Understanding what outsourcing costs are is not only a technical accounting and financial requirement but also a strategic management tool that helps businesses save costs, avoid risks and make better decisions.
The following article by Bizzi will provide full information related to outsourcing costs as well as how to accurately account for outsourcing costs.
What are the costs of outsourcing services?
Definition of outsourced service costs
Chi phí dịch vụ mua ngoài là gì? Đó là những khoản chi phí doanh nghiệp phải trả cho bên thứ ba (không phải nhân viên nội bộ) để thực hiện các công việc hoặc cung cấp dịch vụ phục vụ hoạt động kinh doanh. Đây là một phần quan trọng trong chi phí hoạt động, đặc biệt trong các lĩnh vực cần thuê dịch vụ chuyên môn như vận chuyển, quảng cáo, bảo trì, tư vấn, bảo vệ,…
The nature of outsourced service costs
- Expenses incurred to receive completed service: Not buying goods or tangible assets, but buying the result of performing a service.
For example: hiring a video production crew → the business does not own the filming crew, only owns the finished video. - Engage with third parties: Là các đối tượng không thuộc biên chế công ty (agency, freelancer, công ty dịch vụ…).
- Usually arises under contract or agreement: Can be under long-term contract or on a per-occurrence basis, usually with VAT invoice attached to account for reasonable costs.
- No fixed assets or long-term prepaid expenses (with some exceptions): Once the service is finished, it is an end cost and has no long-term value.
What are the identifying characteristics of outsourced service costs?
| Criteria | Identification mark |
| Supplier | Is an individual/organization outside the business |
| Type of cost | Liên quan đến lao động, kỹ năng, chuyên môn, kỹ thuật, quảng bá,… không do nội bộ thực hiện |
| Not reusable | The service expires once used and cannot be repeated unless payment is made again. |
| Have invoices and service documents | Hóa đơn GTGT, hợp đồng dịch vụ, biên bản nghiệm thu… |
| Does not create assets | Does not increase the value of the company's assets |
| No direct pay | Not the cost of salaries and allowances for internal employees |
Classification of outsourcing service costs in enterprises
Outsourcing service costs are often divided into the following main groups:
Manufacturing/Operations Outsourcing Services:
- Hire product processing, semi-finished products
- Hire design, print packaging, labels
- Freight forwarding, logistics
Administrative support services:
- Hire accounting and auditing services
- Security, cleaning, IT services
- Human resource training and legal consulting services
Advertising and communication services:
- Cost of hiring marketing agency, KOLs
- Cost of producing promotional videos
- Dịch vụ chạy quảng cáo Google, Facebook…
Maintenance and technical services:
- Repair of machinery and equipment
- Maintenance of software systems and electrical equipment
Common Outsourced Service Charges
Understanding common outsourcing costs is a crucial element of corporate financial management. It not only helps to better control expenses, but also contributes to improving budget efficiency, making accurate decisions and ensuring compliance with legal regulations.
Here are some of the most common types of outsourced service costs:
- Office rental costs
- Electricity, water, internet and telecommunications costs
- Shipping and logistics costs
- Consulting and professional services fees
- Maintenance, repair and servicing costs
- Advertising, marketing and communication costs
- Cost of training and human resource development
Distinguishing the cost of outsourced services in the enterprise
Distinguishing the cost of outsourced services in a business is extremely necessary because it helps ensure that the business manages its finances transparently and in accordance with regulations, and at the same time makes more effective decisions in operations and strategies. Below is how to distinguish the cost of outsourced services in a business from other types of costs based on characteristics:
| Cost Type | Characteristic | How is this different from the cost of outsourced services? |
| Cost of raw materials | Cost to purchase raw materials for production | Is the cost of purchasing "material", while outsourced services are the cost of services |
| Labor costs | Paying salaries to employees in the business | Internal human resources, while outsourcing services are hired from outside. |
| Fixed asset depreciation costs | Cost of allocating assets such as machinery and buildings over time | Attached to business assets, not services |
| Financial costs | Lãi vay, chi phí đầu tư tài chính, chênh lệch tỷ giá… | Not related to production and operation service rental activities |
| Selling and administrative expenses | Including the cost of outsourced services | Outsourcing services are part of this group. |
How are outsourced service costs accounted for in accounting?
