Financial Outsourcing Services by CA Firms – An Analysis
Regarded as one of the toughest exams in India, CA aspirants need to go through three levels of exams successfully to become a professional CA. Considering the tasks maintained by the chartered accountant can drive the economic health of not only a company but also a nation, it is necessary to be able to rely on experts. Let’s see exactly what financial outsourcing services are provided by CA firms.
What are Financial Outsourcing Services?
These are a broad range of services provided by the financial sector. These include services in insurance, investment, banking, etc. Most companies from start-ups and small-scale companies to big multi-national companies often outsource these tasks to various financial firms for better quality reports as well as to better focus on their own growth. We’ve discussed the importance of outsourcing financial services in the previous article with advantages and disadvantages, now let’s see one such financial firm providing services, the Chartered Accountants/ CA firms.
Who are the Chartered Accountants and what do they do?
Accounting professionals who are responsible for conducting audits, managing the accounts, all financial accounting and reporting, taxation, other finances, etc. are usually given the designation of a chartered accountant. In short, it is a global naming classification awarded to accounting professionals, mainly outside the United States. In the US, the term Chartered Accountant (CA) is replaced with Certified Public Accountant (CPA). In India, we have the Institute of Chartered Accountants of India (ICAI) which provides a top-notch curriculum completely in tandem with the laws and regulations of India, which guarantees a bright with countless professional options. Now let’s see what the CAs are responsible for. A chartered accountant is responsible for many things including:
Financial Outsourcing Services by CA Firms # 1 – Auditing
Chartered accountants as auditors are responsible for making sure that the client company’s financial reports and statements are made based on the respective rules and regulations. These reports cannot be fabricated as the company’s reputation and goodwill are at stake. Hence why proper auditing is necessary.
Financial Outsourcing Services by CA Firms #2 – Accountancy
Chartered accountants also prepare all sorts of financial statements and reports while keeping records of the accounts payable, bookkeeping, and other complex financial analysis.
Financial Outsourcing Services by CA Firms #3 – Cost Accountancy
Cost accountancy is very important especially when it comes to the manufacturing industry or a service provider organization. The CA needs to determine the right cost of production and additional costs that may be incurred during various stages of production. Hence, applying and following proper cost-controlling methods and establishing suitable cost and selling prices are one of the most important roles of a chartered accountant.
Financial Outsourcing Services by CA Firms #4 – Taxation
As noted in the Statue book, there are various types of taxes of which the current and continuous tax information are vital elements in the economics of Business Management as financial accountancy and tax assessment are linked together. Here the chartered accountants are responsible for preparing tax returns, assessing the tax returns, and submitting them to the Income tax authorities. The CA is responsible for auditing any complicated cases that have large revenue potential. The CA should also be able to give any general tax advice to their clients.
Financial Outsourcing Services by CA Firms # 5 – Investigation
Chartered accountants are also in charge of conducting investigations to confirm the status of a business or company. In case of the launch of a new product or issuing a new share capital, investigations can be done to finalize and compare the sales profit or purchase total or overall business finances as well as unions between businesses and reconstruction. Investigations can also tell about the efficiency achieved by the management while figuring out the reason for the incline and decline in profits.
Financial Outsourcing Services by CA Firms # 6 – Executors and Trustees
When a chartered accountant collaborates with a lawyer in a legal firm or for any legal matter, then they are known as an executor or a trustee. This collaboration ensures an accountant of legal help in their accounting jobs.
Financial Outsourcing Services by CA Firms # 7 – Secretarial Works of a company
For small companies and start-up companies, where the number of employees is limited that they may not be able to afford a full-time secretary, they can rely on an accountant who can also manage the roles of a secretary.
Financial Outsourcing Services by CA Firms # 8 – Management Accounting
In this, the chartered accountant performs various functions in management accounting such as creating new and efficient policies, daily jobs and control of other day-to-day activities, evaluating team and individual performances, etc.
Financial Outsourcing Services by CA Firms # 9 – GST Compliance, Audit, and Training –
Chartered accountants are well-versed in the rules and regulations of GST and related complaint procedures. Hence, they are able to perform good quality auditing and training of all necessary laws to the client and also manage their accounts according to the given rules.
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Top Firms offering Financial Outsourcing Services
1. Deloitte India
Deloitte Touche Tohmatsu Limited, otherwise simply known as Deloitte is one of the top CA firms. This global professional service network has its headquarters in London, England. With over 173 years of experience, the company has grown and established in around 150 countries with over 415,000 employees making a difference in society. In India, Deloitte is among one of the prestigious Big 4 companies. As such, they always deliver the best quality services to their clients making sure to maximize the rate of success in any project. The company also makes sure to encourage its employees by creating an environment where they can explore their talents and thrive. This is shown true as Deloitte has been ranked at number 17 on the list of “Fortune 100 Best Companies to Work For”, also winning the “Glassdoor Employee’s Choice Award for the Best Places to Work in 2023”, “Fortune’s Best Workplaces in Consulting and Professional Services of 2022”, among many other awards. Deloitte offers services to various industries including:
- Consumer products
- Retail, wholesale & distribution
- Transportation, hospitality & services
- Energy, Resources and Industrials
- Industrial products & construction
- Power, utilities & renewables
- Energy & chemicals
- Mining & metals
- Financial Services
- Banking & capital markets
- Insurance & investment management
- Real estate
- Government and Public Services
- Defense, security, civil & justice
- Federal health
- State & Local
- Higher education
- Life Sciences and Health Care
- Health care
- Life science
- Technology, Media & Telecommunications
- Telecommunications, media & entertainment
In General, the Services Provided by Deloitte Can Be Classified as Follows:
- Tax – In the vastly developing digital technology era, business models are also evolving at a rapid pace. Companies need to keep up with evolving technology and skills to be on top and that is not possible without expertise in forecasting and scenario modeling of the tax department. Deloitte offers insight into various tax operation strategies and related technology. These include services in tax operation, legislation, technology consulting, global employer services, legal business services, and other tax services.
