37 Steps to Successfully Set up Your Accountancy Offshoring Firm in India

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As technology evolves and recruitment of accounting professionals becomes more difficult, the options available to accountancy firms is shrinking to hire suitable team members.

One option is to use an outsourcing or offshoring firm overseas in places like India and The Philippines, but another alternative is to actually set up your own offshore base in one of those countries.

This short guide highlights the key aspects you need to consider if you are going to go it alone and set up your own offshore facility for your accountancy firm.

This is based on my experience of setting up our full owned operation in India. It’s no mean feat, but it is achievable if you have the drive, desire, and foresight, as personally I feel over the next 20 years much of the accounting resourcing across the globe will come from countries like India.

Technology, a smart driven English-speaking workforce and lower cost base are key drivers for the growth of offshoring.

Why Offshore to India?

Setting up an accountancy offshoring operation in India involves a comprehensive series of steps that cover legal, operational, and logistical aspects.

If you’re considering the move of offshoring your accounting services to one of the world’s leading outsourcing/offshoring destinations, you’re on the right path. India offers a wealth of opportunities for businesses seeking cost-effective, skilled labour and a favourable business environment. Keep in mind that regulations and requirements may change, so consulting with legal and business experts is crucial.

The 37 Most Important Steps to Offshoring

In this ultimate guide, we walk you through 37 most important steps to navigate the process for establishing an accountancy offshoring operation in India. So, let’s get started!

Strategic Planning

  1. Outsource or Offshore?: Often confused, but they do differ. Outsource usually means using a third-party firm to do the work for you. Offshoring increasingly means building your own team who work for you directly. It’s important to clearly articulate your long-term goals, vision, and specific objectives for establishing an accountancy offshoring operation in India. Consider factors like cost reduction, service expansion, or tapping into India’s skilled workforce. All of these will play a significant part in your decision -making process. Whilst using a third-party firm maybe quicker and less hassle, you are ultimately not in control of your costs or team.

    Why Should Accountants Outsource their Accounts?
  2. Determine the Scope of Services: Decide which aspects of your accounting functions will be outsourced or offshored to India. It could include bookkeeping, tax preparation, audit, or a combination of these. You may plan initially to start with offshoring some basic administration work and book-keeping, and when you have a larger team, you could add further services to offshore
  3. Conduct Market Research: Increasingly, many firms offer offshoring as a service to their clients. So, carry out a deep dive into the accounting services market in your target region. Analyze the demand for various services, pricing trends, and potential competitors. It’s always good to know what the competition are doing, and perhaps get some fresh ideas.

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Who do I hire?

  1. Begin with Who: Once you are clear on what services you will be offshoring, the next question is who will I hire? At this stage, it’s imperative to write job descriptions to enable you start the recruitment process.
  2. How much should you be paying: Salaries in India are considerably lower than in the UK but do some research and find out what is the going rate. There will be some applicants that would like to pull the wool over your eyes and ask for an outrageous amount, which to the untrained eye, will be ok for western salary levels, but at the extreme for actual market rates. So be careful here.
  3. The first hire: Your first hire is critical as they will be the backbone of the team in India. They will certainly need experience in offshoring already, at least for 10+ years but then have an entrepreneurial spirit to get things done in India. As getting things done in India, is rarely straightforward.
  4. Where to find resource? In a connected world, there are so many options available to find resource. In India, you can advertise on job portals or LinkedIn, and I can guarantee you will get many applications – remember there are 1.5 billion people in India, with the vast majority under 35, all keen to find their next job!
  5. Remote video interviews: It’s hard enough to hire someone in a face-to-face interview in the UK. Now consider you are trying to hire someone abroad in a foreign country over a dodgy video call. Many people in India live in large extended families, so sometimes there can be some background noise, such as car horns, bells ringing and the like, so expect this as part of the interview process.
  6. Interview as many people as possible: I must stress you must interview many candidates, this way you can get a good feel of the quality available. Some will be great, others perhaps not suitable.
  7. Communication Skills are key: When working with a remote team, communication is key. Therefore, make this one of your priorities, when interviewing. Do they speak well? What’s their written English like? Would they be able to communicate with clients directly if required, or would you be worried if they did?
  8. Test their technical knowledge: People always tell a good story, but ultimately it’s about whether they can do the job. So, you must test them, no test, or if they fail to complete the test in the available time, it’s probably a good to pass on the candidate. Remember there are many others that are seeking opportunities too.
  9. Your First Hire Profile: As I mentioned previously getting this right is critical, as it will be this person that will assist you with hiring future candidates. They may have a network they can tap into, but more importantly understand the business formalities to setting up correctly in India.
  10. Your next hires: Your first hire will be instrumental in testing and interviewing subsequent team members. You will need to scale relatively swiftly and build a team that is supportive of each other, but your first hire will be key for this process.

