Most Startups, SMEs and MNCs face hardships in keeping and managing their accounting within their company along with their business operations and development. They wish to outsource accounting but couldn't due to some myths and fears.
So we decided to write about it and in this blog, we will walk you through the benefits, myths, some risks, and top service providers for Accounting Outsourcing in India.
What is Accounting Outsourcing?
Hiring an expert from outside the company to help the company in the daily tasks is outsourcing.
Accounting Outsourcing is outsourcing a company's finance and accounting work which includes bookkeeping, managing bank accounts, preparing invoices, analyzing financial data, etc. to an expert accountant.
Why should you Outsource Accounting Services?
- Cost-effective - It saves a lot of your company’s funds that you, otherwise, would spend on employees training, for paying their salaries, buying good accounting software, maintaining office space and infrastructures. Plus, an expert can help you cut a lot of your taxes.
- Buys you time - With more time you can brainstorm your business growth to its potential. Accounting Outsourcing in India buys you time that you can invest in your core business tasks, like vision planning, customer satisfaction etc. while experts are taking care of your yet important work: accounting and compliance.
- No unnecessary hiring - Firstly, it is exhaustive to hire a good accountant who knows data handling and analysis, can prepare all legal papers, and help in reducing taxes, and even if you got one, his/her retention is even more difficult. With Outsourcing your accounting you will never face this problem.
- Affordable Expertise - While outsourcing accounting, you pay for projects and not for a salary. For example, you need a tax expert for only a few months in the year. You can hire him for that period only while continuing to receive accounting services for the whole year. Experts can help you win more cash than they cost you.
- Top-class Automation Software - Mostly the companies that provide Accounting Outsourcing services in India use word-class accounting and bookkeeping automation software which increases their accuracy and decreases the time taken to manage and analyze your accounts.
Different types of software used for Accounting Outsourcing in India:
- QuickBooks
- FreshBooks
- Zoho Books
- Sage
- Vyapar
6 Common Pitfalls in Accounting Outsourcing
Before you go and read all threats, let us confess that none of our clients have ever complained about any of these problems.
- Data Breach - Though it doesn’t happen generally but your private data may get breached due to loose security measures in the agency. Thus, it is advised to trust established agencies that have worked with some big companies.
- Lack of proper communication - Outsourced companies may avoid communications and then fail to deliver the promised quality.
- Late delivery - Some outsourced agencies don't have experts in the team and may fail in timely delivery.
- Hidden costs - Some accounting agencies ask for more cash once the deal is finalized.
- Lack of control - Non-professional agencies sometimes don't give proper access to data to their clients.
- Outdated technology - To cut their expenses, agencies use outdated or free tools that lack quality.
Why is Outsourcing Accounting Services to India prevalent?
In many countries of the world, India is preferred for outsourcing services. Accounting Outsourcing in India is favored because you get these additional benefits here-
- Expertise available under budget - In India you can find subject matter expertise at suitable prices very easily as compared to the US market. Indians are exceptional Accountants as they were taught Indian standards and international accounting rules. Leverage the benefits of a talented and affordable Indian market.
- Expenses cut up to 50% - Indian rupee (INR) as compared to the US dollar holds lower International value. This helps both India and other countries, whose currency holds more value, in Outsourcing business work to Indians. You can cut your expenses to 40% - 60%, with increased proficiency in operations and accuracy in analytics.
- Committed loyalty - Indian market produces a skilled workforce that is dedicated to working and devoted to helping client companies faithfully.
- No communication barrier - English is widely spoken in India and it is the second acceptable language among Indians. This helps Global clients to easily communicate with Indian service providers. Moreover, India lies in the time zone that is aligned with many other countries that further supports the communication with Outsourcing companies in India.
- Supportive Government policies - Indian government understands the importance of the IT industry in the development of the country. Hence it supports the growth of the IT industry which allows Indian companies to deliver their Outsourcing services to the clients globally without any hindrance.
- Competitive Infrastructures - India has preeminent infrastructure that promotes easy connections of India with the globe better data connectivity and cybersecurity measures are making India the first choice of every Global client
- 24/7 access to your accounts - We in India use top-class online accounting softwares so that you can access your data Overseas at any time without any security issues. All your data is saved on the cloud and you can always have access to your account that you can provide to whoever, you want, in your team.
Myths of Outsourcing Accounting in India
Small CPA firms over thinking about Accounting Outsourcing in India fall in the pits of 30 minutes. We have been bashing these myths over the course of 11 years since our Inception.
