Before we dwell on outsourcing accounting, let’s first understand accounting. What is accounting and why is it so important?
Accounting, as defined by AICPA is “The art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof”.
Thus for any business, accounting would mean:
(i) To record all the transactions of monetary nature, that is undertaken on a daily basis.
(ii) To properly classify the transactions under groups, so that the final report does not look too cluttered.
(iii) To summarize all the transactions so grouped under proper account heads in a manner that is meaningful and gives insight to the financial results of the business.
In short, accounting helps a business in understanding if it is making profit or loss.
A business can safely segregate its operations into two heads:
Core operating area and Non-core operating area (resulting in what is known as overhead)
For a trader, buying and selling of goods is what is covered under core operating area while maintaining books of accounts is an overhead. Similarly, for a manufacturer, buying raw materials, processing them and then selling the finished goods are all covered under the core area of operations while the payroll processing or maintaining of books of accounts is a non core operation which leads to overhead.
Although termed as non-core area of operation, these tasks are very important for the proper running of the business. Imagine for a moment that a trader does not maintain books of accounts. How would he be able to know how is his business doing? How would he be able to know how much he owes to his creditors and how much his debtors owe him? How would he be able to know which type of expense can be controlled and which type of expense to incur to increase sales?
Thus, accounting though is an overhead, is vital for any business. Having said that, it is pertinent to note that everyone cannot be expected to be good in accounting. A businessman is supposed to do what he knows best: do business. Accounting shall be left aside for people who are trained for doing just that: accounting. This is where Accountants come into the picture for any business.
Until the advent of outsourcing concept, businessmen had just two options: either do the accounting by themselves or hire an in house accountant. Since the first option is not feasible, normally businesses used to go for option number 2. But this option entails increasing the overhead of the business since the salary of the accountant, the cost of the system to be used by the accountant and all other costs associated with a full time employee under the roof had to be borne by the business.
However, with the advent of outsourcing, businesses have an option to reduce this overhead as well! Outsourced Accounting providers are experts at providing accounting services to various kinds of businesses. They employ accountants to service different clients. Thus, they have the bandwidth and the technical skills needed to maintain books of accounts of any business. Besides, since they leverage on business of scale, their costs would be half of the cost incurred by a business in having an in-house accountant.
APT Services is an outsourced accounting service provider, based in India and managed by a group of Indian CPAs. Being in India, there are a few advantages:
(i) There is a time zone difference between US & India. Outsourcing to India means that the work gets done on an overnight basis. Meaning, if the documents are sent for accounting on Day 1 at say 5 pm in US, the Indian outsourcer will work on the file the same night (which actually is day in India). By the time the US business wakes up, the books are updated! Which in-house accountant would give this kind of benefit?
(ii) There is a foreign exchange difference between Indian rupee and US dollar. This allows Indian outsourcers to price their services at US rates which are very low, per US standards.
(iii) Indians have the knack of speaking better English than any other nation in this part of the world. This makes communication between the US business and Indian outsourcer easier.
Being managed by Indian CPAs, APT has a distinctive advantage over the other outsource accounting providers.
(i) Being qualified accountants, they understand accounting far better than anyone else.
(ii) They work under strict ethical guidelines and hence are much safer to work with, than any other outsourced accounting provider.
(iii) They provide the best quality services at the lowest price in the market.
Thus, it is hardly surprising that businesses in US flock to APT Services for outsourcing bookkeeping, payroll and tax preparation services.