obox.accounting October 18, 2016 No Comments

Accounting Outsourcing India

Accounting Outsourcing India: India is one of the largest Populated country in the world. When it comes to more people it also signalize towards more resources. Human capital is the most vital ingredient for any business. Average literacy rate of the India is 70-75% give or take, which is very significant. Most part of its economy is covered by Manufacturing Industries But, its Servicing sector is also getting worldwide recognition among other sectors.

Now, Western companies are transferring their Operations and responsibility to some developed Asian countries. India is one of these qualifying countries in the Asia Pacific. Some Companies outsource their Production plants or Specific Departments which can better operate overseas. Most usual one is ‘’Accounts Outsourcing’’. Outsourcing Accounting System is a good beginning and it can work better when a company have limited resources and it wants to put them in useful manner. Rather than curtailing its operations it is good to outsource that area of work at lower cost for the best quality.

Why Outsourcing Accounting to India?

The Question is why any company wants to outsource its accounting department to India? Well, the answer is simpler than the question. It is because the Indian Rupee is weaker than the western currency, that’s why it is always beneficial to hire maximum financial resources at less cost. Outsourcing Accounting is now more common practice among large companies. By outsourcing Accounting Operations Company’s cost could reduce up to half and it will also save you from maintaining a huge offshoring accounting record. Your time will be saved and time is money.

Any company which wants to outsource its major task first evaluate all the positive and negative aspects then, it finalize whether it is a good choice or a bad one. Due to high literacy rate of India anyone can count on the Professional skills and conduct of an Indian Accountants. A company can hire an accountant through other company at lower price and who will be more competent and complete loyal to your work. Companies can also have all the time access to their accounts which could result into excellent Reporting and decision making could be easier for the top management.

What to Outsource?

Usually companies prefer to outsource their static operations which are simple but repetitive. Invoice Generation is always a burden to large companies because it’s processing takes too much time and for this they also need to hire extra staff. Indian Outsourcing companies who have skilled staff they provide same services with more accuracy and efficiency. Some major Reports which are core of accounts needs to be made with more careful and there should be no chance of an error These Reports include Trial Balances, Profit & Loss statement and other statutory reports. These Report and Statements keeps very keen importance because if a company submit statutory returns with false information, it could result in unbearable Penalty or a company can blacklisted against one strong lawsuit.

Indian Accountants and Accounting Soft Wares

Indian Accountants are updating themselves day by day with the latest Cloud Accounting Soft wares and online gadgets for the preparations of Accounts. Currently some accounting soft wares are very popular in India which includes Quick Books, Quicken, Intuit’s Lacerte /Pro series, MYOB and many other ones. These soft wares makes accounting more easily and reports generation on these soft wares includes accuracy and Analysis can be retrieve in no time according to client’s demand. Due to the well recognition of the Indian community they are dominated in many companies outside the India.

Compilation of Self-assessment and other tax matters are very difficult in such countries where Taxes are very high Like; United Kingdom. Tax avoidance will be more feasible if a company can hire specialized accountant and they can guide their clients better about what steps they should take for the tax saving purpose. In Last, A Successful business is the one who have expert accountant.

obox.accounting October 14, 2016 No Comments

Outsource Financial Services

Outsourcing is when you hire a different company to provide services at a lower cost. Taking the concept to further levels, finance outsourcing is when you hire an accounting practice to run your financial and accounting functions for you. Outsource Financial Services are mostly outsourced by Small and Medium sized organisations. This is because maintaining an in-house finance department will incur more cost as compared to outsourcing. Sometimes it can be cost effective for larger companies as well.

The question that arises here is, Why Outsourcing? Answer to this is that, outsourcing is not only cost effective BUT it also brings in many other attributes. Outsourcing to an accounting practice means giving your finance in hands of professional accountants who collectively will have more experience than any in-house maintained accounts department. This in turn will accelerate performance and a better maintenance of cash flow. As we all know cash flow is core of every business. A business with good cash flow but making losses in accounts might survive a downfall in economy as compared to a business with worse cash flow and making high profits in accounting statements. Another benefit of outsourcing is that you don’t have to bear the pressure of hiring or training any new employee. This allows them to focus on building their outsourcing accounting businesses rather than worrying about small non-core areas.

There are many different type of financial services that can be outsourced through accounting practices. These can largely be bifurcated into services for personal finance and services for business finance. Business finance can further be divided into different levels. Outsourcing of virtual bookkeeping services is becoming quite common. Small and medium sized businesses often outsource their book keeping as it is more time consuming and sometimes the business owners might not categorize the nature of expense correctly. Sometimes the business owner might not even know the expense he is bearing in running his business. For example many home based businesses don’t know that they can claim use of home as an expense if they are working for home. Many accounting practices use online, cloud computing software. These software are not only fast but also both business owner and the accountant can see all information in real time.

