Why Global Businesses Rely on Finance and Accounting Outsourcing Companies for India-Specific Compliance

Global companies underestimate the difficulty of navigating the Indian compliance environment. That is why many of them encounter severe problems, such as the payment of huge fines, the cancellation of GST certificates, and criminal liability.

These compliance requirements are fluid and multifaceted, with each financial activity likely subject to entirely different sets of rules and regulations.

For example, Indian payroll compliance involves contributions to PF, ESIC, and professional tax, and each has its own separate rules and deadlines. If your finance team approaches its Indian entity’s payroll compliance from a global perspective, financial reporting will be delayed or inaccurate.

To address this, a CFO, controller, or finance leader may decide to build an in-house compliance team to align local and international compliance. But the downsides of this approach are many.

Recruiting an in-house team is slow and expensive. It also requires frequent training and increases overhead costs. Moreover, finding accountants who truly fit the bill is becoming more difficult with the talent shortage in Western markets.

That is why successful global companies with Indian operations partner with finance and accounting outsourcing companies to access dedicated accountants who have the requisite expertise in local and international compliance.

In this article, we show the reasons global enterprises and MNCs in India engage finance and accounting outsourcing businesses to minimize their compliance risk and enable their internal teams to focus on growth and strategy.

The Role of Finance and Accounting Outsourcing Companies

Finance and accounting outsourcing companies facilitate compliance with Indian regulatory requirements by bridging the gap between local and global financial reporting standards.

From global solutions to country-specific expertise

Finance and accounting outsourcing companies have the academic and professional training needed to tailor global processes to India’s unique regulatory requirements.

This enables them to deliver financial reporting for global companies through:

• End-to-end statutory compliance (from tax filings to ROC submissions).
• Managed payrolls, including timely and accurate remittance of PF, ESIC, and professional tax.
• Accurate reporting to Indian authorities and the company headquarters.
• Real-time tracking of regulation changes.
• Etc.

Why outsourcing compliance is smarter than in-house

Hiring a full-time finance team to handle the complex Indian compliance comes at a cost that enterprises should not have to bear.

For example, despite the accounting talent shortage in the U.S., it is still much easier to find accountants who are proficient in global reporting frameworks but deficient in India-specific requirements.

In India, it is also easier to find accountants who are grounded in local frameworks than in international standards. This makes the recruitment process expensive and time-consuming.

Meanwhile, finance and accounting outsourcing companies in India do not just have large workforces; they train their staff on international financial regulation and reporting standards in addition to their Indian academic qualifications.

These companies also facilitate regular training that keeps their staff up to date with evolving regulations (such as e-invoicing mandates and CSR reporting), which saves global businesses the cost of training and retaining in-house teams.

Outsourcing also offers flexible engagement models that enable global enterprises to access month-end close, tax preparation, and audit support services.

They do not require long-term contracts, so finance leaders in global companies can terminate engagements as quickly as their needs are met, saving them fixed costs.

Accounting and Compliance Services in India use advanced technologies, audit trails, and internal control systems to minimize errors and ensure compliance, which helps global corporations to prevent fines and legal issues.

What Makes India’s Accounting and Compliance Landscape Unique

Even the best-resourced CFOs, controllers, and other finance leaders struggle with the Indian compliance system  due to its:

Frequent regulatory updates and filings

Unlike the U.S. and many other countries, where compliance forms and thresholds change annually (at a minimum), India’s GST Council, Ministry of Corporate Affairs (MCA), and Central Board of Direct Taxes (CBDT) can change compliance regulations several times in a year.

This requires a dedicated team that can constantly monitor and implement regulatory updates.

Tax complexity: GST, TDS, and local rules

Indian tax structures are multi-layered, requiring in-depth expertise and meticulous attention to detail.

For example, the Goods and Services Tax (GST) applies at both the central and state levels, requiring input tax credit reconciliation and monthly and annual filings.

