Accounts outsourcing to India: 7 key benefits & top agencies

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Outsourcing helps businesses save time and resources while benefiting from high-quality labor. 

Among others, India is a leading country in the outsourcing industry, especially in the accounting and finance sector. 

However, does it make sense for your business to outsource accounting services to India? 

Let’s find out. 

In this article, we’ll cover the seven key benefits of accounts outsourcing to India. We’ll also look at some potential challenges of outsourcing accounting services and some of the top accounting firms in India. 

Let’s get started!

Table of Contents

• 7 major benefits of accounts outsourcing to India
• 3 potential challenges of outsourcing accounts to India
• 5 leading accounts outsourcing companies in India

7 major benefits of accounts outsourcing to India

India has an abundance of world-class accounting firms. Foreign companies can outsource to Indian CPA firms (Certified Public Accountants) to benefit from their cost-effective and quality services.  

So what are the types of services that can be outsourced? 

This depends on individual business needs, budget, etc. 

However, there are certain common accounting services that are popular in India, including:

• Accounts Receivable or Accounts Payable Services.
• Bookkeeping Services.
• Drafting a Financial Statement.
• Generating Bank Statements.
• Controller Services.
• Company Formation Registration.
• Financial Planning and Analysis.
• Cost or Financial Accounting.
• Fraud or Forensic Accounting.
• Tax Reporting and Filing.
• Payroll Processing.
• General Ledger Maintenance.

Want to know more about the best offshore accounting services? Check out this detailed guide.

Now, let’s take a closer look at some key benefits of outsourcing accounting to India:

1. Excellent legislative support

Hiring an in-house accounting team can be a lot of work. Additionally, tax procedures and legal obligations can be complicated. However, when you outsource accounting service procedures to an agency in India, they can handle these on your behalf. 

For instance, Indian accountants stay up to date with the latest IRS (Internal Revenue Service), US GAAP (Generally Accepted Accounting Principles), UK GAAP, and other modifications. The best Indian accounting firms also keep up with IFRS (International Financial Reporting Standards) valuations. 

2. Skilled workforce

While employers outsourcing their accounting needs to India benefit from cheaper labor, the low costs do not influence the quality of work. 

India has the third-largest publicly funded higher education system in the world with over 1000 universities across the country. 

Moreover, India has one of the highest literacy rates in the world. For example, Kerala and Delhi in India have literacy rates of 96.2% and 88.7% respectively. These are a lot higher than the world average of 86.7%.

Not to mention, India has an abundance of CA (Chartered Accountant) and CPA (Certified Public Accountant) firms offering attractive opportunities to young talent. So if you decide to outsource your accounting process to Indian companies, you’ll have a lot of options to choose from.

3. Innovative infrastructure and IT development

India is known for its booming IT and software development industry. In fact, it’s one of the top outsourcing and offshoring destinations in the world, known for its excellent technical support. 

As a result, accounting firms in India are equipped with the latest accounting software, internet services, and security solutions. This enables them to cater to all of your accounting needs quickly and accurately, making it a great destination for accounts outsourcing. 

Find out all about the benefits of outsourcing accounting services in this article.

4. High english proficiency

India is the second-largest English-speaking country in the world 

It ranked 48th out of more than 100 participants in the EF EPI (English Proficiency Index) in 2021. 

Moreover, most software and communication tools used in India have an English user interface, including popular cloud accounting software like Xero.

So Indian accounting consultants will be able to communicate clearly and understand your business processes without any issues. 

5. Reduced costs

India is a developing country, so it has a lower cost of living and labor charges compared to most other developed nations. 

For example, the average monthly salary in India is USD 422. That is far less than the average monthly salaries in countries like the USA (USD 7,900/month), the UK (USD 7,764/month), Australia (USD 1,435/month), and Germany (USD 4,194/month), etc. 

Moreover, India is 70.7% cheaper than the United Kingdom and 64.4% cheaper than the United States in terms of its cost of living. 

As a result, companies outsourcing to India can benefit from cost-effective labor and reduce their operational costs. 

Discover the average salary in India and related trends here.

6. Flexible staffing and improved scalability

When you outsource an accounting service to another country, you’re essentially hiring remote teams for expanding your business processes. So you need a team that can adapt to your growing accounting needs. 

For instance, Indian accountants often work US, UK, or other shifts to attend to financial matters that require urgent attention. 

Plus, due to the abundant availability of talent and lower labor costs in India, you can choose to upscale or downscale your business with a very short turnaround time. 

For example, if you’re a small business with limited resources, you can start by outsourcing your payroll services to an agency. From there, you can easily upscale and prepare another contract to include additional services like bookkeeping, accounts payable, etc. 

Plus, Indian GST registration (Goods & Services Tax) and tax forms can be filled out online so you won’t face any administrative delays. 

7. Time zone differences can be beneficial

CPA firms from the US and Europe often use Indian outsourced accounting services to take advantage of the country’s time zone difference.  

India is 4.5 hours ahead of the United Kingdom, 9.5 hours ahead of the United States, and 3.5 hours ahead of Germany and Belgium. Indian companies can use this time difference to benefit their business. 

For example, you can send your accounting service provider a request in the evening (your time.) By the time you’re back in the office the next morning, you’ll have the results waiting for you because your India-based accounting professional would have been working while you sleep. 