Payroll outsourcing is not only practiced in small and medium sized businesses, but also in large businesses as well. Payroll services are quite complexed where there are large number of employees in a company. Businesses these days quite often run their own share options or pension schemes to give their employees a safer future. Maintaining either of them is quite difficult to manage inn-house.

Your financial outsourcing service partner may also advices you on ways to save taxes within legal boundaries of taxation laws. They help you remain inform about your creditors and their allowed time period, thus avoiding you from any late payment charges. Maintaining debtors and debt collection can also be outsourced to financial outsourcing companies.

On personal level, financial outsourcing can be helpful in maintaining your personal incomes and expenses and filing your tax returns on your behalf. People in multiple jobs or small sole traders find it difficult to take out time to manage their financials. Such people can outsource to financial services and gain maximum benefit through minimising taxes and avoiding heavy penalties due to none or late submissions.

obox.accounting October 13, 2016 No Comments

Business Process Outsourcing Companies

Business process outsourcing (BPO) is a division of outsourcing that comprises engagement of the operations and liabilities of a specific business process to a vendor administration supplier.

Business Process Outsourcing administrations take into account organizations which need to outsource those assignments which are unremarkable and not value addition requiring assessment and reporting, or those undertakings which can be executed more productively and cost effectively by an outside professionals. Two classifications BPO is frequently separated into are back office outsourcing or accounting outsourcing companies, which incorporates inside business capacities, for example, charging or buying and front office outsourcing, which embodies client relevant administrations, for example,

Promoting or technical support. Back office outsourcing would potentially outsource internal tasks such as bookkeeping, data entry, payment processing, and technical accounting support services. Whereas front office services deal with face to face interaction with customers.

Companies may use BPO services from third parties which are diversified geographically. For instance Business process outsourcing can be used outside organization’s home country calling offshore outsourcing. BPO that is arranged to an organization’s neighboring country is called nearshore outsourcing, and BPO that is contracted with the association’s own area is inland outsourcing. There are many benefits of Business process accounting which can be justified in following contests.

Many BPO services providers are equipped with latest technology to manage outsourced work in more effective manners, resultantly company receives outcome which is analyzed through latest techniques providing company optimized competent ability to face potential risks and opportunities. In today’s age competitive environment it is very essential to stay ahead by updating competencies which can be efficiently and effectively achieved through Business process outsourcing companies instead of in using self-created in-house services.

Speed and accuracy comes up as important factors when company grows and achieves a level where rough decision is based on unprofessional work and timeless manners can potentially damage a company’s existence. Business process outsourcing provides accurate services in timely manners as this is perceived as their primary task.

Offshore business process outsourcing can also be a value addition when organization have not enough resources to build up an office to deal with offshore customers. BPO offshore service can be utilized by saving set-up cost of office with readily available competent staff. On the other hand cost benefit analysis should need to be performed that benefits from BPO out weights applied costs. Generally offshore services seek attention because of cheap labor with same professional competencies in home country due to lower living and administrative expenses.

This procedure of offering for and arranging the outsourcing contract gives the owner projection on the costs required in executing the business tasks, which makes the future costs more predictable for the customer .

Any upswing or downturn in the dimension of business procedure work would involve variations in the required labor. The company does not have to stress over this since the staffing for outsourced business procedures would be the BPO service provider’s responsibility. The vendor can easily manage such variation as staffing can be switch from one client to another where there is load of work from client.

obox.accounting October 4, 2016 No Comments

Outsourcing Accounting

Outsourcing is a process of subcontracting your company’s internal tasks to a third party which is specialized in these tasks. Outsourcing accounting is subjected to hire an accountancy firm to deal with accounting matters. Following are the matters which could be outsourced to achieve potential benefits.

  1. Accounting
  2. Invoicing
  3. Accounts payable
  4. Accounts receivable
  5. Analysis and planning
  6. Management Accounts
  7. Financial Reporting to relevant authorities

It is somehow very important to evaluate your strengths and weaknesses in all primary and secondary task of your company. Primary task are subjected to value addition for the company as these are the reason for company existence. Such as primary task for pharmaceutical companies is research and production of drugs. Secondary task are not core activities therefore are less important and should be outsourced. For instance accounting is a secondary task for a production and service industries. Outsourcing accounting can lead a company to benefits as following

