What is the cost-advantage when I outsource accounts to India

What to watch for when outsourcing accounting to India?

When it comes to outsourcing the accounting department functions in your organisation, the reason ‘why’ is probably obvious. You will save costs, save labour overheads, save real estate rentals, power costs, reimbursements, employee benefits.

Further, there will be no cost for appraisals & training, no capital expenditure on computers & software and related costs for non-essential people, and no extra charges for quality control, employee insurance and paid leave.

What’s more, as an overseas company you will have a better turnaround time thanks to the time difference with India. They start the day earlier and are thus able to deliver faster. There will also be reduced workload on the accounting & HR Departments as they don’t have to worry about retrenchment in bad times, work continuity in case of high employee turnover. Further there are supervision and training costs and headaches.

As outsourcing involves an external party in addition to yours, there is thus better quality of accounting output due to well defined process & SLAs. But the practical questions are…

What size of organization would benefit the most from these services?

It is observed that small and medium enterprises in Europe, having an accounting department with headcount of between 5 & 20 people benefit the most by outsourcing 60% to 75% of their accounting jobs.

What is the process for signing up with an offshore accounting data entry partner?

Typically the process can be outlined in five steps:

1. It begins with the signing of the Agreements & NDAs
2. Then documenting the process, as would work on a daily basis.
3. You must next provide the Data Entry Manual
4. Training of offshore personnel (Online / On Site / Telephonically)
5. And finally conduct a trial / pilot run before you go live with daily data

What is the process for regular work flow?

The process for regular work flow is as follows:

1. You (being the client) scan & email source documents to the offshore data entry service provider
2. They print out the documents and enter data into the system
3. The data entry is reviewed by a Supervisor and posted
4. They confirm the data entry posting by email at end-of-day
5. Insist on Weekly / Monthly MIS reports on pre-determined formats

This apart, there might be questions relating to training, service levels, quality and confidentiality. These are obviously decided on a case to case basis.