Nowadays, Small and Medium Enterprises (SMEs) operate in challenging business environments. Finance management is one of the most crucial things for making sure your business succeeds. SMEs have to be involved in a range of activities like keeping their customers happy, staying better than the competitors, and doing all the day-to-day operations. As a result, they have little time left to focus on bookkeeping, financial analysis, and statutory compliance.
That is where Account Outsourcing comes into the scenario. It is not just about saving money but it is a smart move that can help you control your finances better without having to worry about all the complicated accounting tasks. Let us understand how outsourcing your Accounting work to experts can change the way you run your business and make operations easier.

Regulatory Requirements for Account Outsourcing:

Following are the provisions under different laws requiring the maintenance of books of accounts by entities carrying of a business or profession:

a. Section 128(1) of the Companies Act, 2013 requires every company to prepare and keep the books of account and other relevant books at its registered office.

b. Section 44AA of the Income-tax Act, 1961, mandates the maintenance of books of account by certain persons engaged in specified professions and businesses. It provides for the preparation and maintenance of books of account by a person if his income or gross turnover or receipts, as the case may be, exceeds the prescribed threshold limit.

c. Section 36 of the CGST Act, 2017 requires every registered person to keep and maintain the account books and records for at least 72 months (6 years) from the due date of furnishing of annual return for the year pertaining to such accounts and records.

d. Section 34 of the LLP Act, 2008 requires limited liability partnership to maintain proper books of account as may be prescribed relating to its affairs for each year of its existence on a cash basis or accrual basis and according to double entry system of accounting and shall maintain the same at its registered office for such period as may be prescribed.

Thus, all types of entities, irrespective of their form, have to mandatorily maintain their books of accounts as per the provisions of the applicable Laws.

Why Should You Outsource Your Accounts?

Outsourcing accounting does not mean handing over responsibilities, but it is more of bringing in expertise, efficiency, and professionalism in the accounts department and giving yourself more bandwidth for expanding business. There are many reasons why accounts should be outsourced. Here is why it is worth considering:

● Save cost and time

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Small and Medium-sized enterprises often face challenges in maintaining an efficient in-house accounting team. Limited resources and expertise make handling complex financial tasks difficult. A major challenge is continuously training and retaining qualified employees. Maintaining an in-house accounts team is quite expensive. You have to pay for hiring costs, salaries, employee benefits, perks, training, and statutory compliance. Apart from this consider the cost of providing office space, and software subscriptions. Outdated accounting systems further complicate financial management. Without updated knowledge and the latest technological tools, managing accounts may lead to inefficiencies and inaccuracies. In contrast, the account outsourcing model offers you a cost-effective solution. By outsourcing accounting functions, you can eliminate these overheads and get access to skilled and experienced professionals at a relatively lower cost. You get better results for lesser cost and extra hours for your business growth and expansion. It ensures cost savings, expertise, timely statutory compliances, and access to the latest tools without the burden of an in-House team.

● Access to experts who understand compliance

Account outsourcing is a strategic approach that helps businesses in improving financial efficiency and regulatory compliance. Navigating the complex tax laws, tax filings and compliance requirements is a daunting task and very time-consuming process. These laws are constantly changing and one needs to be always updated with the latest regulations, amendments, and reforms. This is a full-time job. The consequence of any non-compliance can be severe and can attract interest and penalties. These compliance risks can be managed well with the help of Account outsourcing. Outsourcing ensures that your accounts are always managed by experts who know the rules and the latest changes. These ensure you never miss deadlines and avoid paying penalties. By outsourcing to a specialized firm, organizations can stay updated on evolving regulations with minimum financial management risks.

● More focus on growing your business

As a business owner, your time is valuable. It is essential to prioritize activities that can drive growth, innovation, and customer satisfaction. Instead of getting buried in the umpteen spreadsheets, it is better to have more time to focus on better customer relations, develop new products, and expand new markets. Account Outsourcing allows you to free up your time and resources and helps you channel your energy to what you do best i.e. driving business success and growth of your business. This leaves the accounting part with professionals who have the requisite expertise and bandwidth to do the job.

● Flexibility

As your business grows, your accounting requirements become more and more complex. As your company’s financial landscape undergoes significant changes, more sophisticated financial management and accounting expertise is needed. Whether you are a startup with basic bookkeeping requirements or an established SME navigating cashflow challenges, Account outsourcing offers scalability and flexibility tailored to your current stage of growth. With Account outsourcing, you can easily adapt to changing accounting requirements ensuring your accounting is aligned with your evolving business needs.