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Did You Know?

  • The global accounting offshoring market is expected to reach $135 billion by 2026? (Source: Statista
  • India is the leading destination for accounting offshoring, accounting for over 50% of the global market? (Source: Nasscom
  • The average cost of hiring an accountant in India is 60-70% lower than in the United States or the United Kingdom? (Source: Clutch
  • India has a large pool of skilled accounting professionals, with over 1 million accountants working in the country? (Source: ICAI
  • Accounting offshoring can help businesses reduce costs, improve efficiency, and gain access to a wider pool of talent? (Source: Deloitte

What about the practical aspects of running a business in India?

  1. Company formation: Get ready, this is a minefield and fraught with issues. Whilst we can set up a company in a day in the UK, this can take months in India, so if you do hire people initially in your team in India, expect to be paying them directly from the UK. You will need to ensure they are happy with this – some will be, others won’t be. But I guess that goes back to who you hire in the first place, and how you manage expectations. You can read our 10 step guide on incorporating a company in India, but would strongly recommend you seek professional help too.
  2. Taxes : Again seek professional help, but your first hire should have the necessary contacts to help you get this done properly. Gain a comprehensive understanding of India’s tax structure, including income tax, GST, and other applicable taxes. Be aware of the tax rates and exemptions that pertain to your business. Also obtain a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN). These identification numbers are essential for tax compliance in India. Ensure you apply for and obtain these promptly
  3. Banking : Once you have figured out the company formation, you will need to get a bank account set up. Again, not as easy as one hopes, but stick with the international banks as this usually makes things easier for communication.

