Undeniable Benefits of Accounting Outsourcing Services in India

Running an accountancy firm is akin to parenting a child. As the firm ages, it experiences changes, struggles, and has to deal with increasingly additional responsibilities every year. That’s why it’s vital for small-scale accountancy firms in the UK to be prepared with service improvements, additional features, and increased capabilities to manage new responsibilities every year. 

How are the UK’s small-scale accounting firms faring in this process? Not so good. Between 2017 and 2019, the UK’s accounting industry has seen 490 firms shut down. Accounting firms with turnovers below £100,000 suffered the most. Their failures are largely down to the inability to hire new resources to oversee additional workloads. In the same time, large-scale accounting firms have flourished. Luckily for the UK’s small-scale accounting firms (that are still in business), their well-established peers have laid down their blueprint of success during this period. A key part of this blueprint is outsourcing. 

Why Should Smaller Accounting Firms Engage in Outsourcing? 

In the past, only large-scale accountancy firms in the UK were able to engage in outsourcing. Now, technological tools to facilitate outsourcing are widely available. Be it the latest accounting software or cloud accounting – small-scale accountancy firms in the UK have the perfect chance to replicate what major financial firms like Barclays and Aviva have done for decades. They can now receive high-quality accounting services for considerably low fees. More importantly, these offshore experts help accountancy firms in the UK save a lot of time by overtaking tedious responsibilities such as – 

• Daily bookkeeping

• Calculating VAT returns

• Producing year-end accounts

• Evaluating self-Assessment tax returns

• Tax planning

• Payroll management

When these tasks are carried out by the best accounting talent of foreign countries, accurate results and substantial cost-savings are guaranteed. Growing accounting firms in these foreign countries don’t have large domestic markets. There’s a large number of accounting experts who are more than willing to partner with accountancy firms in the UK at cost-effective rates. Their eagerness is matched by the quality of work they produce. That’s why leading accountancy firms in the UK have started outsourcing ‘core’ activities.

Offshoring to India – The Undeniable Benefits

The McKinsey Global Institute recently revealed that for every dollar spent on outsourcing a responsibility to India, American firms save a dollar and a half. This principle also applies to accountancy firms in the UK. Contrary to belief, outsourcing accounting responsibilities to India doesn’t ‘rob’ local employees of their livelihoods. It creates a system where both parties can gain mutual economic benefits. Just imaging, if your offshore accountants save your firm £100,000 every year, will the firm downsize or upsize? Plus, many Indian-based offshoring firms specializing in providing outsourcing services to British accounting firms are partly owned or run by Britishers!

Here are other reasons why accounting outsourcing services in India is so beneficial –

• India’s talent pool when it comes to accountants is deeper than most countries. Education is cost-effective. Most accountants from the country are English-speaking chartered accountants trained in the art of working under British accounting standards. 

• Indian accounting firms offer flexible pricing options.

• Their premium quality services can be availed on short-term contracts. The accounting firm in the UK has all the leverage in this cross-continent business relationship. 

• India has an ever-improving technological infrastructure which gives these accounting firms the capabilities to use the latest accounting software or employ cloud accounting. 

• The democratic and highly stable Indian government encourages Indian companies to take up these tasks as the local markets aren’t big enough to support the ever-increasing workforce. Accountancy firms in the UK basically get to pick the best accounting experts of the country. 

• The time difference between the UK and India is minimal (four and a half hours), making it easier for these offshore experts to offer quick turnaround times and 24/7 services.

Outsourcing to India – Getting Started

Many leading accounting experts from India have helped launch small-scale British accountancy firms by managing their accounts right from the start. These relationships are initiated during the birth of these firms, which makes it easier to install certain workplace practices from the word go. When these practices are sustained over long periods, these small-scale firms grow on to become large-scale firms. These relationships are based on mutual confidence. 

Technically, the only downside of engaging in outsourcing from such an early stage is cost. How can small-scale firms in the UK afford to have offshore partners when they’re finding their feet in the industry? Well, the fees Indian accountants charge is minimal compared to what an average in-house accountant earns in the UK. The cost of outsourcing is over 60% less than the cost of setting up and in-house team in the UK. 

Outsourced accountants from India can also enter the picture once an accountancy firm has established itself in the industry. That’s what’s exciting about outsourcing to India – firms are guaranteed to receive high-quality output, irrespective of what payment model they choose, when the partnership begins, or the overall duration of the partnership!