● Leverage technology

Professional Accountants leverage the benefits of using the latest technologies in streamlining your accounting with enhanced accuracy and providing actionable insights. They use cutting-edge technology to automate various routine and repetitive tasks, reduce errors, and generate productive reports. This means that by outsourcing accounts, you get access to the latest software and tools without any real investment in them.

How Can We Help You Succeed?

At the heart of our approach is the philosophy of treating your business as if it were our own. We treat your business as if it were our own business. Our team of experienced professionals understands the accounting needs of SME clients. We are well-equipped to help you stay organized, compliant, and ahead of the curve.

Here is what we can do for you:

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● Accurate Bookkeeping: We maintain your accounts with precision by accurately recording all financial transactions, reconciling balances with third-party ledgers, and keeping accounts up to date so that you are always audit-ready.
● Timely Tax Compliance: Be it GST, Income Tax, or TDS compliance, we ensure that your filings are accurate and timely. This ensures that you don’t end up paying a penalty.
● Detailed Financial Reports: We understand your business. Hence, we provide you reports tailored to your business needs. These reports are easy to understand, have actionable data, and help you make sound financial decisions.
● Coordination with Tax Consultants and Auditors: We bridge the gap between you and your tax consultants and auditors. We provide them with accurate and timely financial information and resolve their queries. This helps in making their job easy and your compliance smoother.

Why Partner with Us?

Choosing the right accounting partner is a crucial and long-term decision. We have built a reputation for delivering tailored accounting solutions that meet the unique requirements of SMEs. Here is why SMEs trust us to manage their accounts:

● We understand SMEs – We specialize in working with SMEs which means that we understand the specific challenges you face. Our team understands the business requirements of SMEs allowing us to provide informed guidance and support.
● Tailored accounting solutions – We understand that every business is unique and will have its own set of goals, challenges, and requirements. That’s why we don’t adopt a one-size-fits-all approach but rather offer customized accounting solutions that can address your specific requirements.
● Transparency and confidentiality – We recognize that your financial data is sensitive, and we take the safety and security of data very seriously. Your data is safe with us as we ensure the highest standard of security and ethics.
● More than just accounting – We are not more than accountants and number crunchers. We are your strategic business partners. We help you interpret your data and make smarter decisions to grow your business.

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Some Facts About Account Outsourcing:

● As per JoinGenius.com, businesses can save up to 85% on costs through strategic outsourcing
● As per Capital Counselor, approximately 37% of small businesses outsource their accounting and IT services.
● As per microsourcing.com, businesses can achieve up to 70% savings on staff costs by outsourcing to offshore providers.
● As per Capital Counselor, the primary reasons companies choose to outsource include cost reduction (70%), increased efficiency (24%), and access to expert assistance (18%).
● 65% of startups outsource at least one accounting function (e.g., payroll or tax compliance).
● Large organizations outsource complex tasks like tax planning (48%) and financial reporting (55%) to optimize costs and ensure accuracy.
● India accounts for 37% of the global finance and accounting outsourcing market, driven by cost efficiency and skilled professionals.
● Many companies outsource their GST filings and compliance requirements to firms in India, which has resulted in 30-40% reduction in compliance costs.
● The accounting outsourcing sector in India employs over 500,000 professionals and is growing at a rate of 7-9% annually.

The above statistics highlight the growing importance of accounting outsourcing as a strategy for businesses for cost optimization, compliance, and scalability.

Bottom Line

Account Outsourcing has transformed many businesses by improving their operational and compliance efficiencies. It saves overall cost of the business by reducing costs of hiring, training, salaries, statutory contributions, software, etc.

Outsourcing your accounting functions isn’t just a way to save money, it is a way to work smarter. By handing over your bookkeeping operations to experienced professionals, you are freeing up time, reducing stress, and giving your business the tools it needs to thrive.

If you are ready to experience the benefits of Account Outsourcing, we are ready to help you make the process seamless. Let’s talk about how we can help you simplify your accounting and take your business to the next level.

Get in touch with us today, and let’s start building your success story together.

Authored by:
Ashish Sheth | Co-founder, Accounts and Assurance

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