Infrastructure and Operational Requirements

  1. Remote working or office working: We took the initial decision for the first phase to have our team work remotely, occasionally meeting in hired offices. Once we had a core team, we then found a suitable office in a central location so team members could come and work on a hybrid basis.
  2. Infrastructure and Location: Choose an office location that is accessible to talent and cost-effective. Factors to consider include proximity to universities for talent acquisition, transportation links, and rental costs. These can vary greatly, but you want to have something that the team will be excited to visit regularly.
  3. Office Setup: Furnish your office space with the necessary equipment, furniture, and facilities that support a productive work environment to ensure the team want to come to the office, as for many of the team they may want to meet with colleagues and build solid relationships with the team.
  4. Operational Setup: Develop comprehensive Standard Operating Procedures (SOPs) that detail how accounting tasks will be executed. Establish workflows that specify the flow of work between the onshore and offshore teams. Set up clear communication protocols with the parent company to maintain a seamless workflow. These are a moving beast and will only improve as your team start to use them. If changes are made its important to keep these updated.
  5. HR and Recruitment: You will need to ensure you comply with any local employment rules. This means seeking legal help, but there are also suitable HR advisors that can assist with this, including employment contracts. It’s important to create a strategic hiring plan that outlines the roles and responsibilities needed for your offshore team, including accountants, auditors, managers, and support staff.
  6. Advertise Job Openings and Conduct Interviews: Promote job openings effectively to attract the right talent. Conduct rigorous interviews to assess candidates’ knowledge of Indian accounting laws and their suitability for the roles.
  7. Pilot Phase: Begin operations with a small team to test workflows and gather feedback. Use this phase to identify and resolve any operational bottlenecks.
  8. Employee Onboarding: Develop detailed employment contracts using any relevant support that align with Indian labour laws to establish a legally sound employment framework.
  9. Provide Employee Training: Induct new employees efficiently into your company culture. Provide comprehensive training on software tools and accounting processes, and establish a culture of continuous learning. Record this training and when a new hire joins, share it with them, it will be a quick way to learn.
  10. IT and Technology Setup: Invest in robust IT infrastructure, including hardware and software, to support your accounting operations. Ensure stringent data security and cybersecurity protocols are in place to protect sensitive client information. You will need your UK and Indian IT partners to support you in developing this, so you comply with all the necessary data protection standards.
  11. Ensure secure data handling and cybersecurity protocols: Protecting sensitive client information is paramount in the accountancy offshoring business. Establish robust cybersecurity protocols, including data encryption, access controls, and regular security audits. These measures safeguard client data from breaches and instill trust in your services.
  12. Define Communication Channels: Establish efficient communication channels between your offshore and onshore teams. Effective communication is vital for seamless collaboration. Using the latest in video calling software such as MS teams or Zoom is imperative to ensure communication is occurring regularly.
  13. Data Security and Confidentiality: Implement strict data security measures to safeguard client information. Establish protocols for handling confidential data.
  14. Develop a Data Breach Response Plan: Prepare for potential data breaches by creating a comprehensive response plan. This ensures swift and effective action in case of a security incident.

Building a motivated strong team

  1. Cultural Sensitivity Training: Provide cultural sensitivity training to your offshore team. Understanding and respecting cultural differences is essential for effective teamwork. This is so important, so the international teams work well together
  2. Transition Plan: Develop a comprehensive transition plan that outlines how work will be shifted from the onshore team to the offshore team. Ensure a seamless handover of responsibilities and overcommunicate the process if required.
  3. Quality Control: Implement rigorous quality control processes to review the accuracy and compliance of accounting tasks. This guarantees that client expectations are met consistently.
  4. Scalability Plan: Design a scalable plan that allows your operations to expand as your client base grows. Ensure your infrastructure and workforce can adapt to increased demand.
  5. Performance Reviews: Establish a system for regular performance reviews of your offshore team. Constructive feedback helps employees grow and align with company goals.
  6. Continuous Training: Offer ongoing training to keep your offshore team updated with industry trends, software updates, and changes in accounting laws.
  7. Organise social events: Get the team together as often as possible, especially if they are working remotely. Get them to meet and have some fun, so they feel they are part of something special and build a great relationship with their team members..

This is a bit of a brain dump on my initial foray into Setting up an accountancy offshoring operation in India.

Arun Mehra

Expert Opinion

“This is my brain dump of how to set up your own accountancy offshoring in 37 steps. Truth be told there are so many more than 37 but I had a target number in mind. Now we set up our own facility, and boy has it made a massive difference. Was it easy? Not really, but nothing worth doing is ever easy as they say! Follow the steps outlined if you want to set up your own facility (we can help) but if you think that is a bit too much for you, get in touch we can support you with all your offshoring needs!”

Arun Mehra FCA
Samera Group CEO

As you can see this is a complex endeavor that requires careful planning, execution, and ongoing management. Each step mentioned above plays a crucial role in ensuring the success of your offshore operation. Remember to consult with legal, financial, and business experts to tailor these steps to your specific situation and to navigate the dynamic regulatory landscape.

Alternatively, if you feel this maybe just little too much work for you, get in touch with us, we would be delighted to discuss your needs and see if we can help you build your accountancy firm.

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Arun Mehra

With over twenty years of commercial experience and knowledge Arun’s expertise is valued by hundreds of businesses across the UK. His financial acumen and know-how, along with his hands-on commercial expertise have helped clients, large and small, new and established to achieve great things.

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