Indian start-ups operate in a highly dynamic environment. Here, a high level of agility and constant innovation are the keystones of long-term success. In such a scenario, it often becomes difficult for start-ups to take care of regular finance and operating operations. But Finance and Accounting are equally important to drive the long term growth of a start-up enterprise. This is why a large number of such start-ups are relying increasingly on outsourced accounting services. Today, we are going to take a look at the various benefits of hiring an accounting outsourcing firm to add inertia to the growth trajectory of your Indian start-up.
Higher Cost Savings
While appointing an accounting outsourcing firm might initially seem very cost intensive, it can lead to massive savings in the long run. When a start-up opts for an in-house finance department, they have to incur a variety of costs, including salaries, training, software tools, recruitment tools, office space, and more. Start-ups usually operate under a stringent budget and are always on the lookout to optimise their expenses. Herein lies the benefit of opting for accounting outsourcing companies. When start-ups opt for outsourcing companies, they don’t have to bear unnecessary overhead. Rather, they have to only pay for the specific services they require, such as payroll processing, bookkeeping, GST filings, etc. Often, these companies offer flexible packages to choose from while helping start-ups focus fully on core business activities.
Access To Skilled Workforce
When you work with accounting outsourcing companies, you can benefit from the expertise of skilled professionals. Such experts are proficient with the Companies Act, Income Tax laws, and Indian accounting standards. Other than having massive knowledge, they stay updated on various regulatory changes that might affect the compliance of a start-up firm. When start-ups hire the services of an accounting outsourcing firm, they can gain prompt access to financial analysts, accountants, compliance specialists, and more. These highly skilled experts use highly advanced automation tools such as Tally, Zoho, QuickBook,s and more for streamlining operations and offering real-time reporting.
Higher Flexibility
It isn’t uncommon for Indian start-ups to gain economies of scale within months. But during this time, the degree of financial complexity grows as start-ups have to deal with the growing number of transactions. You can take the example of a business expansion during which start-ups need to provide a due diligence report, detailed financial reports. Rather than hiring a separate Finance and Accounting department, startups can seek the help of outsourcing companies that can help scale businesses scale operations without disrupting their workflows.
Increased Risk Management
The Indian regulatory framework is evolving constantly, with new rules being laid out rapidly on ROC filings, TDS, ESOPs and other statutory requirements. Even the slightest non-compliance can lead to heavy penalties and severe reputational damage for the start-up. An accounting outsourcing firm implements rigorous internal controls and undertakes constant compliance checks to minimize errors and detect discrepancies early. All the regulatory updates are constantly monitored by experts so that the start-up entrepreneurs don’t have to worry any further on timey filings and adequate disclosures.
Offering Better Financial Insights
Start-ups need to take data-driven decisions, and a skilled finance and accounting partner can offer financial insights that can help the entrepreneurs understand profitability, cash flow trends, budgeting, and working capital needs. As a result, the founders can make informed decisions regarding hiring, product pricing, capital expenditure, and more. This can help start-ups gain a higher degree of financial visibility as they are offered regular MIS reports.
Greater Focus On Main Business Activities
Entrepreneurs have to deal with multiple operations ranging from marketing to product development, customer acquisition, and more. It becomes difficult for the entrepreneurs to handle both finance and compliance tasks single-handedly. Seeking the services of accounting outsourcing companies allows the entrepreneurs to focus more on strategic growth areas. The outsourcing experts will take care of all the departments, from tax returns to bookkeeping, so that the founders can look after customer engagement.
Higher Confidentiality
The different companies offering outsourced accounting services rely heavily on secure data management. They use secure cloud storage, encrypted communications, and sign NDAs so that start-ups don’t have to worry about data safety. Most of these outsourcing firms are ISO-certified, and they comply with various data protection standards for guaranteeing data integrity.
Geographical Flexibility
Remote work has become extremely common, and the different accounting outsourcing companies can cater to start-ups around the globe. This is allowing start-ups located in Tier II and Tier III cities to gain access to world-class services much like their metropolitan counterparts. The dual combination of different cloud-based collaboration tools and digital platforms has helped the outsourcing companies to overcome the boundaries of geography while offering professional services.
Indian start-ups are facing massive competition in a highly resource-constrained environment. In such a backdrop, they will need partners like an accounting outsourcing firm that will guide the start-ups with the right level of expertise and ensure optimum compliance for driving long-term success.
