Introduction of

Accounting
Outsourcing and
Export
Entrepreneurship
skills
CA Ankit Chugh
Who am I
• 17+ years of experience of working with
professional services firms
• Worked in India, UK & Germany
• CA (ICAI), EGMP from IIM-L & LSSGB
• Executive Coach
• Certified AI trainer
• Economic Times Young Leader
• Runner & Photographer

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Presentation Introduction to Accounting Outsourcing
Explaining the concept of accounting outsourcing and why it is
Overview becoming increasingly popular among companies of all sizes.

Outsourcing from India: Advantages & Challenges

Discussing the advantages of outsourcing accounting services
from India, including cost savings, skilled labor, and access to
advanced technology along with challenges

Technology and AI
Discussing how the landscape is changing, and usage of
technology and AI is becoming the corner stone of all
professional services firms

Regulatory landscape & Export entrepreneurship

Introduction to the landscape and skills required for export
entrepreneurship
Question – Who all have outsourced work?

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Q1. Slido #2129938

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Why Outsource Accounting
(traditionally)?
Cost Reduction
Outsourcing accounting functions
can reduce costs significantly for
companies, allowing them to save
money on salaries, benefits, and
other expenses associated with
hiring an in-house accounting
team.
Outsourcing: From Cost Arbitrage to Quality
Arbitrage and Staff Augmentation

1. Ask 2. Shift 3. Solution

Businesses are looking The outsourcing market Outsourcing can help

for high-quality services is shifting from being businesses reduce
and access to specialized solely focused on cost costs while still
talent, which savings to include quality accessing quality
outsourcing can provide. arbitrage and staff talent and specialized
augmentation. services.

4. Benefit

a. Access to a large pool of highly skilled professionals and the latest technologies.
b. Can improve efficiency by providing companies with access to specialized accounting
expertise, streamlined processes, and advanced accounting technologies
c. Allow companies to focus on their core business functions, such as sales, marketing, and
product development, by freeing up time and resources that would otherwise be spent
on accounting tasks.
Opportunity of Outsourcing from
India
Skilled Professionals
India has a large pool of skilled professionals in various fields, including
accounting and finance. Outsourcing to India means access to a diverse talent
pool with expertise in the latest accounting tools and technologies.

Cost Advantages
Outsourcing accounting functions to India provides significant cost advantages.
The lower cost of living and wages in India means that businesses can reduce
their accounting costs by up to 50%.

Favorable Business Climate

India has a favorable business climate for outsourcing, with a robust legal and
regulatory framework, stable political environment, and a strong commitment
to intellectual property protection.

Young, Agile & English-speaking population

Key Markets for Indian CAs

1 United States
High demand for CAs, regulatory and tax advisory roles.

Europe
2
Compliance and advisory roles, impact of Brexit.

Asia Pacific
3
Emerging markets, financial services expansion.

Middle East
4
Financial hubs like Dubai, tax-free environment.
The Growing Demand for Accounting Services in US
1.Revenue Growth: The industry saw a healthy 6% compound annual growth
rate (CAGR) in 2023, with projections indicating continued growth through
2026. This growth is driven by the increasing demand for specialized expertise
and digital transformation.
2.Digital Transformation: The integration of AI, machine learning, and
advanced analytics is reshaping how firms operate. By 2025, it's projected that
at least 75% of a firm's revenue will come from digital technology. This shift is
crucial for maintaining competitiveness and meeting evolving client
expectations.
3.Mergers and Acquisitions (M&A): Firms are leveraging M&A to drive
revenue and productivity growth. This trend is expected to continue as firms
seek to enhance their capabilities and market presence.

1.Hiring and Retention: Recruiting and retaining talent remains a top

priority. Firms are focusing on hybrid work models and improving work-life
balance to attract and retain employees. 300k CPAs shortage
2.Economic Uncertainty: While economic uncertainty poses challenges,
firms are adapting by investing in technology and exploring new strategies to
maintain profitability
Question – Which countries have you outsourced
and what kind of work?