Next, let’s understand some potential drawbacks of outsourcing accounts to India.

3 potential challenges of outsourcing accounts to India

Outsourcing to any country can be a challenge at first, especially if you don’t choose the right outsourcing service partner. There are certain potential challenges of outsourcing accounting to India. 

Let’s take a closer look at some of them: 

1. Lack of team accessibility

One concern for companies outsourcing for the first time is that they’ll have trouble connecting with their outsourced team. 

When you outsource your accounts to India, you’re essentially handing over the accounting department to a different team in a separate time zone. Sometimes, you may have delays. 

That’s why it’s crucial to practice transparent communication with your outsourcing partner. Have a clear communication plan in place. Also, consider using communication tools like Slack, MS Teams, or ClickUp to ensure that your virtual accountants remain accessible throughout the day. 

2. Different work cultures

Despite the fact that most people in India speak English, there are other cultural parameters that come into play when outsourcing to the region.  

For instance, your outsourced team may not have the same working days or holidays as your country. They may also have different frames of reference or jargon while working. 

So it’s important to make sure that your outsourcing partner is competent and adaptable. They should also possess a company culture that fits in with your own.  

So, when choosing outsourced accounting services, consider the following questions: 

• Does the accounting firm have any previous experience working in your country? 
• Have they dealt with similar procedures before? 
• Is your accounting firm up-to-date with your country’s latest accounting regulations and requirements? 
• What kind of accounting software or technology do they use? 

Moreover, how flexible are they with holiday leave policies or last-minute work requirements? Do they have any provisions for calamities or other emergencies? 

Once you’re more familiar with the service provider, you can collaborate more effectively to achieve the desired outcomes. 

3. Problems with compliance and data security

Your company’s financial data in the wrong hands could lead to serious security issues. 

So how can you make sure that you’re choosing an outsourcing partner that prioritizes data security? 

To start with, you can ensure your accounts outsourcing partner has a strong security protocol in place:

• Do they have 24/7 video surveillance in their office? 
• Are there strict security checks and biometric clock-in/clock-out for all employees? 
• How is your information going to be handled and stored? 
• Does the company have a solid data security policy in place? 
• If your data is stored on their systems, is it password protected?
• Which employees will have access to your data?

Moreover, make sure that the company is certified by the government, has the proper company registration documents, and has a proven track record of compliance. You can also speak to the company’s previous or existing clients to understand how efficiently the team works. 

Next, let’s look at some of the leading accounting companies in India. 

5 leading accounts outsourcing companies in India

Here are some of the top accounting firms in India that you should consider for your business: 

1. Outsourcing Hub India (OHI)

OHI is a leading financial outsourcing firm based in New Delhi, India, specializing in real estate accounting and property management 

With over 15 years of experience working with 50+ companies across the UK, USA, and Canada, OHI offers several services including:

• Asset Management.
• Lease Abstraction and Administration.
• Real-Estate Back-Office Services.
• Business Plan Formulation.
• Fixed Asset Accounting, etc.

2. CapActix Business Solutions

CapActix is an ISO-certified accounting outsourcing company, dealing with specialized solutions in the finance industry. Based in Ahmedabad, India, with offices in the US, the Philippines, and East Africa, the company has clients all over the world. 

CapActix specializes in many accounting and payroll services like: 

• Bookkeeping Service.
• Payroll Processing.
• Inventory Management.
• Virtual Accounting.
• Tax Preparation, etc. 

3. FinAcc Global

FinAcc Global is a leading accounting agency based in Ahmedabad, India. It specializes in providing various financial services to companies in the UK, USA, Canada, and New Zealand. 

With over a decade of experience, FinAcc Global is a dependable choice for companies looking to outsource their accounting to India. FinAcc Global offers several services, including:

• Bookkeeping.
• Account Outsourcing.
• Payroll Processing.
• Payroll Advisory.
• Fixed Assets Management, etc.

4. Sage BPM

Sage BPM is an accounting and back-office service provider that caters to businesses based in the UK, USA, and Australia. It’s used by 20+ clients across the world and is a great choice for small to mid-sized businesses. 

Founded in 2014 in Ahmedabad (India), it offers accounting solutions like:

• Tax Returns and Filing.
• Financial Analysis.
• Asset Management.
• Credit Reconciliation.
• Maintaining General Ledger, etc.

5. Firstsource Solutions

Firstsource Solutions is a leading BPO service provider in New Delhi, India, catering to the accounting needs of over 100+ businesses worldwide. 

The company has over 20+ years of experience and 28,000+ employees across India, the US, the UK, and the Philippines. So it’s a good outsourcing option for businesses looking to streamline their accounting and payroll processes like: 

• Origination (pre-qualification of the borrower).
• Customer Acquisition & Servicing.
• Legal Collections.
• Compliance & Risk Management.
• Fraud Prevention.
• Company Incorporation, etc.

Final thoughts

It can be difficult and costly for a small business or startup to hire an in-house experienced accountant. They could outsource their accounts to a country like India instead, and benefit from a large talent pool and labor market.

Indian accounting companies are equipped with all the latest accounting technology and software needed for outsourcing and are far more affordable than most other countries. Not to mention, India falls in a favorable time zone for outsourcing and is a top choice for many companies around the world.

If you wish to outsource accounts to India, go through this guide to make an informed decision.