Companies nowadays are running towards outsourcing as it offers keen benefits. The current competitive environment requires firms to stay up-to-date and relevant. Efficiency has become highly significant, with every firm enhancing speed, minimizing costs, and maintaining excellent work output quality. Although in-house accounting can offer these benefits, it becomes challenging for small and mid-sized businesses to enjoy cost-effectiveness and time savings. However, outsourcing tedious tasks like accounting to accounting services providers frees internal resources and allows companies to enhance cost-efficiency. They can use their resources judiciously and make the most out of them. However, deciding whether to outsource is tricky, especially with the numerous options available to firms.
Every alternative comes with its pros and cons. Firms can outsource accounting and bookkeeping to a local firm, nearshore vendors, or offshore parties. While businesses get a thorough background check over local companies, offshoring allows for cost savings and expert services. The nearshore vendors may have the necessary expertise but may charge highly. Thus, firms must ponder this dilemma and find practical solutions to meet their needs.
Out of these options, outsourcing accounting services across geographical boundaries (offshoring) is becoming increasingly common. The most popular country to outsource these services to is India. It makes one wonder why businesses are choosing India as a preferred accounting outsourcing destination for the following services:
- Accounts receivable/ Accounts payable
- Financial statements drafting
- Bank statements generation
- Controller services
- Registering company formation
- Financial planning and analyses
- Financial, cost, and management accounting
- Fraud and forensic accounting
- Reporting and filing taxes
- Processing payroll
- Maintaining general ledger
Since US companies are highly getting engrossed in outsourcing accounting services to India, let us know the reasons behind this consideration:
- Best legislative support: Working with an in-house accounting team requires numerous efforts. However, tax procedures and legal obligations can complicate the system. The Indian agencies can handle these services on the firm’s behalf. Their staff stays up-to-date with the US and UK GAAP, IRS compliance, etc., and they also keep in touch with the Internal Financial Reporting Standards valuation.
- Workforce skills: Unlike developed countries, India is a developing country providing cheap labour. However, these costs do not affect the work quality as their skills cross cost barriers. The Indian educational system is the third-largest publicly funded system and has the highest literacy rate. Young talent in India is immense, and the CA and CPA firms offer them attractive opportunities.These professionals stay punctual and achieve their targets on time. Various professional accountancy institutes provide specialization courses to Indian talent. The accounting sector gets more heads, and clients get served with better quality accounting services. The accounting curriculum and tests in India support both Indian and international rules, making the difficulty level pretty high.
- Innovative infrastructure and IT: India’s IT and software development industry is booming. It makes it the top-preferred outsourcing destination in the world. The accounting firms in India have the latest and most advanced accounting software, internet services, and security solutions. It allows them to fulfil the accounting services needs quickly and accurately. They can flawlessly implement remote accounting because their technical infrastructure is the best. Moreover, IT geniuses execute technical functions seamlessly.
- Language barriers and proficiency: Unlike other developing countries, India hosts the largest proficient English-speaking population, allowing businesses to excel in diverse industries. No language barriers will ensure hassle-free accounting services with clear communication and business process understanding without any issues. Even the accounting software, tools, and technology are available in English, allowing these professionals to work seamlessly.
- Fewer costs: Outsourcing accounting to India significantly impacts labor and operational costs. Developed countries bear high living costs, running expenses, etc. when they conduct accounting in-house. However, outsourcing these services to India reduces these charges to the firm. Thus, businesses enjoy high calibre, professional, skilled, and advanced services at affordable rates. The high dollar rate for Indian currency also plays a prominent role in determining cheapness.
- Flexible staffing and enhanced scalability: Outsourcing accounting services essentially means hiring a remote team to work flexibly from distant locations. Thus, outsourcing is the most effective option when a business wants to expand its processes and adapt to growing accounting needs. Making changes to accommodate growing requirements in-house can be challenging. However, abundant talent at lower costs allows businesses to be upscale and downscale in a very short turnaround time. For instance, a firm can begin with outsourcing payroll services and increase the scope as the needs grow.
- Benefits of differences in time zones: The difference in country time zones allows US and UK businesses to enjoy. CPA firms offer high-speed services to their clients without hiring an additional task force. For instance, firms can make a request in the evening and get the work done by morning. Thus, while the business owners were sleeping, Indian professionals were working to yield results.
- A rise in productivity: Businesses outsourcing accounting services to India benefit from the rise in productivity. Since a remote third party offers expedited and efficient services, firms can make informed decisions. Moreover, the free internal resources can focus on the core operations, enhancing operational effectiveness.
Outsourcing accounting services to India offer businesses multiple benefits they cannot find anywhere else. Offshoring decisions are critical and require firms to think deeply. Although many outsourcing options are available to companies, preferring India over others has some tell-tale benefits. No language barriers, advanced technical support, fluency in English, and advanced IT and technical support are a few benefits of the basket.
Companies outsourcing to India must stay stress-free with the vast talent pool available at low prices. Favourable accounting regulations are a cherry on top. India’s unique element allows effective communication across diverse cultures and exchanges. Despite being a developing economy, the rapid growth in business outsourcing leads firms to believe its reality. The professionalism in India elevates the firms and scales them to the next level. Accounting, advisory, payroll, and other services in a basket can be outsourced to Indian companies for enhanced efficiency and optimization.