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 Sample activities that can be oursourced
Taxation Services Accounting and Bookkeeping Audit and Assurance Services Payroll Processing
• Preparation of Tax Returns • General Ledger Maintenance • Internal Audits • Payroll Management
• Tax Planning and Advisory • Accounts Payable and Receivable • External Audit Support • Payroll Tax Compliance
• International Tax Compliance Management • SOX Compliance Audits • Year-End Payroll Reporting
• Bank Reconciliations • Financial Due Diligence
• Financial Statement Preparation

Financial Analysis and Advisory and Consulting Regulatory Compliance Data Entry and Back-office
Consulting Services • SEC Reporting Support
• Budgeting and Forecasting • Business Valuation • Compliance with US GAAP • Data Processing
• Financial Modeling • Risk Management • FATCA Compliance • Document Management
• Cost Analysis • Forensic Accounting • Administrative Support
• Investment Analysis • Process Improvement Consulting

Technology and Software SOC Reporting

Support • SOC 1 - Overview
• Accounting Software Management • SOC 2 – Focus Areas
• Automation and AI in Accounting
ESG & Valuations • SOC 3- Summary Resourcing
Overview of SOC Reports
(SOC 1, SOC 2, SOC 3)
SOC 1 Overview
SOC 1 reports evaluate internal controls over financial reporting, ensuring
compliance and accuracy for financial statements.

SOC 2 Focus Areas

SOC 2 reports emphasize system and data security, covering key areas like availability,
processing integrity, confidentiality, and privacy.

SOC 3 Summary
SOC 3 reports provide a general overview of an organization's controls without
detailed information, focusing on public assurance.
Key Components and Criteria for
SOC Engagements

Planning SOC Engagements

SOC engagements necessitate meticulous planning to ensure that all criteria are
addressed before implementation.

Control Objectives
Defining clear control objectives is essential for the success of SOC engagements and
meeting compliance requirements.

Evaluation of Service Providers

Evaluating service provider controls is crucial to ensure they adhere to industry
standards and best practices.
Importance of SOC Reports for
Businesses
Assurance of Reliability
SOC reports provide assurance to clients regarding the reliability and quality of
service providers, fostering trust in partnerships.

Risk Management
These reports are essential for risk management, helping businesses evaluate and
mitigate risks associated with service providers.

Informed Decision-Making
SOC reports enable informed decision-making, allowing businesses to choose
partners wisely and confidently based on reliable data.
Q2. Slido #2129938

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Technological Advancements and
Digitalization

Cloud Computing Artificial Intelligence

The USA's advanced cloud computing infrastructure The widespread adoption of AI and machine
enables seamless data sharing, collaboration, and learning technologies in the USA's accounting and
remote access, allowing Indian CAs to efficiently finance sectors empowers Indian CAs to automate
manage their accounting services and client data. tasks, enhance data analysis, and provide more
insightful recommendations to their clients.

Cybersecurity Digital Transformation

The USA's robust cybersecurity measures and The USA's commitment to digital transformation
regulatory standards ensure the protection of across various industries creates opportunities for
sensitive financial data, giving Indian CAs and their Indian CAs to leverage cutting-edge technologies
clients the peace of mind they need to operate and provide innovative accounting solutions to their
securely. clients.
Question – Have you used AI and what kind?

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Q3. Slido #2129938

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Introduction to AI in Accounting
Outsourcing Services

Artificial Intelligence (AI)

AI refers to the simulation of human intelligence in
machines that are programmed to think and learn like
humans. In the accounting industry, AI is being used to
automate routine tasks.

Accounting Automation
AI is being used to automate routine accounting tasks,
such as data entry and account reconciliation, freeing up
accountants to focus on higher-level tasks like strategic
planning and decision-making.
What is AI?
AI refers to the ability of machines to
perform tasks that typically require
human intelligence, such as visual
perception, speech recognition,
decision-making, and language
translation.
AI in Accounting Outsourcing
Services
Automation of Routine Tasks
AI is being used to automate routine tasks in accounting outsourcing services, such as
data entry, account reconciliation, and financial reporting, freeing up time for
accountants to focus on higher-level tasks.

