines. So be ready with all the information that you think they will need. But don’t go beyond what you want to say. Over sharing may do more harm than help.

So there you go. These are practical advice culled over years of covering technology companies. And we at StartUpMachine feel that it’s about time to share our “trade secrets.” –Erwin