Should we outsource bookkeeping to India/Sri Lanka

Should we outsource bookkeeping to India/Sri...

Didn't find your answer?

We are considering outsourcing our bookkeeping arm in the business to India (or somewhere similar) and would like feedback from Accountants who have already done or tried this.

We would like to know the following:

- How have you found the process of sending info

- The lead time

- Costs

- Recommendations/Pitfalls

- Do you pass on the saving to your client by reducing their fees?

- Do you disclose to your clients that you outsource their services?

- Does outsourcing actually save costs? Or is there increased costs due to quality control/correcting errors?

- Do you have appropriate data protection in place? How do you handle breaches?

We are actively looking into this and have found the following that appear to 'tick our boxes' but and would like feedback if anyone has used any of these companies before:

- Outspan

- Fintax

- Tellita

We are still really open to suggestions, so if you would recommend a company please let me know the details.

Replies (47)

Comments for this post are now closed.

avatar
By girlofwight
12th Aug 2013 17:16

Quality

Our experience was that although the cost savings were attractive, in reality they didn't materialise:

 

~ data prep to get it out there (even just scanning)

~ review and quality control

~ correction and finalisation.

IMV to make this work you need to be big enough to establish your own team out there with management from UK.

YMMV

Thanks (0)
Replying to atleastisoundknowledgable...:
avatar
By John_C86
13th Aug 2013 11:12

Thanks Girlofwight.

Which company did you use and would you recommend them?

 

We are looking at all possible avenues and looking at ways of becoming more competitive in the market. We are being undercut from competitors and the only way that we can become more competitive is to reduce costs and like most firms labour is the main overhead.

 

We have been looking at software/scanning companies to send over the information and any recommendations would be greatly received.

 

We have approximately 400 bookkeeping clients which we are thinking of outsourcing, so don't believe this would be big enough to establish our own team.

 

Let me know your thoughts

John

Thanks (0)
Replying to DMGbus:
By petersaxton
13th Aug 2013 11:30

There is another way

John_C86 wrote:

We are looking at all possible avenues and looking at ways of becoming more competitive in the market. We are being undercut from competitors and the only way that we can become more competitive is to reduce costs and like most firms labour is the main overhead.

You haven't thought of cutting your prices?

How will you become more competitive by reducing costs? That will increase profits!

Thanks (0)
Replying to DMGbus:
avatar
By The Black Knight
13th Aug 2013 11:37

the price is

John_C86 wrote:

We are looking at all possible avenues and looking at ways of becoming more competitive in the market. We are being undercut from competitors and the only way that we can become more competitive is to reduce costs and like most firms labour is the main overhead.

You can always get things done cheaper the price is quality.

Never could see the cost savings myself?

You still have to pay a lady to feed the scanning machine and it's probably as quicker for her to enter the data here rather than scan.

Free trade? does India play that game then?

tiz bizzare that the most important function upon which everything else is built is given to the cheapest person in the organisation.

 

Thanks (0)
Replying to Locutus:
Red Leader
By Red Leader
12th Aug 2013 19:01

free trade

surely free trade is beneficial to the UK overall?

Thanks (1)
avatar
By User deleted
12th Aug 2013 19:55

Agree with John ...

... if every one outsourced overseas we would have rising a benefits bill and dwindling treasury income - I can't see that as beneficial to the UK economy.

 

Thanks (3)
Glenn Martin
By Glenn Martin
12th Aug 2013 20:17

I cannot see the benefit overall.
I would be surprised if it produced a cost saving overall for the reasons mentioned above, unless your volume was huge which I would imagine yours is not. By the time you have put the data in a form suitable to send to them then checked the data when it comes back I would be surprised if there is any saving. A good UK bookkeeper should be able to knock the work out for you at decent rate and overall good standard of work. Even a lot of PLC outfits are bringing their call centres back to the UK as the cost savings against the complaints they receive from customers no longer stack up. If you told your customers you outsourced your work they would either be not very happy about or expect a cost reduction from you, either one is not very attractive.

Thanks (3)
By petersaxton
13th Aug 2013 04:01

Madness

Why is this ever considered in the first place?

Some people realised this wouldn't be a good idea when it was first mooted. Other people realised it wasn't a good idea only after trying it.

