India: Accounting & Business Process Outsourcing opportunities in 2017 and beyond

"The Indian accounting outsourcing industry is one of the most dynamic, and competitive in the world, and also one of the most regulated. It is estimated that organizations save about 30-50% of their costs when outsourcing, depending on whether the processes are located locally or abroad."
Pankaj Dave, Senior Partner, B.M. Chatrath & Co, India

According to Pankaj Dave, Senior Partner at B.M. Chatrath & Co in India, if companies are looking for better ways to grow their business, one of the easier decisions is to outsource their accounting back office operations to India. Keep on reading to find out more about B.M. Chatrath's views on why companies should consider outsourcing their accounting processes rather than hire an in-house accounting team.

The Indian Accounting Outsourcing Industry is one of the most dynamic, and competitive in the world, and also one of the most regulated. It is estimated that organizations save about 30-50% of their costs when outsourcing, depending on whether the processes are located locally or abroad.

Organizations are constantly under pressure to reduce their overhead costs to increase their revenues. Businesses need to understand the dynamic and ever-changing nature of the financial industry and stay up to date with the latest developments. Processes need to be adjusted in line with new trends in the market which will help them to generate higher revenues.

Many accountants from the USA, Australia and the U.K have been progressively outsourcing their back office accounting processes to India, taking advantage of cheaper labor and different time zones. All the work in India is executed over a secure internet portal and nothing physical is sent to India.

Adding value, rather than taking away jobs

While outsourcing can mean job losses in these countries, it results mostly in accountants being more freed up to spend a greater amount of strategic time with their clients rather than crunching numbers. Pankaj Dave comments:

"This move could also be positive for staff and provides added value for clients - it also makes sense for the bottom line!"

Indian accountants are highly valued for their productivity and propensity for working longer hours, while compensation is much lower compared to counterparts in other countries.

Latest trends in accounting and financial outsourcing

The opportunities presented by the global outsourcing industry have made it essential for outsourcing service providers in India to stay abreast of the latest developments in software and processes. By keeping up with the trends, the outsourcing industry helps clients to serve their customers better and provide them with an innovative experience.

See below a number of predictions for the industry:

1. Cloud services and automation

In the coming year, an increasing number of companies will shift to cloud based software solutions (SaaS) for use in finance and accounting. There are no expensive licenses to purchase, enabling organizations to reduce a considerable amount of their cost base.

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• Outsourcing accounting services to India: Frequently asked questions

2. Consistent increases in demand

There has been a slow but consistent increase in demand for finance and accounting outsourcing, particularly in Europe and the U.S. Volume also continues to grow due to the rapid increase in global demand.

3. Greater complexity

The financial outsourcing industry can expect more complex and multi-function FAO contracts in 2017 and beyond. Instead of outsourcing just one or two transactional services, companies are now finding it convenient to outsource more complex and knowledge-driven services such as financial planning, management reporting, risk management, etc.

4. Variable cost structure

Companies will slowly move away from fixed cost structures towards variable cost structures. These costings will be more on the basis of headcount and will help to reduce overheads. There is growing demand for pricing models which allow businesses to reduce their back office costs as and when there is a decline in their business volume.

5. Customer process analysis

Businesses will leverage customer process analysis in 2017, enabling them to uncover opportunities and create better training programs for their staff which will further help in improving their processes. Better technology will help vendors to deliver products that meet clients' expectations.

6. Sharing in the gains

Companies will be more open to sharing their profits with service providers if they provide high quality services. In the coming years, organizations will be willing to share their gains with the service providers if they help them to reduce overall costs. Service providers will then be motivated to improve their services and transformation programs.

7. Business Process Utility (BPU)

BPU is a detailed managed service offering which will gain considerable momentum in 2017. It provides a good mix of skilled and talented resources, sophisticated technology and best-in-class processes. Certain financial services such as invoice processing and reconciliation are the best options for BPU.

B.M. Chatrath & Co - Your go to contact for outsourcing in India

BMC has been providing top quality finance and accounting services to clients around the world for almost a decade now. India is the world’s outsourcing hub. The firm has a highly talented pool of skilled accountants and financial analysts who are trained to handle each accounting and financial service requirement.

BMC’s vast experience in working with many clients from different backgrounds has helped the firm to increase its knowledge base and serve diverse clients well. Their team stays up to date with the latest financial trends and predictions and implements them in their processes to provide a great experience to clients and help them reduce their overheads. Their top quality services can be attributed to a best-in-class infrastructure and access to cutting edge technologies.

Contact Pankaj Dave for advice and help with outsourcing processes to India.