This is contrary to the system in the U.S., where the federal government leaves the administration of sales tax to the states and where input tax reconciliation doesn’t apply.

There is also the Tax Deducted at Source (TDS), which requires global companies operating in India to deduct and remit a portion of the payment they make to service providers (salary, contractor fees, rent, professional services).

The closest requirement to the TDS in the U.S. is the federal/state tax withholding, which applies only to salaries and wages and typically doesn’t include independent contractors.

Then there are the local rules that vary by state. India has 28 states and 8 union territories, and each of these has varying compliance requirements, so it’s not enough to know what’s required in one (or five) states. You need to understand what is required across all the states your business operates in.

Timely reporting and audit readiness

In India, reporting errors and delays carry the same weight.

The Companies Act and other regulations require businesses operating in India to accurately report their financial activities and keep audit-ready records throughout the year.

With GST alone, the monthly summary of tax liability (GSTR-3B) is due by the 20th of the next month, and the sales/outward supplies reports (GSTR-1) are due the 11th of the next month.

Finance teams are also required to update their invoices (sales, purchase, etc.) and ITC documentation every month.

Failure to comply with any of these (and several others) attracts direct consequences that include financial penalties and reputational damages. For example, late filing of the MCA attracts a fine of ₹100 per day.

While these factors make India’s accounting and compliance environment uniquely burdensome for global businesses and multinational corporations (MNCs), the most successful ones maintain compliance without much effort on their part.

That’s the benefit of relying on the strong, cost-effective, and tech-driven finance and accounting outsourcing companies with decades of local and international exposure like Finsmart Accounting.

Finsmart’s Fully Managed India Accounting & Compliance Service

Finsmart’s India accounting and compliance services were created to simplify complex Indian accounting and compliance procedures for global enterprises with Indian subsidiaries.

Founded by a Chartered Accountant, Shalaka Joshi, in 2007, the finance and accounting outsourcing company has satisfied over 300 clients, including global CFOs, Controllers, accounting firm owners, and other finance leaders.

Finsmart uses the Accounting Seat model, which provides dedicated accountants, bookkeepers, and tax preparers to global businesses operating in India.

These accounting experts will work within your finance teams using your task management, communication, and collaboration tools to deliver the accounting and compliance services your Indian entity needs.

Expert-led, process-driven, and aligned with Indian financial regulations

A subscription to the Finamart Accounting services is a partnership for:

• Expert-Led Guidance

Our Indian Corporate Services are delivered by experts who are grounded in Indian GAAP, Ind AS, and international standards (IFRS/GAAP), which keeps our clients ahead of the curve in terms of regulatory changes, such as the recent e-invoicing mandates and CSR reporting updates.

• Process-Driven Operations

Our standard workflows include monthly GST reconciliations (GSTR-1/3B), quarterly TDS filings (Form 26Q), annual MCA submissions (AOC-4/MGT-7), and RBI FDI reporting (FLA returns).

These ensure timely, efficient, and consistent financial services that keep enterprise businesses compliant without reinventing the wheel at each turn.

• Full Alignment with Indian Regulations

Our processes comply with relevant laws like the Companies Act 2013, Income Tax Act, EPF/ESI for payroll, and state-specific levies.

We also align local requirements with your headquarters’ reporting needs to provide you with consolidated statements that align with all applicable accounting standards.

Scope of Work: End-to-End Accounting + Compliance

Finsmart Accounting team members specialize in different accounting functions to ensure the financial records of the Indian entities of global companies are timely, accurate, and compliant.

These functions include:

• Bookkeeping & transaction accuracy

Our bookkeeping services provide a solid foundation for your financial reporting, audits, and compliance.

Our bookkeeping experts will record all financial transactions, including sales, purchases, expenses, and payments, according to the relevant accounting standards (Indian Accounting Standard or Indian GAAP).

Each transaction is accurately categorized according to your chart of accounts and maintained in the cloud using QuickBooks, Xero, or any other general ledger software.