I have no qualms against doing it from a moral point of view but I do have from an efficiency point of view for all the reasons mentioned by girlofwight.

 

Thanks (1)
avatar
By User deleted
13th Aug 2013 06:39

Agree with Peter

Morally, nothing wrong with it. For other reasons, just a big no.

Thanks (1)
By Steve Holloway
13th Aug 2013 08:09

I remember my first few weeks in this job ...

the work wasn't that difficult but I did make some howlers through simply not being familiar with UK commerce. Like the payments to Scottish Widows where I assumed that the client had missed an 'N' so I posted all the installments to repairs and renewals! I wonder how that sort of error is avoided if you outsource to an overseas outfit?

Thanks (1)
Replying to nick farrow:
Routemaster image
By tom123
13th Aug 2013 08:46

First job howlers.

Steve Holloway wrote:

the work wasn't that difficult but I did make some howlers through simply not being familiar with UK commerce. Like the payments to Scottish Widows where I assumed that the client had missed an 'N' so I posted all the installments to repairs and renewals! I wonder how that sort of error is avoided if you outsource to an overseas outfit?

In my first job, I remember getting the first 'red' electricity bill. I was convinced the whole factory would get cut off that day and it would all be my fault.

I also parked in the MD's space without realising.

I later learned that there is a black bill after a red one, and phone calls sort most things out.

My mum got a red bill at home once, and I think she thought it was almost next step prison - luckily I could reassure her.

Incidentally, my AP is run from our North American head office. Very clever ladies, but, even so, a lot of idiosyncrasies to point out - mostly on VAT

 

Thanks (0)
Replying to nick farrow:
avatar
By Spundry
14th Aug 2013 14:04

lol

Steve Holloway wrote:

the work wasn't that difficult but I did make some howlers through simply not being familiar with UK commerce. Like the payments to Scottish Widows where I assumed that the client had missed an 'N' so I posted all the installments to repairs and renewals! I wonder how that sort of error is avoided if you outsource to an overseas outfit?

LOL. I remember wondering who Travis Perkins was?

Thanks (1)
Replying to Matrix:
avatar
By The Black Knight
14th Aug 2013 15:43

I Know

Spundry wrote:

Steve Holloway wrote:

the work wasn't that difficult but I did make some howlers through simply not being familiar with UK commerce. Like the payments to Scottish Widows where I assumed that the client had missed an 'N' so I posted all the installments to repairs and renewals! I wonder how that sort of error is avoided if you outsource to an overseas outfit?

LOL. I remember wondering who Travis Perkins was?

I know that builder was doing a lot of entertaining rock stars!

Thanks (0)
By petersaxton
13th Aug 2013 08:24

Investigate

If even you are in the UK you need to know what the payments are for. It's not sufficient to make a guess. You need more information.

If I am doing an analysis on a spreadsheet I include a "Query" column and then ask in one go and then move to the correct column.

Thanks (0)
avatar
By macaulay147
13th Aug 2013 10:46

Training

I used to work for  a big 4 firm which had staff in India to do some of the basic audit work.

Worked well for getting job done overnight and being able to review the next morning. Was an inhouse team though so quality of work was very good, may have been marginal cost savings but my biggest problem with it was that they were doing the basic jobs that I would want my juniors to be doing to gain experience. One of their main tasks was casting and disclosure checking accounts which meant juniors would get very little exposure to reading financial statements and knowing what should be in them,

Thanks (1)
Replying to Wanderer:
avatar
By User deleted
14th Aug 2013 11:54

We all have ...

macaulay147 wrote:

my biggest problem with it was that they were doing the basic jobs that I would want my juniors to be doing to gain experience. One of their main tasks was casting and disclosure checking accounts which meant juniors would get very little exposure to reading financial statements and knowing what should be in them,

... different levels of morals, may be mine are too high, but this is the biggest reason to my mind why it is bad for UK plc (does anyone still say that?).

We see on here how hard it is for people to gain experience, this does not help and the end result of no junior staff is we end up with no suitable senior staff. This has happened in many trades where cheap qualified migrant workers have been favoured over apprentices and now we have a skills gap.

