Most businesses in Bangalore aren’t struggling with sales; rather, they’re struggling with financial management, compliance issues, and poor financial record-keeping. Many founders face issues when they receive a penalty notice or struggle to raise funds.
You might not have realized that outsourcing accounting services for SMEs can help solve these problems without the added cost and stress of building a full in-house finance department.
In this blog, let’s take a look at why outsourcing your accounting function is important for many startups in Bangalore, what the primary benefits are, and how to choose the best accounting firm.
What Does Outsourced Accounting Mean for SMEs?
Working with an accountancy firm means that you give up control of the financial aspects of your business, like bookkeeping, GST, TDS, payroll, and financial statements, and transfer the management of these activities to an accountancy firm that has qualified professionals as employees.
Difference Between In-House Accounting and Outsourced Accounting
| Factor | In-house Accountant | Outsourced Accounting |
|---|---|---|
| Monthly Cost | High, which includes salary, PF, benefits, and software. | Lower, flexible. |
| Expertise | Limited to one person's knowledge. | Team of CA, tax, and compliance experts. |
| Compliance Support | Basic, often reactive. | End-to-end, proactive. |
| Scalability | Difficult | Easily scales with your business. |
| Technology Access | Limited, often manual. | Use Cloud tools like Tally, Zoho Books, and QuickBooks. |
What Services Are Usually Included in Outsourced Accounting Services?
Outsourcing bookkeeping creates an opportunity for you, as the owner of the small business, to have better control over your financial operations, without needing to employ a CPA full-time.
- Bookkeeping: Keeping track of daily income and expenses.Â
- Comply with your GST obligations by filing GST returns.Â
- Complying with TDS: Withholding taxes from employees and contractors. Â
- Processing payroll: Determining how much salary to pay each employee, along with benefit contributions like PF and ESI.Â
- Developing Financial Reports: Profit and Loss statements, Balance Sheets, and Cash Flow Financial Reports.
Actax India can be your outsourced accounting service provider. We use cloud-based accounting software such as Zoho Books, Tally, or QuickBooks and are led by a CA who has successfully assisted over 150 startups, medium-sized businesses (MSMEs), and foreign companies in Bangalore.
All In One Accounting For Small Businesses in Bangalore
Why SMEs in Bangalore Are Struggling With Accounting?
Outsourcing bookkeeping creates an opportunity for you, as the owner of the small business, to have better control over your financial operations, without needing to employ a CPA full-time.
- Bookkeeping: Keeping track of daily income and expenses.Â
- Comply with your GST obligations by filing GST returns.Â
- Complying with TDS: Withholding taxes from employees and contractors. Â
- Processing payroll: Determining how much salary to pay each employee, along with benefit contributions like PF and ESI.Â
- Developing Financial Reports: Profit and Loss statements, Balance Sheets, and Cash Flow Financial Reports.
Actax India can be your outsourced accounting service provider. We use cloud-based accounting software such as Zoho Books, Tally, or QuickBooks and are led by a CA who has successfully assisted over 150 startups, medium-sized businesses (MSMEs), and foreign companies in Bangalore.
Benefits of Outsourced Accounting Services for SMEs
Outsourcing your accounting is the most feasible business solution for growing startups. Many founders just firefight by doing everything by themselves, even in areas where they don’t have expertise.
Just by shifting your internal accounting operations, which are managed by the founder team, to expert accounting teams can drastically improve your focus on business development while offering plenty of other benefits for business growth.Â
1. Lowers Business Expenses
In-house accounting costs extra because you have to pay the employee’s salary, provide them with training, buy accounting software, and offer various benefits. But outsourcing services will save your company a lot, and you’ll still receive support from an expert.
2. Have Access to Expert Accountants
Outsourcing lets you have an entire team of experienced accountants. Each person will be responsible for tasks such as bookkeeping, determining what to charge for GST, conducting payroll, and doing taxes, helping keep your business financially sound.
3. Increase GST and Tax Compliance
Missing GST or tax filing deadlines may result in penalties and legal issues. Outsourced accounting services can help ensure timely filing of all applicable returns, keeping you compliant across all accounts.
4. Using Cloud Software and Automation in Accounting
Modern-day accounting practices utilize cloud-based accounting software such as Zoho Books and QuickBooks. These software applications provide businesses with real-time access to financial data, automatically track transactions, securely store financial records, and enable remote access to their accounts, all at once.
5. Minimizing The Risk Of FraudÂ
An accounting team uses established systems and processes to minimize errors and prevent fraud. Periodic reviews and reconciliations ensure that all financial data is accurate and up to date.
6. Provides Clean Financial RecordsÂ
When your company has clean, accurate financial records, it is essential to conduct audits, obtain financing through a bank loan, or attract an investor.
With outsourcing services, you will have accurate, timely reports and compliance with all regulations, so you are always prepared to secure financing or withstand an audit.
Case Study: How a D2C E-commerce Brand Solved Cash Flow Problems?
A D2C e-commerce brand sells through Amazon and Flipkart. Even though they are growing their sales, they continue to run out of cash. The primary problem was that, although marketplaces take 30-45 days to pay the brand, they still expect payment from the brand within 15 days of shipment and cannot be paid before then, leading to a cash shortage.
The outsourced accounting team supported the brand by managing its accounts receivable and planning its marketplace cash flows in line with its payment terms. The team also created a new 13-week cash flow projection to help the brand track cash inflows and outflows.
The brand clearly understood its cash flows by negotiating longer payment terms with suppliers, reducing cash flow issues by approximately 70%, and avoiding the need for short-term financing through loans or credit.
How to Choose the Right Outsourced Accounting Partner in Bangalore?
This is quite confusing & pushes you into a dilemma. Which company to choose? Whether big firms or small firms? What should they offer when I choose them?
I know where you are standing now. Below is a quick list that helps you decide how to choose the right accounting firm to outsource accounting services.Â
- Select a company that can better understand your industry because each business has unique accounting needs.
- Find a company that does everything in one spot, like GST, TDS, ROC filing, payroll, PF, ESI, and PT
- Ask them how often they provide important financial reports and what types of reports they provide. MIL reports, Cash Flow Reports, P&L Reports, and Budget Reports are essential for monitoring your business’s growth.
- Confirm that their information is secure. Your financial information must be kept secure through appropriate backup and access controls.
- Choose a company that specializes in cloud accounting and has expertise with Zoho Books, Tally Prime, QuickBooks, etc., so you can have access to your data whenever you need.
- Finally, make sure to get a dedicated support specialist, so you have quick, reliable help.Â
With Actax India’s bookkeeping services for small businesses in Mumbai & Bangalore, you get dedicated support in Bangalore with complete compliance services and cloud accounting.
Here you can find the list of the top 10 accounting firms in Bangalore specialized in offering tailored & structured services for small businesses.
Conclusion
Starting your own company is tough work, and you need to use all of your resources wisely when making decisions about your company’s growth. With that being said, the real question isn’t Do I have the money to outsource my accounting? But rather, can I afford not to?
If your accounting is out of order, your books aren’t up-to-date, or you’re spending too much time on compliance issues. This would be the perfect time for you to get things under control.Â
If you are looking for accounting services for startups in Bangalore, connect with experienced professional accountants at Actax India to start your growth journey today. And get a free 15-minute consultation to discuss how we can effectively support your company’s growth.