  1. For a business, profit generating activities are more important than non-profit activities. Outsourcing your accounting activity which is not at all a profit generating activity can lead management to be more focused on income generating activities.
  2. Major advantage which can be achieved through Outsourcing for accountants is by increasing efficiency and effectiveness of accounting process as people equipped with complete and updated accounting knowledge are dealing with this task.
  3. A company grows with the passage of time and operations of the company keep growing which should be countered with equal competencies. its not easy for a growing company to assess complexity of accounting and hire replacements to deal with such situation ,which causes extra efforts in form of time and money with no quality work assurance .
    Outsourcing accounting at first place can overcome potential complexities as they have availability of staff of each competencies level.
  4. Operating a company in a regulated environment can be subjected to many laws and regulation in respect of meeting final accounts submission deadlines and submission of Annual Return at company house. Any breach of such law can create potential penalties to the company. Many companies face such penalties where there is absence of such technical knowledge in respect of company house requirements.
    Outsourcing accounting can free a company from remembering any dates of deadlines and meeting all regulatory requirements as they have special department to deal with policies.
  5. Along with achieving accuracy in work, Finance Outsourcing accounting is cost beneficial by saving cost of hiring, retention, termination, insurance, payroll taxes, unemployment taxes, and potential penalties due to wrong dismissal of employees. Further it is expensive for a small business to hire accountant for full year to perform part time accounting but an accountancy firm can be hired on time to time basis when needed. Additionally no office space and equipment are needed as compared to in-house accounting
  6. Potential investors in a company are seeking to invest in companies where management is responsible in their roles. Which proves to potential investors that company in which they are investing is taking their accounting matters seriously by using highly qualified professionals.
  7. It is very important that all company accounts should be accurate and completely maintained for planning at strategic level .it is very sensible to involve experts in preparation of data which is used as a base for important planning. Accounting firms do accurate accounting and provide analysis on quarterly and yearly basis making spending worthy.
obox.accounting October 3, 2016 No Comments

Outsourcing Accounts Payable

Overview
Outsourcing Accounts Payable: In this era where everything is so speedy, no one wants to spend time or money on Non-Value added activities. Now business management is totally changed as compared to the earlier centuries because today Companies spend most of the time to analyze their current policies and innovate them with time saving strategies. One major part of this emerging trend is Outsourcing. Whether organizations are small or large, they want to compete one another with time savor tactics.

Outsourcing is a quite cost saving and effective way to transfer burdensome operations to third party where they have professionally skilled teams to handle these particular areas. Which are very specialized and have recourses to manage these outsourced functions better than internal departments.

Accounts Payable

Outsourcing Accounts Payable or Trade Creditor is the money which one party owed to another party but it will be paid after sometime not like cash sale where payment made at the point of goods or services transfer. It is a credit balance in the Financial Statement under liabilities section, payable balances arise when an entity make purchases or avail services from another entity. These entities called Suppliers or Vendors in the record of purchasing party.

Purchase Cycle

Cycle of purchase start when an entity place purchase order and demand goods or services from suitable vendor or demand price quotation in some cases. After, PO Generation suppliers will send price quotation to its prospective customer. First entity will negotiate and set feasible price at which final order will be placed to the supplier. Goods will be received by purchaser and stock entries will made based on the GRN and after this step, vendor will send purchase invoice and it will be on his own letter head which is significantly important otherwise it will have no validation. Now, finally based on that invoice we will post that invoice in our Accounts because it contains final purchase price and supplier name. Now, liability is standing in our Accounts payable ledger.

Purpose of this whole overview is to elaborate that it’s very long and time taking process. Most part of it consist of Paper work which is hard to process and their always a chance of error while transferring manual invoices into online database. Currently companies started to make electronic invoices and bypass this whole paper system but that is another discussion.

Accounts Payable & Outsourcing

Account Payable is a good start to outsource for any business because it is very cost effective and also efficient. Sometime companies spend much of their resources on these non-value added activities. So, it is better to transfer some part of responsibility to another entity at less cost. Instead these resources can be used on any other areas which are core of a business. For small entities it can be feasible to continue recording and processing of Accounts Payable internally because they don’t have to process and maintained a large number of purchase invoices.

With the help of outsourcing our cash flow cycle can be managed easily. Some companies collapse because they fail to maintain balance between their cash outflows and cash Inflows. Aging analysis of suppliers are important and in this area an outsourcing company can better guide about when next payment is due and if the resources are limited then it’s time to arrange required amount so, we can settle our liability on timely basis. Definitely, for this we will seek help from our Accounts receivables department as well, which will recover money from entity’s Trade debtors.

Confidentiality could be an Issue where businesses handover all their supplier’s information, terms and conditions on which they are making transactions. For some businesses it is a competitive advantage which make them unique in highly competitive markets. Some companies use this information for their promotional services and trade these information to marketing agencies. Yes, there are now many strict rules and regulations which cover confidentiality clause but still there are chances of data theft.

Conclusion

Companies can easily outsource operations such as accounts payables, as the complexity level is low. Most of its part is repetitive because same nature of transaction take place again and again. So, there is no harm to outsource this department when there is a large number of invoices and maintaining a balance between cash flows is crucial for the business.