In this new era, outsourcing is seen as a way to add value to companies. Since industries across the world are rapidly transforming with technology, outsourcing is much easier now than it was a decade ago. The industries and the companies that are able to leverage this transformation and partner with the best offshore experts will thrive throughout the next decade. The global accounting industry, in particular, has gone through a lot of, innovation and transformation. In the UK, key players in the accountancy industry are the ones that are able to compete on the basis of skills and expertise.
Hence, outsourcing only for low costs isn’t a viable option – outsourcing should be a way for small-scale accountancy firms in the UK to search for expert-level accounting skills. That’s why the demand for offshore accounting experts from low-cost locations such as India, has skyrocketed in Western countries, such as the UK. Here’s why this unique India-UK accounting partnership makes sense.
A Healthy Long-Term Collaboration Between the Countries
In 2019, India invested in over 120 British projects which led to the creation of 5,429 new jobs for UK citizens. India only trails the US when it comes to foreign direct investments (FDIs) in the UK. As countries like the US, India, China, and Hong Kong step up their efforts to contribute to the UK economy, it’s only sensible for firms in the UK to do the same. The best way is investing in India’s large talent pool of accounting experts. The country produces tens of thousands of Chartered Accountants every year. It’s the safest investment for small-scale accountancy firms in the UK as Indian accountants come with assurances of quality.
Extremely Cost-Effective Services
Outsourcing to India, for small-scale accountancy firms in the UK, is a win-win situation. Not only do firms get access to high-quality accounting professionals, but they also get to cut their firms’ yearly expenditures. Significantly low labour costs in India means that small-scale accountancy firms in the UK get to record higher returns on their investments and essentially partner with experienced accounting professionals for half the fees. Here’s are some salary statistics that elucidate how less Indian accounting professionals charge on average for their services –
Job – Strategy Consulting at Accounting Firms
Title – Senior Consultant
Salary India – £23,052 per month with bonuses
Salary UK – £61,000 per month with bonuses
Job – Back Office Management
Title – Associate
Salary India – £8,364 per month with bonuses
Salary UK – £48,000 per month with bonuses
- Job – Financial Risk Management
Title – Associate
Salary India – £13,336 per month with bonuses
Salary UK – £52,350 per month with bonuses
The differences are staggering. Not all of these job titles apply to accountancy firms, but the difference in salaries still reflect that for five or even eight times less the fees, small-scale accountancy firms in the UK can execute important responsibilities like – accounts production, preparation of corporate/personal tax returns, payroll management, and routine bookkeeping. The best accounting outsourcing firmsuse the most advanced accounting technology like custom-built cloud-based job portals for safe data sharing or the latest accounting software tools like IRIS. So, the cost of outsourcing day to day responsibilities is minimal.
Governmental Support and Encouragement
India’s outsourcing industry worth approximately $150 billion. Accounting outsourcing is a key part of this industry. The growth of this sector is down to India’s favourable policies towards outsourcing, especially when it comes to highly skilled services. India’s attitude towards the UK’s accounting industry has also been very favourable.
Recently, the apex body for Indian chartered accountants (CAs), the Institute of Chartered Accountants of India (ICAI), recommenced the qualification reciprocity agreement with the UK’s apex body for chartered accountants (CAs), the Institute of Chartered Accountants in England and Wales (ICAEW).
This renewed pact has exciting implications for the UK’s accounting industry. It essentially means that accountancy qualification standards in both countries are consistent. A CA from India and a CA from the UK will have the same level of professional skills. Indian accounting professionals with Indian accountancy qualifications are also recognized by the ICAI as per this renewed pact.
This initiative by the ICAI and the ICAEW will benefit accounting professionals from both countries. Small-scale accounting firms will feel more confident about outsourcing. Since highly qualified accountants play a key role in providing business confidence, public trust in the UK’s accountancy sector will also increase.
The pact also means that accounting professionals from India will always stay up to date with any legislative changes in the UK. These offshore experts know every modification made by the Her Majesty Revenue & Customs (HMRC) office in the past few years. So, scale accountancy firms in the UK don’t have to worry about running into legal trouble or errors after outsourcing their taxation-related jobs to India!