Managing outsourced service costs in accounting is an important part to ensure transparent, reasonable and tax-compliant business financial activities. Below are instructions on managing and accounting for outsourced service costs according to Vietnamese accounting circulars (Circular 200/2014/TT-BTC or Circular 133/2016/TT-BTC depending on the type of business).
- Valid documents required
In order for the cost of outsourced services to be included in reasonable expenses when calculating corporate income tax, it is necessary to have:
| Document | Request |
| Service contract | Agree clearly on content, value and implementation time |
| Financial invoice | VAT invoice or sales invoice from service provider |
| Acceptance report | Clearly state the work completed |
| Payment documents | If over 20 million VND, no cash required |
- Classify costs for the right purpose
Based on the purpose of using the service to classify:
| Intended use | Outsourced service costs are accounted for in the account. |
| Production service | Account 627 – General manufacturing costs |
| Sales service | Account 641 – Cost of sales |
| Serving business management | Account 642 – Enterprise management costs |
| Outsource investment services | Record into Long-term unfinished assets (Account 241) if conditions for forming fixed assets are met. |
Outsourcing cost optimization strategy
Optimizing the cost of outsourced services is an important strategy for businesses to reduce operating costs without affecting service quality or work performance. Below are effective and practical optimization strategies that are easy to apply for both large and medium-sized businesses.
Periodically evaluate outsourcing effectiveness
- Compare outsourcing costs and output efficiency.
- If outsourcing costs are high but quality is poor → consider changing suppliers or switching to in-house.
- Thiết lập KPIs rõ ràng cho từng nhà cung cấp dịch vụ để theo dõi hiệu suất (VD: lượt tiếp cận, đơn hàng, thời gian xử lý…)
Compare quotes – bid for services
- Before each new rental, it is advisable to get at least 2–3 quotes from different suppliers to create competitive pressure.
- Internal bidding can be organized for high-value services such as advertising, design, content production.
Sign a long term or package contract for better price
- Với các dịch vụ sử dụng thường xuyên như bảo trì, agency marketing, thiết kế,… cân nhắc thương lượng gói tháng, quý, năm thay vì thanh toán lẻ từng lần.
- Prioritize lump sum contracts to control costs more easily (avoid unexpected expenses).
Negotiate payment terms and reduce hidden costs
- Negotiate delayed payments (30-45 days) to improve cash flow.
- Check the contract carefully to avoid unclear additional fees such as maintenance fees, additional consulting fees, tax differential fees, etc.
Automate and internalize where appropriate
- Với các dịch vụ có thể làm nội bộ (content, thiết kế, chạy ads cơ bản…) thì nên xây dựng đội ngũ in-house để giảm chi phí dài hạn.
- Hoặc đầu tư vào công cụ/AI để thay thế dịch vụ tốn chi phí thuê ngoài (ví dụ: Canva, ChatGPT, phần mềm email marketing…).
Reuse of assets or service content
- For example: identity design service → can reuse layout and template for many different campaigns.
- Video production service → retain original footage to recreate another version, no need to start over.
Application of tools to support management of outsourced service costs
Applying tools to support the management of outsourced service costs is an essential step in the process of improving operational efficiency and controlling corporate finances, especially in the context of outsourcing costs increasingly accounting for a large proportion of total operating costs.
| Tools | Uses |
| Google Sheets/Excel | Track outsourcing costs by department and project |
| Bizzi Expense Management Software | Control costs strictly according to policies and budget
Complete and valid invoices and documents Prepare budgets by department, project and spending category Warning when costs and payment requests do not/do exceed the budget Display quick reports of spending information, updates on estimated spending - actual spending in focus Dashboard for intuitive, multi-dimensional cost management in real time across multiple platforms |
| Trello/Notion/ClickUp | Manage outsourced work in progress, control output results |
| KPI Tracker | Link outsourcing costs to performance to evaluate spending efficiency |
Outsourcing service cost management solution with Bizzi
Bizzi Expense is one of the leading cost management software solutions, trusted by large enterprises such as Masan Group, Mondelez International, Pierre Fabre,... thanks to its superior automation power and integration capabilities. Modern expense management solution – Bizzi Expense helps businesses closely control outsourcing costs and other types of spending in an automated, transparent and controlled way.
