India’s rise to the center stage of outsourced accounting
Apple outsources most stages in its value chain to other companies to keep its focus laser-sharp on what it knows best- innovative technology and premium designing. Not just a better focus on your strengths, outsourcing can benefit you in myriad ways like reduced operating costs, improved speed, reduced talent problems, and enhanced quality. Organisations in developed countries have already realised these benefits and have established a globally dispersed value chain with maximum efficiency. Accounting is one such service that can give better returns when outsourced to a reliable party. With over fifty per cent contribution to GDP, India’s services sector has grown leaps and bounds in the last couple of decades. India has already established its reputation in IT outsourcing and is now ready to take the center stage in accounting.
To list some of the benefits of outsourcing to India:
♦ Cost-Effectiveness – The skilled labour rates in India are highly affordable as compared to the developed countries. This happens because of the lower international value of the Indian rupee against the US dollar and the abundance of skilled professionals. The cost reduction can be around 40-50%.
♦ Skilled Talent – A large pool of skilled professionals means that the outsourcing company will have multiple options to choose from. This adds to the fact that the organisation does not have to deploy its resources in finding the best talent in its own country, which in most cases is a relatively higher-paying market.
♦ IT Expertise – India is well-known for its highly skilled IT professionals. In today’s tech-driven world, Accounting and IT skills go hand in hand. Outsourcing to India means signing up for a skilled workforce that can handle both your accounting as well as make use of their technical expertise to handle your financial data. This will help you in getting better data analysis services for business decisions. Overall, providing good background support.
♦ Regulatory support – India’s services sector is key to its economic growth. The government has recognised this fact and have been framing policies to safeguard the sector and ensure good growth. The accounting industry has been a big beneficiary of the legislative reforms through policies like the updated tax structure that allows businesses to optimise their benefits.
♦ Time-zone difference – The time zone difference for firms operating in the west is a huge advantage. Accounting firms in India provide 24×7 services and make the best use of this difference. This way when managers to go work the next morning and open their desktops, they are served with finished work to make fast decisions.
♦ Language convenience – India offers the additional advantage of fluent English-speaking professionals. This makes communication a lot easier. Effective communication is said to be the backbone of efficiency. Thus, this can lead to a higher level of understanding and improvement in work culture.
But, there are some areas where India needs to work:
In order to compete with nations like the Philippines, Indonesia and Thailand, the sector would require tackling some crucial challenges. Data security and internet infrastructure are two such key bottlenecks.
Indian firms need to ensure that they provide best in class data security services since the issues of data breaches have become frequent and severe worldwide. Firms can design IT policies that keep data protection at the centre and have multi-level security systems. Alongside, the administration can look to legislate up-to-date data protections norms for the same.
India ranks 129th in mobile internet speeds and 65th in fixed broadband speed on Ookla’s Speedtest Global Index. This does not befit a nation aspiring to be an international services provider. Though the public sector has been making conscious efforts to upgrade, the efforts
have not been generating desired results. India needs to fast-track the development of its internet infrastructure and match global standards.
Alongside these, it would require Indian accounting firms to open up to the world and present a global brand of trust. They need to stay abreast with the latest technological and legislative developments in the field. It would require adopting software that offers global compatibility and providing smooth conflict resolution mechanisms.
To conclude
Trust-building is a time-taking process and it would require a consistent display of strong character from Indian accounting firms to become partners to organisations worldwide. The establishment of an accounting division, hiring and training bookkeeping personnel and buying bookkeeping software is costly and cumbersome for organisations. These companies, whose core competency lies somewhere other than bookkeeping, will end up unlocking greater potential for their businesses by leveraging the advantages offered by India. Thus, making India a lucrative destination for long-term business collaborations.