Accountants Focusing on Higher-level Tasks

With the automation of routine tasks, accountants in accounting outsourcing services
can focus on higher-level tasks, such as analyzing data and providing strategic insights,
thus improving the overall quality of accounting services provided to clients.
Benefits of AI in Accounting
Outsourcing Services
Increased Efficiency
By automating routine accounting tasks, AI can provide increased efficiency and
accuracy, allowing accountants to focus on higher-level tasks that require human
intelligence.

Reduced Costs
The use of AI in accounting outsourcing services can lead to reduced costs by minimizing
errors, improving accuracy, and streamlining the accounting process.

Valuable Insights
AI can provide valuable insights into financial data by analyzing large datasets, identifying
trends and anomalies, and providing actionable recommendations.
Use Cases of AI in Accounting
Outsourcing Services
Automated Bookkeeping
AI-powered bookkeeping systems automate the process of recording financial
transactions and updating general ledgers, reducing the time and resources required for
bookkeeping.

Streamlined Invoicing Processes

AI-powered invoicing systems use machine learning to automate the process of creating
and sending invoices, reducing the time required to generate invoices and improving
cash flow.

Data Analytics and Business Insights

AI-powered data analytics tools help accountants analyze financial data and generate
business insights, allowing them to make informed decisions and improve financial
performance.
Case Study 1: Budget research (Tax implications)

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Case Study 2: Technical Assistant (Revenue Recognition)

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Language and Cultural Barriers
Language Differences Cultural Nuances Bridging the Gap

While both India and the USA use The cultural differences between Providing cross-cultural training,
English as a primary business India and the USA can also pose establishing clear communication
language, there can be significant challenges. Understanding and protocols, and fostering open
variations in accents, idioms, and respecting these nuances, such as dialogue can help accounting
terminologies. Accounting communication styles, decision- professionals and Chartered
professionals must be prepared to making processes, and work ethics, Accountants navigate these
bridge these linguistic gaps, ensuring is crucial for building trust and language and cultural barriers.
clear and effective communication fostering successful collaborations. Adapting to the unique needs and
with their overseas counterparts. expectations of the client's market is
essential for delivering high-quality
services.
Regulatory Differences Between India and the
USA
1 Tax Regulations
The tax codes and reporting requirements in India and the USA differ significantly, posing challenges for
accounting professionals. Staying up-to-date with the latest tax laws and regulations in both countries
is crucial to ensure compliance and avoid potential penalties.

2 Financial Reporting Standards

Accounting standards, such as the Generally Accepted Accounting Principles (GAAP) in the USA and the
International Financial Reporting Standards (IFRS) in India, can vary widely. Bridging these differences
and ensuring consistent financial reporting is essential for successful outsourcing.

3 Data Privacy and Security

The data privacy and security requirements in India and the USA can also differ, necessitating the
implementation of robust data protection measures and adherence to local laws and regulations.
Ensuring the confidentiality and integrity of sensitive financial information is a top priority.
Pricing Models

Hourly Rate
Hourly rate pricing model charges clients based on the number of hours
worked. This model works well for businesses that need occasional support
and prefer to pay only for the work done.

Fixed Fee
Fixed fee pricing model charges clients a fixed amount for a specific service or
set of services. This model works well for businesses that require ongoing
support and want predictable costs.