Outsourcing Cost Management Process with Bizzi Expense
Below are the operations performed on Bizzi Expense cost management software:
Step 1: Create a service cost request
- Employees or departments in need of services (e.g. machine maintenance, IT outsourcing, marketing agency hiring...) submit payment requests on Bizzi Expense.
- Please specify:
– Service Name
– Danh mục chi tiêu
– Intended use
– Estimated budget
– Attached documents/contracts (if any)
Step 2: Approve expenses by level
- The request is sent to the approval authority, according to the established authorization scheme:
– Cấp trưởng phòng
– Cấp tài chính/kế toán
– Cấp giám đốc (nếu vượt hạn mức)
- Quick approval possible via app or web.
Step 3: Order service and record cost
- After approval, the person in charge proceeds. buy service from supplier.
- Invoices/receipts are sent to the email address on the app of the person in charge. Once the invoice is in the system and available on the app, Bizzi Expense automatically:
– Quét & kiểm tra thông tin tính hợp lệ của hóa đơn
– Gắn chi phí vào đúng yêu cầu chi tiêu đã tạo trước đó
Step 4: Track costs & budgets in real time
- Expenses are recorded and deducted from the approved budget.
- Display system:
– Tổng ngân sách – đã sử dụng – còn lại
– Cảnh báo nếu vượt mức phê duyệt
Step 5: Automatic accounting & synchronization with accounting software
- Expenses are automated:
– Gán mã hạch toán
– Đồng bộ với phần mềm kế toán (SAP, MISA, Fast, Bravo…)
- Minimize data entry time and limit errors.
Step 6: Summary report & cost analysis
- The system automatically generates reports:
– Theo loại dịch vụ, nhà cung cấp, phòng ban
– So sánh thực tế vs. ngân sách
– Phân tích xu hướng sử dụng dịch vụ để tối ưu hợp đồng tương lai
Outstanding features of Bizzi in managing outsourced service costs
Bizzi is the “smart financial assistant” for modern businesses, helping to control maximum spending, increase operational efficiency and optimize cash flow – especially necessary in an economic context that requires flexibility, transparency and prudence. Here are some outstanding features of Bizzi:
Set up a budget according to your business structure
- Allocate budget by department, project, expense type (outsourced services, stationery, business expenses, etc.)
- Easily set budget limits and update throughout the fiscal year.
- Giúp từng bộ phận chủ động kiểm soát chi tiêu mà không bị “xé rào”.
Automatic real-time budget overrun warnings
- Khi nhân viên lập đề nghị thanh toán, hệ thống: So sánh với ngân sách còn lại – Cảnh báo nếu vượt ngưỡng – Có thể thiết lập chế độ: không cho nộp hoặc yêu cầu duyệt thêm từ cấp cao hơn
- Helps reduce unplanned or duplicate spending.
Control documents - invoices are complete and valid
- Nhân viên upload hóa đơn tài chính, hợp đồng, biên bản nghiệm thu,… vào từng đề nghị chi.
- The system checks the validity according to accounting and tax regulations.
- Easy to retrieve and compare later → reduce risks during audits or tax settlements.
Real-time and cross-platform management
- Intuitive dashboard, updates estimated expenditure - actual expenditure - remaining budget by category and department.
- Accessible via mobile, tablet, computer, very convenient for middle/senior managers who need quick approval.
- Clear delegation of authority, flexible and transparent online spending approval.
Smart reports, quick export when needed
- Summary or detailed report by each criterion: By project, By cost type, By implementing unit
- Easily export Excel and PDF files for management, financial explanation, or presentation to the Board of Directors.
In the context of economic instability, businesses need more flexible, transparent and effective financial management tools than ever. Bizzi does not stop at the integrated corporate card solution for expense management, but also pioneers the application of RPA, Machine Learning and AI technology to automate the entire invoice processing and budget management process.