Ultimately, taken to extremis, you will just have accountants in the UK managed by salesmen, with no skills in the UK.

True globisation, if big business allows it will see a return to local areas providing goods and services for local markets as labour prices will equalise worldwide, but until this happens outsourcing, in my view, is extremely bad for the UK as a whole as the smallbenefits for a few results in increased taxes  for those earning  to pay for a englarged benefits bills for those who can't as all suitable work has been exported!

Thanks (1)
avatar
By leicsred
13th Aug 2013 11:24

We did try this too for about a year on a reasonably small scale, we found that whilst the working papers were of a good standard, due to the time and cost involved in sorting the jobs out, scanning them, putting them back together again then it just wasn't saving us any money. Given the cost per hour they wanted it ended up more expensive than automating more in the UK and having on site people.

Added to this we did have a few issues with mis-postings, especially on farming, not surprising, but when we have people on site they can just ask quickly rather than have to try and sort it all out at the end.

To summarise, for us, it sounded like a good idea, but in reality the down side outweighed the good side.

This was for accounts production, so for regular monthly book keeping it might be better as there would be less mis posting as there would be more familiarity after a few months.

Also if you are paying per hour be careful with your budgets as we were just charged whatever the budget we put on was, we experimented by halving some budgets and they were still done for that in all but one case, so don't be too generous on your budget, they will tell you if it is too low, but maybe not if it is too high.

 

 

 

 

Thanks (0)
By petersaxton
13th Aug 2013 12:47

What I find

is when I actually get round to doing accounts and tax returns it doesn't take long at all.

Getting the information seems to take longer.

Thanks (3)
avatar
By Sheepy306
14th Aug 2013 11:06

You have 400 book-keeping clients, sounds like an awful lot to me. You must surely already be benefitting from economies of scale, high volume low margin work can still be extremely profitable, I have law firm clients that work exactly on this basis. How are your competitors undercutting you? What are they doing that you're not? If you have London offices with London salaries then move the operation up north where rents and salaries are lower. Do you have too many managerial staff, low productivity, poor technology, or are you simply charging your clients too much and you're making too big a profit? There must be explanations for this and ways in which you can cut costs without having to outsource.

Having said that, In a previous employment we did trial outsourcing book keeping to Pakistan, on the whole it was unsuccessful for the reasons already mentioned by others.
If you have 400 book-keeping clients then I would suggest however that that is more than sufficient to establish an office in India etc and ensure quality, you then need an apprentice type employee in the UK to feed the scanner all day long! And then another one when he leaves after the first week.

Thanks (1)
avatar
By tony77s
14th Aug 2013 11:10

It is never worth compromising your levels of service as reputation is everything.

Thanks (0)
avatar
By Kaylee100
14th Aug 2013 11:41

I agree Tony 77s

Quality and customer service is everything. Even if profits have to sometimes take a dent.

Thanks (0)
By petersaxton
14th Aug 2013 12:08

The main problem, in my view

is the closing of grammar schools.

Now schools seem little more than child minding centres for the majority of children.

The A level exams seem like my O levels when I took them in the 60s'.

Employers don't want to do the school's work.

Thanks (4)
Replying to Portia Nina Levin:
avatar
By The Black Knight
14th Aug 2013 13:10

all Mr average

petersaxton wrote:

is the closing of grammar schools.

Now schools seem little more than child minding centres for the majority of children.

The A level exams seem like my O levels when I took them in the 60s'.

Employers don't want to do the school's work.

all have to be Mr Average.

they are all A grade students if you notice (even the D's)

Government workers don't do excellence. I think it would be offensive to them that is why the world needs to be dumbed down.

Thanks (0)
avatar
By User deleted
14th Aug 2013 12:23

I agree, OGA

We all have different morals, but my argument is with those that adopt the simple "they're taking our jobs" stance. To have any credibility, those making such remarks presumably refuse to buy foreign-made goods, would immediately stop all immigration and would send existing immigrants and asylum-seekers "back home".

There are plenty of good reasons not to outsource - in my view, the "protect our jobs" argument is not one of them.

Thanks (2)
avatar
By Eve 2206
14th Aug 2013 12:47

India!