Value-Based
Value-based pricing model charges clients based on the value of the service
provided. This model works well for businesses that require high-level
expertise and want to pay for the results achieved.
Export
Entrepreneurship

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Documentation Required for Export
Entrepreneurship: Business Registration
and Licensing
• Company Registration
• Register with the Registrar of Companies under the Companies
Act, 2013

• Export-Import Code
• Obtain an IEC from the Directorate General of Foreign Trade
• Mandatory for businesses engaged in export or import of goods
and services

• Service Tax Registration

• Register for Goods and Services Tax for service exports
Documentation Required for Export
Entrepreneurship: Financial Documentation

• Bank Account
• Maintain a bank account with an Authorised Dealer bank

• Foreign Inward Remittance Certificate

• A document issued by banks in India as proof of receipt of
payment in foreign currency
Documentation Required for Export
Entrepreneurship: Contractual Documents

• Service Agreements
• Define terms of service with international clients
• Includes scope, pricing, payment terms, and dispute resolution
• Non-Disclosure Agreements (NDAs)
• Ensure confidentiality and protection of sensitive information
• Project Documentation
• Maintain detailed documentation for each project
• Includes project plans, timelines, deliverables, and performance
reports
 Sample contract template – Best practices
Introduction and Overview Scope of Work Deliverables and Timelines Payment Terms
• - Purpose of the contract. • - Detailed description of the services to be • - Specific deliverables and their due dates. • - Pricing model (fixed fee, hourly billing,
• - Parties involved (Service Provider and provided. • - Milestone schedule, if applicable. retainer, etc.).
Client). • - Specific tasks and deliverables expected • - Terms for revisions or additional work. • - Payment schedule and due dates.
• - Date of the agreement. from the service provider. • - Late payment penalties or interest.
• - Any exclusions or services not covered • - Currency of payment and any exchange
under the contract. rate considerations.

Confidentiality and Data Security Intellectual Property Rights Warranties and Representations Liability and Indemnification
• - Obligations of the service provider to • - Ownership of the work product (whether • - Service provider’s guarantee on the • - Limitations on the service provider’s
protect client’s confidential information. the client or service provider holds the quality of work. liability.
• - Description of the data security measures rights). • - Compliance with relevant laws and • - Indemnification clauses protecting both
in place. • - Use of any pre-existing intellectual regulations. parties from third-party claims.
• - Non-disclosure agreements (NDAs) if property. • - Statements about the provider’s ability to • - Insurance requirements, if necessary.
applicable. • - Terms for licensing if applicable. perform the services.

Termination and Exit Strategy Dispute Resolution

• - Conditions under which the contract can • - Methods for resolving disputes
be terminated by either party. (mediation, arbitration, legal action).
• - Notice period for termination. • - Jurisdiction and governing law.
• - Procedures for winding down the project • - Procedures for escalation of unresolved
and transferring responsibilities. issues.
Opening a Business in US

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 Introduction

• Opportunity for Indian CAs to tap into a lucrative market

• Forming an LLC or Corporation in the U.S.
• Understanding and navigating legal and regulatory requirements
• Differences from the Indian market
• Detailed steps to establish an LLC or Corporation
• Key regulatory differences highlighted
• Comprehensive compliance checklist provided
Understanding Business Entities
in the USA
• Limited Liability Company (LLC)
• Flexible management and taxation
• Protects owners from personal liability
• Corporation (C-Corp or S-Corp)
• Formal structure
• Potential for raising capital through stock issuance
• Provides liability protection
• S-Corps offer tax benefits but have ownership restrictions
Steps to Establish an LLC or Corporation in the
USA: Choose a State for Registration

• Factors to Consider
• Each state has different laws, taxes, and fees
• Delaware, Wyoming, and Nevada are popular due to
favorable business laws
• Choose a state based on where you plan to do business or
your specific needs
• State-Specific Requirements
• Research the specific requirements and costs associated
with forming an LLC or Corporation in your chosen state
Steps to Establish an LLC or
Corporation in the USA: Name Your
Business
• Name Availability
• Ensure desired business name is available in state of
registration
• Most states offer online search tool to check name
availability
• Naming Conventions
• Name must include “LLC” or “Limited Liability Company”
for an LLC
• Or “Corporation,” “Incorporated,” “Corp.,” or “Inc.” for a
Corporation
Steps to Establish an LLC or Corporation
in the USA: Appoint a Registered Agent