New trends in outsourcing service cost management
Outsourcing cost management is undergoing a major transformation thanks to technology and changing supplier partnerships. Businesses are no longer focused solely on cutting costs, but on optimizing operational efficiency and building long-term strategic partnerships. Here are some of the trends:
Digital Transformation & Automation
Các doanh nghiệp đang dần loại bỏ quy trình giấy tờ, Excel thủ công… và ưu tiên triển khai phần mềm quản lý chi phí với các tính năng như OCR, AI, quy trình phê duyệt tự động… nhằm thay thế bảng tính thủ công. Điều này không chỉ giúp kiểm soát chi tiêu minh bạch hơn mà còn giảm đáng kể thời gian xử lý và rủi ro sai sót trong kế toán.
On-demand Services
Instead of signing long-term fixed contracts, many companies turn to flexible outsourcing according to actual needs at each time. This model helps businesses save operating costs, easily change suppliers when needed and optimize service performance.
Outsourcing under strategic partnership model
Service providers are no longer simply “third parties” but rather an extension of the business. This partnership often comes with shared KPIs, long-term commitment, and proactive optimization of efficiency, sharing mutual benefits.
Challenges in managing outsourced service costs
Along with the opportunities, businesses also face a host of challenges when managing outsourcing costs – from cost volatility to quality and security risks. Without the right management tools and processes, these “hidden” costs can have a major impact on cash flow and business performance. Challenges in managing outsourcing costs include:
Price Fluctuations and Inflation
Service costs, especially in logistics, transportation or technology, can increase rapidly due to market, raw material or exchange rate impacts. This makes budgeting and cost control difficult.
Service quality assurance
Choosing the right supplier is a difficult task. Low price does not mean good quality. Many businesses face the situation of “losing both money and health” because they do not evaluate capacity carefully or do not have clear evaluation criteria from the beginning.
Information Security
Sharing internal data with third parties always carries the risk of information leakage. Without strict security policies and tight contracts, businesses can easily fall into crisis.
Disjointed Supplier Management
Many businesses still manage suppliers using emails and individual Excel files, without a consolidated system. This causes information to be fragmented, making it difficult to access spending history, contracts, or evaluate the effectiveness of each partner.
Solutions to overcome challenges with technology
To solve the above problems, businesses need to apply technology such as AI, big data analysis, blockchain and cost management software. These tools help make the outsourcing process transparent, while improving decision-making efficiency and controlling financial risks. Some solutions businesses can refer to:
AI Applications & Big Data Analytics
AI can help businesses analyze spending history, compare unit prices between suppliers, and forecast service price trends. At the same time, big data analysis tools support performance evaluation and warn of cost anomalies.
Automate management processes
From service proposals, approvals, contracts to payments, everything can be digitized and automated on one platform. Modern systems like Bizzi Expense also integrate AI to check invoices and warn of over-budgets – helping businesses save time and control risks.
Blockchain in contract management
Blockchain technology is being used in contract management to ensure transparency, tamper resistance, and easy traceability of transaction history. This increases trust in long-term cooperation with strategic service providers.
Frequently asked questions about outsourcing costs
Here are some questions related to outsourcing costs:
Are outsourced service costs included in reasonable expenses for corporate income tax deduction?
- Yes, if there is a valid contract, financial invoice or payment via bank for amounts over 20 million VND
Is a contract required for each outsourced service?
- For high-value, long-term or periodic services → There should be a clear contract. For small, short-term services, orders, quotations and acceptance reports with invoices can be sufficient for accounting purposes.
How to control outsourcing costs effectively?
- Make clear budgets for each department/project
- Approve expenses according to the process
- Require full documents and invoices
- Use tools like Bizzi Expense to monitor, warn of budget overruns, check validity
Conclude
Optimizing the cost of outsourced services is not about cutting back haphazardly, but about smart and proactive management. Businesses need to have a flexible combination of measuring efficiency, smart negotiation and strategic planning to master long-term services. Hopefully, the above article by Bizzi will help you better visualize what the cost of outsourced services is, how to manage and optimize costs for businesses.
Sign up for a trial now to experience Bizzi Expense and modernize your business's expense management process:
- Link to register for a trial of Bizzi products: https://bizzi.vn/dang-ky-dung-thu/
- Schedule a demo: https://bizzi.vn/dat-lich-demo/