Many of the people undercutting accountants now are in the UK but not UK origin. It means also that new start ups like me are having to compete with them.  I refuse to do bookkeeping for £8 per hour or thereabouts.  I would sooner stack shelves at Tesco (but they laughed when they saw my CV when I applied for work).  By outsourcing abroad you aren't allowing cheaper (but not too cheap) UK firms to grow.  Advertise the contract in the UK and see what response you get.  There are many qualified accountants and bookkeepers needing the work in the South East.

Thanks (0)
avatar
By The Black Knight
14th Aug 2013 12:54

It does avoid:

Money laundering reporting issues

RTI

Auto enrilement

HR and employment law

Minimum wage

Holiday and sick

elf and saftey

fire regulations

employees driving skills

and other [***] wiping duties that take up 4 days of the working week

Premises

Rates

NIC

that's where the cost saving will be

So it fits with the governments intention of moving all our industry abroad. Perhaps we can move HMRC to india too.

as BKD says there are valid arguments against outsourcing but these would be a long term issue and less measurable in the short term.

You've talked me round I'm off to india and the weathers better!

Thanks (0)
avatar
By User deleted
14th Aug 2013 14:38

Kinda agree ...

... I buy as local as possible, make good use of farm shops and farmers markets - not always easy with mis-leading packaging but do my best.

I would stop all immigration and only allow on a strict points based system along the lines of Australia (whether EC or not).

I don't think you can send home legal immigrants, it would like being told you can't drive any more as the driving test has changed since you passed it, I did however say "migrant" workers (mercenaries), not immigrants (settlers). I do think the right to stay should be initially provisional, for 5 years. If a police caution (yellow card) is received in that time, probation to be extended by 5 years, a conviction to be immediate deportation (red card). 

Asylum seekers should be dealt with properly and fairly, but quickly.

Agree muchly with Peter, but further, university status should be returned to "proper" universities only and be stripped from poly's and tech colleges. Nothing wrong with them but we should celebrate differences and trades should be as appreciated as academia. There should only be @ 10% going to university, anything else makes it a mockery, but there should be sensible work based alternatives with tax incentives if necessary as 1 million unemployed youngsters is criminal neglect and a squandering orf resources.

I was reading they want to make modern langauges easier as only 1/14 getting A* opposed to 1/6 in maths - er, hello - surely maths should be made harder, I think 1/14 for an A* acceptable, 1/6 getting A* shows A* worthless.

The point of exams is to rank, to me having grades is pointless and divisive - why not just give the mark as a %age, then everyone knows where they stand. Even ACCA saw the light and started using that system some 28 years ago!

 

Thanks (2)
Locutus of Borg
By Locutus
14th Aug 2013 13:15

I remember back in 2001

When the internet was fairly new, there was a reasonably sized firm (I forget their name now) that must have been one of the pioneers of outsourcing and I think their whole business model was built upon it.  They were often mentioned in Accountancy Magazine.

Then around 2003 I heard they had gone out of business.

I figured if they can't make money out of outsourcing, then probably none of us small guys ever will.

Thanks (0)
Big Daddy's Diner
By mookgirluk
14th Aug 2013 15:56

Fast, Good, Cheap - Pick 2

Good & cheap will not be fast.

Good & fast will not be cheap.

Fast & cheap will not be good.

Thanks (0)
Red Leader
By Red Leader
14th Aug 2013 16:03

Travis Perkins

the slightly uncool country and western singer from Northampton.

Thanks (0)
Glenn Martin
By Glenn Martin
14th Aug 2013 19:46

Try an Apprentice
And give a kid a chance. The government has loads of support for this and it is a great way to
Take on staff. Young kids have great IT skills if nothing else and could be trained to do great data input. The rate of pay at £2.65 must be cheap enough to make a margin and a few years invested in him could produce a star for the future.

Thanks (1)
Teignmouth
By Paul Scholes
14th Aug 2013 23:43

At 400 BK jobs you'd be daft not to give it a go

Routine, high volume compliance work is perfect for outsourcing, be it to India or Ipswich and it sounds like you have sufficient to be able to make a selection and give it a go on a trial basis.

Iris Outsourcing for example have a huge facility with highly trained people who can do anything from payroll to iXBRL and if I had my time again, and high volume stuff, I'd certainly consider it.