• Bank & ledger reconciliations

Our bank and ledger reconciliation services ensure that your company’s data paints an accurate picture of your financial position.

We achieve that through regular maintenance and reconciliation of general and subsidiary ledgers, preparing trial balances, and performing intercompany reconciliations to ensure alignment between your Indian books and global reporting requirements.

• Monthly financial closing & reports

Once data is reconciled, we carry out monthly closing activities ​​to ensure your books reflect an accurate financial position. This includes adjusting entries for accruals, prepayments, and depreciation.

We prepare key financial reports required for statutory compliance (balance sheets, Profit and Loss statement, and cash flow statement).

Additionally, we prepare custom reports (such as project-based accounting, cost center analysis, etc.) that help you to make informed business decisions.

• GST & TDS compliance with full reporting

With our GST compliance services, we manage all aspects of GST compliance — including periodic return filings (GSTR-1, GSTR-3B, and annual returns), e-invoicing, and state-specific registrations and reporting obligations.

Our team of chartered accountants and master’s degree holders in accounting will manage this process on your behalf.

We will also handle your company’s Tax Deducted at Source (TDS) compliance by calculating your liabilities to file quarterly TDS returns and provide TDS certificates in compliance with rate changes and exemptions.

Our services include management of reconciliations, notices, and refund processes to reduce compliance risks. This frees your in-house resources to manage your strategy and growth.

• MIS & management reporting for insights

With the Management Information System (MIS) & Management Reporting service, we provide the data your management needs to measure financial performance and support strategic decisions.

We will share dashboards with you in your preferred ERP platforms to enable you to track your KPIs, maintain audit-ready financial records, and review custom reports, such as revenue analysis, expense trends, and budget vs. actual analysis, to align MIS reports with IFRS or GAAP standards and ensure consolidated group reporting.

Why Global Companies Trust Us for Their India Entities

International businesses expanding to India choose Finsmart because of our blend of local expertise and global exposure.

• Plug-and-play model with local expertise

Our chartered accountants will take ownership of your day-to-day financial tasks and operations, including tracking regulatory changes and ensuring GST, TDS, and MCA filings are made accurately and on time.

This protects your business from penalties and reputational risk while empowering your in-house team to focus on growth and strategy.

Whether you need a few professionals or a whole accounting department to handle your Indian accounting and compliance needs, our 150+ accountants are ready to hit the ground running in just seven (7) days.

• No hiring, no training, no compliance risks

We hire and train accounting graduates so that you wouldn’t have to worry about recruitment, onboarding, and training costs and delays.

Our accounting resources are already pre-vetted and prequalified to enable you to deploy them for your financial operations quickly and efficiently.

We also take care of their payments and HR, so you wouldn’t need to worry about compliance with local employment and labor laws. All that matters to you is that you pay your monthly subscription.

Global Businesses Rely on Finsmart for India-Specific Compliance

Every business looking to take advantage of India’s large consumer base and booming industrial ecosystem must be ready to comply with its complex regulatory requirements.

As a CFO, Controller, or finance team lead, you either do this by building a full-time internal finance team or partnering with Indian accounting and compliance service providers.

The latter is not only the most cost-effective solution, but it is also the most reliable and efficient. Here’s why.

Remote accounting teams in India, like Finsmart, employ accounting degree holders who have advanced training in international compliance standards (GAAP/IFRS). This enables them to protect the Indian subsidiaries of global businesses by ensuring that financial processes are timely, accurate, and compliant.

That is why 300+ global businesses, multinational corporations, and accounting firms trust Finsmart Accounting for their Indian financial operations.

Led by chartered accountants Shalaka Joshi and Dipali Phadke, Finsmart’s expertise in India’s regulations (GST, TDS, Ind AS, RBI) and global accounting standards (IFRS/GAAP) has ensured an average client retention period of nine (9) years. Let’s connect to plan your Indian requirements. Click here to book a free consultation with any of our experts.