• Role of Registered Agent

• An individual or business entity authorized to receive legal
documents on behalf of your business.
• Requirement
• Every LLC or Corporation in the U.S. must have a
registered agent with a physical address in the state of
formation.
Steps to Establish an LLC or Corporation
in the USA: File Articles of
Organization/Incorporation
• Articles of Organization (LLC)
• Submit to state's business filing office
• Includes basic information about LLC
• Name, address, registered agent, members'
names
• Articles of Incorporation (Corporation)
• Submit to state's business filing office
• Includes details about corporation
• Name, address, registered agent, shares,
directors' names
Steps to Establish an LLC or Corporation in the USA: Obtain an
Employer Identification Number (EIN)
• EIN is also known as a Federal Employer
Identification Number (FEIN) and is
required for tax purposes.
• The EIN is issued by the IRS.
• You can apply for an EIN online through
the IRS website.
• Non-U.S. residents can apply by
submitting Form SS-4 by fax or mail.
Steps to Establish an LLC or Corporation
in the USA: Open a U.S. Business Bank
Account
• Requirements
• EIN, Articles of Organization/Incorporation, and possibly a
U.S. address are needed to open a business bank account.
• Foreign Nationals
• Depending on the bank’s policies, a foreign national might
need to visit the U.S. in person to open the account.
Steps to Establish an
LLC or Corporation in
the USA: Comply with
State-Specific Tax • State Taxes
Requirements • Register for state taxes, including sales tax,
franchise tax, or unemployment insurance tax.
• Sales Tax
• Collect sales tax if selling taxable goods or
services.
• Register with the state’s Department of Revenue.
Steps to Establish an LLC or Corporation in the
USA: Obtain Necessary Licenses and Permits

• Business Licenses
• May be required at local, state, or federal level depending
on industry and location
• Professional Licensing
• Certain services, such as accounting, may require specific
licenses or certifications in the U.S.
Steps to Establish an
LLC or Corporation in
the USA: Draft an
Operating Agreement • Operating Agreement (LLC)
or Corporate Bylaws • Outlines ownership and management structure of
LLC
• Not mandatory in all states, but advisable
• Corporate Bylaws (Corporation)
• Rules governing management of corporation
• Covers shareholder meetings, voting procedures,
duties of officers and directors
Regulatory Differences Between India and the USA: Social
Security Number (SSN) vs. Aadhaar/ PAN
• SSN is used in the U.S. for social security
and taxation purposes
• Required for U.S. citizens or residents to
work legally
• Aadhaar is used for identification in India
Country Identification Taxation
• PAN is used for taxation purposes in India
• Non-resident Indians and foreign U.S. SSN SSN
nationals use ITIN instead of SSN
India Aadhaar PAN
Regulatory Differences Between India and the USA: Employer
Identification Number (EIN) vs. PAN
• EIN
• Used in the U.S. for tax purposes
• Required for filing federal tax returns,
hiring employees, and opening a
business bank account EIN PAN
• PAN
Country U.S. India
• Used in India for similar purposes
• Used for tax filing and opening business Tax filing, hiring
bank accounts Tax filing,
employees,
Purpose opening business
opening business
bank account
bank account
Regulatory Differences Between India and the USA:
Taxation Differences
• Corporate Taxation
• The U.S. has a progressive corporate tax
structure
• India has a fixed corporate tax rate for
SMEs U.S. India
• State Taxes
• The U.S. has both federal and state taxes Corporate
Progressive Fixed
• India has centralized taxes Taxation

Federal and
State Taxes Centralized
State
Regulatory
Differences Between
India and the USA: • CPA vs CA
• In the U.S., accounting services are often
Professional Licenses provided by Certified Public Accountants (CPAs),
who are licensed by state boards.
• In India, the equivalent designation is Chartered
Accountant (CA), regulated by the ICAI.
• Licensing Requirements
• U.S. states have specific licensing requirements
for CPAs, including education, examination, and
experience criteria.
• These differ from India’s CA qualification process.
Contact Information
LinkedIN

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