Strangely enough, cost would not be the prime concern for me, it would be the possibility of turning around boring repetitive work with little if any grief and the ability to then sell clients what I and my firm should be selling.

The above stuff on immigration and not doing something with matey over there because there's water or a line on a map between us smells nasty. There is no such thing as a true Brit and our infrastructure, security and wealth was built by pillaging and suppressing other countries....what goes around etc.

 

Thanks (1)
avatar
By daveforbes
19th Aug 2013 18:11

@peter and @oga and easy A levels

Easy A levels ? Have you taken a look at an A2 paper recently in a subject like maths, further maths, physics, chemistry ?

Here is a one of the maths (rather than further maths)  compulsory papers ...

http://filestore.aqa.org.uk/subjects/AQA-MPC4-QP-JUN12.PDF

There is even an easy interest rate question thrown in at 4 ! Bear in mind you won't get the marks unless you show your working.

Drop 1 mark per question and the A* is gone, as is your entry to a top unviersity !

Often you get relatively easy questions or parts of questions quoted in the press. If you can only do the easy ones you are going to get an E or a fail. 

re. "they should just have a % not a grade." The grades are a %

A* = 90%

A = 80%

B = 70% etc.

You also get given your % so that you know if your A/A* was a scrape or with a safe margin. Top universities may request it to help sort the 90.1% A* from 99% A*, For example the average successful Cambridge applicant has an average of over 95%

 

Thanks (1)
Replying to atleastisoundknowledgable...:
Tom McClelland
By TomMcClelland
19th Aug 2013 20:55

Grade percentages

daveforbes wrote:

re. "they should just have a % not a grade." The grades are a %

A* = 90%

A = 80%

B = 70% etc.

Those percentages are based on capped renormalised scores, I believe. They aren't the required raw percentages based on (raw marks scored / total raw marks available)

Thanks (0)
Sarah Douglas - HouseTree Business Ltd
By sarah douglas
19th Aug 2013 18:59

Why not support Bookkeepers in the ICB

There are a lot of bookkeepers in the ICB who would be more than happy to be involved with you.  You can agree a fee with your local bookkeeper who all compete at various levels and prices.   Why not give the ICB a ring and asked to speak to Sobi or Mathini and they would be more than happy to see if they could help.  ICB has a large amount of branches so it is very easy to localise it through the Branch leaders. I am the Branch leader for Scotland at the moment.  

The ICB number is 0845 060 2345    or 020 7398 4440

Thanks (1)
avatar
By User deleted
19th Aug 2013 20:48

Back in the day ....

... when I was at school grades were given in bands, not absolutes, so the top 10% would get A's etc. It always struck me as much more useful, therefore whether one year was easier than another was irrelevant, as you were judged in relation to your peers, which is all that really matters! 

Thanks (0)
Sarah Douglas - HouseTree Business Ltd
By sarah douglas
19th Aug 2013 23:32

does it matter what the grades are if a young person is good

Hi 

I took on a girl from Stirling University and she was fantastic she never once moaned about what I was paying her as she really did deserve more .  After some training, her work was fantastic surely that is more important then looking at their grades which I did not do for her school or her University. She was a young girl just wanting to get on the ladder.   I am really happy to say after working with me for a few years  she has just got a great job in one of Scotlands Largest CA firms . I do miss her but I am glad I gave her the opportunity and that the future looks bright for her.   I told her she owed me when she starts earning millions.   I actually learnt  a lot from her also. 

Thanks (1)
avatar
By Jim100
19th Aug 2013 23:12

double whammy

I do have a greal deal of experience of outsourcing work to India but while indeed their are tremendous benefits and economies as well as some concerns on the quality of work produced and lack of initiative and sophistication. 

What makes me sad UK Accountants are taking a double whammy. First that many overseas accountants have come over and taken Jobs when there is already a surplus of accountants. Secondly, work is easily being moved to countries like India.  I do worry if it continues the position of accountants in practice and industry will become even more difficult as it is already.  It will only get worse.

Thanks (1)
avatar
By User deleted
20th Aug 2013 08:32

And the data protection issue ...

