Accounting firms are increasingly under pressure to get more done with limited resources at their disposal. Rising labor costs, talent shortages, and an ever-increasing compliance mandate imposed by the government are some challenges to name a few. Bookkeeping in one such task that has been under scrutiny among major accounting firms. While the task itself is not cause for sleepless nights, there are issues that are emerging that need a closer look.
A 2024 study by Thomson Reuters found that hiring and retaining top talent is the number challenge [at 26%] for accounting firms; followed by timeliness mandates and government compliance (13% and 11% in that order). So, what’s the solution? Firms are increasingly outsourcing bookkeeping to India as a viable solution.
But haven’t we heard this all before? Outsourcing is not a new phenomenon. What has changed since the decades old Business Process Outsourcing (BPO) revolution and more importantly, why is India emerging as a hub of outsourced bookkeeping?
In this blog, we explore the key drivers behind the trend to outsource bookkeeping to India. We will also cover why moving base is both strategic and will fare long-term consequences for accounting firms.
The Benefits of Outsourcing Bookkeeping to India for Accounting Firms
While outsourcing bookkeeping to India began as a cost-cutting measure, overtime it has evolved into something much bigger. Today it is seen as a strategic move, enabling firms to streamline operations, and reduce significant backlogs, among the other benefits.
Here is a detailed look at five top benefits that are compelling accounting firms to take this leap to India:
Strategic Cost Restructuring
Outsourcing to India reduces an accounting firms’ operational costs anywhere between 40-60%. Nevertheless, the real value comes from a firm shifting its resources from fixed costs to variable costs. In-house teams require fixed salaries, benefits, and office space, leading to significant overhead costs.
Outsourcing bookkeeping to India reduces certain fixed costs and the much-dreaded rental allocations; thereby saving significantly over the long run. According to the National Association of Accountants (NAA), outsourcing financial functions like bookkeeping can reduce costs by up to 50%.
By reducing overhead expenses, firms can reinvest savings into higher-value services like advisory roles that generate additional revenue. This allows for a more structured allocation of resources that sees a stronger case for business ROI.
Scalability to Match Demand Fluctuations
The ability to scale operations without hiring permanent staff is a key benefit of outsourcing bookkeeping to India. During peak months, such as tax season or year-end closings, firms typically hire temporary staff to manage their increased workloads. In addition to being able to get the job done on time, firms also save time and money not having to train resources for the one-off season.
As per a study conducted by the Consultative Committee of Accountancy Bodies (CCAB): 47% of accounting firms cited outsourcing as a strategy for efficiently handling peak season demands. The scalable model in outsourcing allows firms to expand and contract their capacity based on demand, while ensuring service quality remains consistent.
Access to Advanced Technology and Automation
Outsourcing bookkeeping to India gives firms access to the latest accounting software, reporting systems, and automation tools that many smaller firms often find unnecessary or out of budget. With the accounting software industry projected to grow from $12.1 billion in 2020 to $20.4 billion by 2026 – India is emerging as a key adopter of innovative accounting technologies.
Indian accounting businesses are typically at the forefront of implementing these advancements, giving international firms immediate access to cutting-edge tools that streamline workflows and enhance accuracy.
Cloud-based platforms like QuickBooks, Xero, and Zoho Books are widely used by Indian outsourcing companies. This not only boosts efficiency but also ensures quality of service and transparency that today’s clients expect.
Focusing on Core Competencies and Revenue Growth
Outsourcing frees a firm’s internal teams to focus on strategic advisory services and business development. Firms can shift their focus to high-priority services like financial planning, CFO services, and tax strategy, strengthening client relationships and opening new revenue streams.
This shift changes accounting firms from purely transactional operations to value-driven advisors, assisting clients with everything from tax planning to business strategy. This focus not only strengthens client relationships but also enhances the firm’s overall service offering.
Enhanced Client Service and Faster Turnaround Times
It’s no surprise that a majority of firms prefer working with outsourcing partners that offer complete transparency into their internal processes. Outsourcing ensures that accounting firms can deliver timely, accurate reports without the delays that come with traditional in-house processes.
Bookkeeping done overnight is ready by the following morning, ensuring that firms can deliver on-time updates and enhance client satisfaction.
Outsourcing bookkeeping to India enhances client service through 24/7 extended operations that eliminate processing delays by providing access to skilled professionals who work during their regular business hours.
This strategic partnership allows accounting firms to process more client work efficiently and respond to requests more quickly, as dedicated teams of bookkeepers with specialized expertise can handle tasks effectively.
The time zone advantage enables continuous workflow progression, where tasks initiated during one business day can be advanced and completed during the same working hours, creating faster delivery cycles. Monthly reporting, reconciliations, and financial statements that typically take days to be prepared can be ready for clients to receive sooner, enabling them to make timely decisions.
This results in improved client satisfaction through quicker response times, more frequent updates, and flexible reporting schedules that meet urgent client needs.
Core Bookkeeping Tasks Accounting Firms Are Outsourcing to India
As accounting firms seek to optimize operations, understanding which bookkeeping functions can be outsourced is essential. Here’s a breakdown of key tasks that Indian outsourcing partner like AcoBloom International can manage for accounting firms:
Recording Daily Financial Transactions
Outsourced teams handle day-to-day entries using cloud-based software and well-structured workflows. Transactions are accurately categorized according to the firm’s chart of accounts, ensuring precision and audit readiness from the ground up.
Accounts Payable (AP) Processing
From three-way matching of invoices to timely payments and vendor reconciliations, Indian providers streamline AP functions. Automated systems reduce human error, while proactive monitoring avoids late penalties and builds stronger supplier relationships.
Accounts Receivable (AR) Management
Efficient accounts receivable services include invoice generation, payment tracking, follow-ups, and AR aging analysis. Offshore teams also assist in reducing outstanding balances, directly improving cash flow and liquidity.
Bank Reconciliation
Scrupulous matching of internal records with bank statements ensures accuracy in cash reporting and helps detect discrepancies, fraud, or omissions early on a vital internal control activity.
Expense Reporting and Policy Compliance
Bookkeeping teams manage digital expense claims, enforce company policies, and generate categorized reports. This adds transparency to business spending and supports cost-control strategies.
Financial Statement Preparation
Indian professionals prepare key financial reports balance sheets, P&Ls, and cash flow statements in compliance with GAAP/IFRS. These statements are not just accurate but insightful, enabling better decision-making.
Payroll Calculations
Outsourced payroll experts ensure timely and accurate wage processing, incorporating legal deductions, benefits, and wage laws. This reduces compliance risks and ensures payroll integrity.
Payroll Tax Filing
Experts manage federal and state filings, including W-2s, 941s, and 1099s. By staying up to date with changing tax laws, they prevent costly penalties and ensure full compliance.
Financial Reporting & KPI Monitoring
Custom financial reports aligned with business goals help partners monitor key metrics, spot trends, and support strategic planning. This goes beyond compliance it’s about enabling data-driven growth.
Audit Support
During audits, outsourcing partners provide organized documentation and respond to auditor queries, significantly reducing stress and disruptions for internal teams.
Conclusion
The accounting profession is at an inflection point, shaped by labor shortages, growing client demands, and the need for greater operational efficiency. Outsourcing bookkeeping to India offers a strategic path forward for accounting firms facing everyday business challenges.
AcoBloom International offers tailored outsourcing bookkeeping solutions designed to support your firm’s evolving needs. Whether you’re looking to scale during peak periods or streamline daily operations, we offer secure, compliant, and high-quality services that take the strain out of bookkeeping.