- Only large companies can be benefited from Accounting Outsourcing - No it is equally beneficial for small businesses as it is for the large ones. Small companies can take advantage of outsourcing services and can entirely focus on company’s operation, marketing and customer satisfaction in the initial phases of development.
- My company's privacy and security will be at stake - Not really, if you outsource accounting to a trusted and well-known company. Well-established companies sign a legal document in which they preserve data rights between both parties. Moreover, well-known Outsourcing companies have a brand image to maintain in the market, so they'll never engage in such corrupt activities.
- Offshoring and Outsourcing are the same - There is a huge difference in it. Outsourcing Accounting is a contract between you and a company or a person to help you with your accounting work whereas offshoring accounting means hiring a team from a different country where they are available at cheaper rates for remote accounting work.
- Long-term partnership is not possible between the client company and outsourced company - This too is false. You can make long-term contracts with outsource accounting firms. It will offer you the ease of mind and help you complete your key business operations. Also a long-term partner is always more involved in your business and values your business and helps you prevent any errors.
- I would need to have a heavy infrastructure to outsource accounting services - Many companies think that they would need a big IT database to communicate data with outsourced firm and that will cost them in gold. But that's not true. There are lots of efficient tools and software available in the market (some are free as well) that will help you set up connections with the outsourced firm.
How much does it cost to outsource accounting in India?
Outsourcing Accounting and bookkeeping services to India would cost a nominal value that ranges from $500 to $2,500 a month depending on work amount and complexity.
Top-Performing Accounting Outsourcing Companies in India
KGMC, Gurugram - Started in 2010, KGMC is a process outsourcing service provider. It helps companies in simplifying their process by handling their finance and accounting with efficiency and accuracy. KGMC has some of the prominent players in their industry, such as AirBnB, Discovery, Emerald Publishing, Rivigo as their clients.They are experts who use the latest technology to help their partner companies in their:
OHI Outsourcing Hub India, New Delhi - OHI has been providing Accounting Outsourcing services to its clients since 2006. It specializes in real estate accounting and property accounting. They have experience in all top accounting softwares like QuickBooks, Zero, MS dynamics.
Finsmart Solutions, Mumbai and Pune - Finsmart solutions, started in 2007, has been serving as an outsourced agency for accounting and payroll management. They work like virtual accountants to help their clients in their daily financial operations.
LetsComply, New Delhi - LetsComply is one of the comprehensive service providers. It delivers its expertise in outsource accounting budgeting and cash forecasting services.
Maxim Liberty INC, Chennai - Maxim Liberty has its expertise in bookkeeping. Their team of 15 employees has been delivering Accounting Outsourcing services since its Inception in 2005.
The Backspace, Mumbai - The Backspace is founded to help startups and SMEs in their financial operations. They are a team of accounting professionals assisting businesses with bookkeeping, invoice preparing, accounts payable, and receivable.
WNS Global Services, Mumbai - WNS Global Services, with a task force of 25000 professionals, has its presence in various countries. They provide flawless process outsourcing services to businesses in various domains.
Topsource Global Solutions, Mumbai - Topsource Global Solutions- India provides outsourcing services in accounting, payroll, and human resources. Started in 2004, with 50 employees now they are serving various small and medium enterprises.
Mindspace Outsourcing Services Pvt. Ltd., Jaipur - Mindspace, founded in 2007, has been providing bookkeeping, tax preparation, and financial processing services to their clients. With a team of 24, they are doing notable work for the advertising, real estate, and IT sector.
Line Accountancy, Banglore - Line accountancy is serving various businesses in their bookkeeping, payroll, and data entry. They have around 5 to 9 employees and are dedicated to working for the health, finance, and construction sector.
How to choose a good Accounting Outsourcing service provider?
Choosing the right outsourcing service provider for your company is very essential. Here are some key tips to consider before you outsource your work to any agency:
- Performance History - See, how well they are serving businesses. Read their case studies and testimonials.
- Services provided - Consider that agency that possesses its expertise in the operation in which you want their help.
- Security agreements - Look for an agency that signs security agreements for data rights between both parties.
- Technologies in hand - Pick the one which uses the latest tools and softwares for accounting. You can openly ask them which accounting softwares do they use.
- Under the budget - Look for the one that comes in your budget. But consider their quality as well.
Hope we’ve covered all your queries and doubts about Accounting Outsourcing in India. Share this blog with your team and partner with an outsourcing company that is suitable for you for handling daily financial processes.
We, at KGMC, have a team of expert professionals that are happily serving SMEs and MNCs in their accounting and compliance for the last 11 years. If you need any advice or help in your financial processing, schedule a free consultation call with one of our experts now.