Having done a search of this thread (ctl F) there is only only mention of data protection and that is by the op - (although the search may have missed some references to data protection)

'.. Do you have appropriate data protection in place? How do you handle breaches? ..'

So in 38 comments, presumably no-one else regards data protection as an issue - interesting?

Thanks (0)
avatar
By User deleted
20th Aug 2013 23:24

For me ...

... data protection is only an issue if you outsource overseas, it is not a consideration in reaching that decision

For my reasons stated I don't think anyone should outsource overseas therefore I did not waste my time expanding on data protection.

 EDIT - I would emphasise, I mean additional DP over that which is currently undertaken when work done in house, which to me is a given for an ACCA/ICAEW firm, and hopefully for any "professional" firm of accountants..

Thanks (0)
avatar
By Sheepy306
20th Aug 2013 21:23

@JC
If data protection is the first thing that someone thinks about before even considering whether the project is a viable Business decision, then I would suggest that they may struggle in business generally. Data protection should quite rightfully be given consideration but that's what we implement systems and controls for, and have regulatory bodies and ICO etc.
Personally I wouldn't outsource overseas as it doesn't fit in with my types of client and work (eg I don't do book-keeping or large payroll etc) but I do think there's a market for it and that if it's well managed then it can work.

Thanks (0)
avatar
By rushabh_s_shah
25th Feb 2014 07:13

Bookkeeping in India

There are many reasons to outsource books to India: 

1. Cost Savings: 

2. Increase in core competency of business:

3. Risk Management: 

4. Professionalism in Management:

5. Reduced Infrastructure cost: 

6. Addressing talent Shortage:

7. Innovation:

Rayvat Accounting Specializes in Outsource bookkeeping services on virtual basis. 

http://www.rayvataccounting.com/

 

Thanks (0)
avatar
By JohnNike
05th Nov 2014 15:51

I was recommended to try Integra Outsourcing, by a friend of mine who is a tax assist franchisee. I have been using them for the past 6 months and I must say I am very happy so far. They do all my work upto TB and so far no complaints.

Of course the moral angle of outsourcing is debatable, but as a small business, my priority is to stay myself afloat and make some money. Outsourcing helps me achieve both. Try them and see for yourself.    

Thanks (0)
avatar
By puneet.nanda
16th Jul 2015 15:15

Outsourcing of Book keeping

Please get in touch with me for book keeping services@ [email protected] to save on Book keeping cost.

Thanks (0)
avatar
By edhy
22nd Jul 2015 06:51

Available for low volume outsource work

Firms outsourcing routine work will free resources for more value added work for their clients. UK economy is at much higher productivity level compared to say Pakistan, which will further increase by outsourcing while benefiting Pakistan economy. It is better to provide work in underdeveloped countries than aid (by UK Government).

I am FCA from Pakistani Institute. My son is ACCA affiliate. We both are working full time, so I would like to take outsourcing work on small scale at first. If it works out, we can leave our jobs to concentrate full time on outsourcing work. It can be expanded by taking on further staff if volume of work demands.

I have long work experience in Pakistan. I understand that outsource work will require new learning, which will be overhead for work provider in UK, the costs which can be compensated by very low charges initially. Later on wage differential will continue to be advantageous for both parties.

The work can comprise bookkeeping, accounting, routine taxation and any related work. I would repeat that to begin with I will prefer low volume work on continuous basis. I am ready to accept very low charges during our learning curve. Any queries are welcome.

My Linkedin ID is: Zubair Edhy

Email: edhy @ iname . com (delete spaces, this is to stop Webbots)

Regards

Zubair Edhy

Thanks (0)
By indiaoutsource
29th Feb 2016 06:33

Yes you can outsource you bookkeeping services in India but I dont know about what's the cost bcoz different different company has different different cost. I want recommend to go with http://indiaoutsource.co they offers bookkeeping services with affordable prices.

Thanks (0)
avatar
By dhruv1270
28th Oct 2016 02:08

DASPL , Vadodara specialise in UK Accounting and Tax. Their current team exceeds 300 fully trained Accountants. Their fees are reasonable , service and quality is good. Do visit their website www.daspl.com.
They look after over 100 Firms of Accountants in UK

Contact [email protected] Kind Rgds Dhruv

Thanks (0)