In today’s age of widespread digitization, outsourcing business processes has emerged as a simple and economical strategy for organisations. One process that has seen increased outsourcing uptake is accounting. Medium and small businesses from developed nations, such as the UK, US, and Canada, prefer outsourcing their accounting function to developing nations like India, delegating accounting chores to a third-party outsourcing company, which takes care of accounting management and bookkeeping for their clients.
The key benefit of outsourcing accounts to India is the significant saving or cost advantage that organisations get. This is enabled by more affordable professionals available in India, faster work cycles due to automation, at-source tech support owing to India being the world’s IT hub, and a reduction in redundant costs that an in-house team would invariably impose. All these benefits combined can reduce costs by up to 50% for businesses that choose accounting outsourcing in India [1].
In this piece, we look at 4 ways in which small and medium businesses with critical accounting needs can save big and commute operational costs by outsourcing their accounts to India.
Control Costs by Outsourcing Accounting Professionals
In our earlier blog, ‘5 Reasons Why India’s Workforce is Specialised for Outsourced Accounting’ we discussed in detail how accounting experts offer quality, end-to-end accounting outsourcing solutions for all things accounting.
With 1 million Indians joining the country’s workforce every month, a recent report by the UK-India Business Council (UKIBC) suggests that India will be the only talent-surplus country in the world that would, by 2030, be fazed by 85mn shortages in the global workforce [2].
Nearly two-thirds of outsourcing costs are labor-related, and India’s cheap cost structure is the key benefit for businesses investing in accounting outsourcing there. An average business would have to spend a lot of money on hiring experienced accounting professionals, managing benefits, establishing career paths, and bearing other human resource costs. Outsourcing a professional services firm with everything built in can prove to be far less expensive than its counterparts in other geographies than employing and training your own full-time personnel.
Optimise Investments by Getting Tech Infrastructure
Another big-time cost benefit of outsourcing accounts to India is that businesses can avoid investing additional funds in infrastructure development by outsourcing accounting to India. When a task is outsourced, the partner that takes it over must make the appropriate infrastructure adjustments in accordance with the process specifications. Companies of all sizes have discovered they may save a lot of money by contracting with accounting firms that already have the appropriate tools.
According to experts, a strong tech infrastructure holds the key to unlocking cost advantages while outsourcing accounts to India. Businesses can both capture savings and derive better value-for-money on their information technology requirements by outsourcing tech support and upgrading their books to easy-to-use, data-safe, and real-time cloud-based accounting platforms such as Sage, Zoho Books, Quickbooks, and Xero – which most accounting outsourcing companies in India are well-equipped with.
Reduce Spending with Automation-Led Accounting
For most firms, accounting and payroll are labor-intensive and complex processes to undertake. To make sure that all accounting transactions are logged on time and in the correct values, you need specialist software and employees who can keep track of a multitude of variables. This is where the need to automate accounting tasks comes to the fore.
With India’s automation-driven accounts outsourcing, you get access to market-leading software and services without having to pay advance fees, improve controls, and decrease fraud. Another key benefit of these tools is that they are tax-compliant, which makes it simple for you to adapt to shifting tax rates. Automation and cloud-based technologies let you be well-prepared for tax assessments while saving you a great deal of money on accounting costs by automatically calculating tax dues, consolidating information, and generating tax reports.
Read our article on 4 ways AI is Optimising Accounting and Bookkeeping.
Minimise Overheads by Cutting Redundant Costs
Accounting, like any other function, involves redundant costs that make up part of overheads and do not directly contribute to generating revenue. When a business manages accounting as an in-house function, expenses such as consultancy charges to an external chartered accountant, legal expenses, and licensing can add up significantly to a business’s expenses. But if you decide to take accounting outsourcing from an Indian company, redundant costs can be minimized to a great extent.
Internal controls, lowering non-compliance risk, managing spending, cash flow, and growth, as well as providing first-rate business solutions, are all areas where Indian accounting outsourcing service providers excel. This, in addition to lower currency exchange rates, affordable hiring of skilled labor, and low infrastructural investments, makes India the most sought-after location for accounting outsourcing, assisting clients in reducing costs associated with redundant functions.
Click here to read our article on The Ultimate 10-step Guide to Incorporating a Private Limited Company in India.
Did You Know?
- India is the world’s largest exporter of accounting services, with a market share of over 50%. (Source: KPMG)
- The Indian accounting outsourcing industry is expected to grow at a CAGR of 15% over the next five years. (Source: Mordor Intelligence)
- Over 90% of Fortune 500 companies outsource their accounting services to India. (Source: Deloitte)
- Indian accounting outsourcing companies save businesses an average of 50% on their accounting costs. (Source: Clutch)
- India has a large pool of skilled accountants, with over 10 million accountants and bookkeepers. (Source: NASSCOM)
Conclusion
By choosing to outsource, you pay for only what is necessary. What’s more, your organisation will be spending less money with an outcome-based, time-specified accounting solution provided by India than you would if you had that department in-house. The main reason for businesses to employ accounting outsourcing is the ability to control costs. By paying for services as you go, you can avoid making substantial expenditures on employees, infrastructure, and software.
Finally, outsourcing can enable everyone on your staff to manage their time much better. By enlisting professional assistance, you can boost the productivity of your business and people without having to engage specialists full-time. Further, you will not need to spend money on high-priced infrastructure and software, full-time salaries, or perks. All these cost benefits make India the complete cost-saving package your accounting function will ever need.
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