Benefits of Finance & Accounting Outsourcing for Indian Startups

As Indian startups continue to grow, they often face a variety of financial and accounting challenges. While managing finances is a critical component of any business, startups can find it particularly difficult to keep up with the complexities of Finance & Accounting while also focusing on growth.

Every company incorporated under the Companies Act 2013 needs to oblige with all the laws, rules and regulations enacted thereunder. The cost of compliance and monetary fines is increasing to become more stringent. Penalties for non-compliance depend upon the nature of contravention/offense.

Finance and Accounting Outsourcing (FAO) is a process of contracting out a company’s finance and accounting functions to a third-party service provider. Outsourcing Finance and Accounting can bring numerous benefits to startups, particularly those based in India. In this article, Finsmart  – a leading provider of financial controller services in India – will explore some of the benefits of FAO for Indian startups and the impact of not having skilled F&A.

Let’s start!

Benefits of outsourcing finance and accounting services 

The below benefits will help you understand why it is beneficial for Indian startups to invest in finance and accounting outsourcing services:

# 1 Lower Operational Costs

One of the primary benefits of outsourcing financial and accounting  for Indian startups is the lower cost of operations. Startups often have limited resources, and outsourcing financial and accounting  can help them reduce their overhead costs. This is particularly true in India, where the cost of labor is relatively low compared to other countries. According to a report by the National Association of Software and Services Companies (NASSCOM), India is the leading outsourcing destination for finance and accounting services.

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# 2 Access to Skilled Professionals

Outsourcing F&A can also provide Indian startups with access to skilled professionals who have expertise in the latest financial and accounting practices. Startups often do not have the resources or expertise to handle complex financial and accounting tasks. By outsourcing these functions to a third-party service provider, startups can tap into a pool of experienced professionals who are well-versed in the latest accounting and financial practices. This can help startups to streamline their processes, reduce errors, and improve their overall financial management.

#3 Scalability

Startups in India often experience rapid growth, which can be difficult to manage from a financial perspective. Outsourcing financial and accounting  can help startups to scale up their financial management quickly and efficiently. Third-party service providers can provide support for everything from bookkeeping to tax preparation, allowing startups to focus on growing their business. A massive benefit of outsourced financial and accounting outsourcing if you ask us!

#4 Improved Compliance

Compliance is a critical issue for startups, particularly those in highly regulated industries such as healthcare or finance. Outsourcing financial and accounting  can help Indian startups to ensure that they are complying with all relevant regulations and laws. Third-party service providers are often well-versed in compliance requirements and can help startups to avoid costly penalties and fines.

Here’s how accounting and compliance works with Finsmart

#5 Access to Technology

Outsourcing financial and accounting provide Indian businesses the advantage of financial and accounting technology. Third-party service providers often invest in the latest software and systems, which can help startups to improve their financial management and streamline their processes. This benefit of outsourced finance and accounting services help startups to stay competitive and keep up with industry trends.

Impact of Unskilled Finance and Accounting Talent 

The lack of skilled financial and accounting professionals can have a significant impact on Indian startups. Without proper financial management, startups may struggle to attract investors or secure funding. Inaccurate financial reporting can also lead to regulatory fines, which can be costly for startups. Additionally, startups that do not have skilled F&A may be more vulnerable to fraud and embezzlement, which can have a devastating impact on the business.

Watch this testimonial to learn more about how Finsmart’s expert team of accountants can help your business streamline its financial operations and achieve greater success

Benefit from an Ace Accounting Team

Outsourcing finance and accounting can provide significant benefits for Indian startups, including lower operational costs, access to skilled professionals, scalability, improved compliance, and access to technology. The lack of skilled financial and accounting professionals can have a significant impact on Indian startups, so it is critical for startups to prioritize this function. By outsourcing financial and accounting, startups can focus on growth while also ensuring that their financial management is in good hands

Have queries to ask? Drop them in the comments or email us at to get a quick reply from our team of accounting and finance experts.

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Finsmart Accounting with its 15 years of outsourced accounting expertise is a one-stop solution for all accounting, taxation, and payroll needs for growing business enterprises. Our customer-centric service models, domain expertise, and use of the latest tools & technologies have truly helped us to establish ourselves as ‘Trusted FinOps Partner’.

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