The Finance and Accounting Outsourcing (FAO) market is expected to grow at almost 20 per cent this year, reaching an annual contract volume (ACV) of US$3.7 billion, according to Everest Consulting.

Although new contract signings were lower in 2009 compared to recent years, new FAO spending continued to grow organically through contract extensions, representing almost 40 per cent of 2009 ACV growth.

About 35 percent of all currently active FAO contracts, valued at US$5 billion, are up for renewal during the next three years. Everest expects this cycle of contracts renewal to fuel organic growth going forward as buyers focus on expanding the value they generate from FAO.

“As the global economy continues its path towards recovery, we expect to see the FAO market regain traction, driven by new deals and scope expansions, as well as more than 45 contracts up for extension this year,” said Katrina Menzigian, research VP at Everest. “We foresee increased adoption across industries and geographies to continue. Beyond the United States, we expect contract signings in the domestic Asia-Pacific market as well as Rest of Europe to rise.”

Readers can click here to read an extract of the Finance & Accounting Outsourcing Annual Report 2010.