- Consulting – Every organization will, at one point or another, run into some business complications where they need advice. The consulting services of the company include core business operations, customer & marketing, enterprise technology & performance, human capital, and strategy & analytics.
- Audit & assurance – With high-end technologies and well-thought-out processes, the company ensures to meet your expectation with their services in audit innovation, accounting standards, events & transactions.
- M&A and restructuring – The experienced adviser will lead your organization to total success with their merger, acquisitions & restructuring activities.
- Risk & financial advisory – This includes advice on risk related to accounting & internal controls, cyber & strategic risk, regulatory & legal, transactions, and M&A.
- AI & analytics – Perhaps the new business complication will work better with an answer from a mix of human and artificial intelligence with the help of data science and business models. The services offered in this domain include AI services and solutions.
- Cloud – This includes cloud operation, ERP & SaaS, Hybrid cloud, cloud analytics, cloud infrastructure & engineering, etc. among others.
- Diversity, equity & inclusion – This involves a system-based approach to orchestrate equitable outcomes and ensure value while promoting equal involvement of all employees and clients across society and within the workplace.
- Deloitte Private – This is a custom service or package for private firms as per their needs.
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2. Ernst & Young (EY)
The second on our list is also one of the Big 4 companies in India, and that is Ernst & Young. Result of a merger of two accounting firms – ‘Ernst & Whitney’ and ‘Arthur Young & Co.’ in 1989, it finds its headquarters in London, England. Having more than 250,000 employees spread across over 150 countries, it is one of the biggest professional service networks globally. EY extends its services across various industries such as:
- Advanced manufacturing and mobility
- Energy and resources
- Financial services
- Government and infrastructure
- Private Equity
- Health science and wellness
- Technology, media & entertainment, and telecommunications
The Major Services Provided by EY Are as Follows:
- Consulting – This involves consulting advice or services with regard to customer experience, AI, cybersecurity, data and decision intelligence, risk consulting, supply chain & operations, technology, and how to accelerate digital transactions with AI, cloud, and data protection & privacy.
- People and workforce – This covers services in HR transformation, integrated workforce mobility, workforce analytics, recognition & reward advisory, etc. among others.
- Transactions and corporate finance – This category explains the services such as corporate finance, sustainability & ESG services, M&A – advisory, integration, technology & tools, valuation, modeling & economics, value-added services for new-age businesses, etc.
- Assurance – This includes services for climate change & sustainability, financial accounting advisory services, forensic and integrity, IFRS, and long-term value metrics creation.
- Tax – Tax services cover tax planning, function operations, policy & controversy, global trade, private tax services, digital tax strategy, and tax compliance & policies.
- Technology – Technological services are services that involve the usage of various high-end tax technologies, connected capital technologies, alliances, and ecosystems, etc.
- Managed services – This can be managed services in tax, finance, risk, and forensics.
- EY private – EY private is mainly for entrepreneurs, private businesses, business owners, and even families as these services can be customized for family enterprises, and various tax services specially designed for private firms.
- EY sustainability – This commonly involves sustainable finance, ESG strategies, supply chain transformation, tax services in general, global renewables, etc.
- Strategy by EY Parthenon – this covers customized and well-prepared strategies in the areas of consulting, corporate and growth, transaction and execution, restructuring & turnaround, industry, digital, and commercial.
Up next on our list is yet again one of the Big 4 companies in India, which is PricewaterhouseCoopers International Limited or simply known as PwC. Spread across 157 countries with over 740 locations consisting of around 320,000 employee workforce, it is one of the largest professional service firms globally, also having its headquarters in London, England. As with EY, PwC is the result of a merger between ‘Price Waterhouse’ and ‘Coopers & Lybrand’ in 1998. Their mantra is to act with care and integrity while working together to make a difference in the livelihood and society, and reimagining the possible, no matter what the culture or background. PwC offers its services to a vast number of industries such as:
- Aerospace & defence
- Capital projects & infrastructure
- Financial services
- Government & public services
- Industrial products
- Mining & metals
- Oil & gas
- Pharmaceuticals and life sciences
- Private Equity
- Retail and consumer
- Smart cities
- Technology, media & telecommunications
For All These Industries, the Services Offered Are as Follows:
- Accounting advisory – Businesses face numerous complex situations even on a daily basis regarding acquisitions, consolidations, restatements, debt & equity, GAAP conversion, etc. and PwC provides a one-stop solution to all these queries with their range of services in capital markets, IPO advice, accounting training, treasury & hedge accounting services, GAAP conversion, M&A and corporate restructuring, etc.
- Alliances and ecosystem – Handling a business in the present day means keeping up with the ever-changing technology-driven world. There’s automation and AI everywhere. As such PwC offers various differentiating solutions and results with the help of most modern technology and alliance partners, be it regarding cloud or innovation or business transformation or operational efficiency.
- Consulting – This majorly indicates management consulting, risk consulting, and technology consulting. But within that umbrella, numerous services are included like – cyber security, data & analytics, forensics, front-office transformation, HR transformation, financial risk & regulations, risk consulting, experience consulting, value-led ERP, managed services, digital transformation, etc. to name a few.
- Deals – Deals are necessary for businesses for growth, rapid operational transformation, value realization & protection. Here the services provided are – deal strategies, ESG in deals, corporate finance and investment banking, business recovery services, valuation, value creation, etc.
- Entrepreneurial and private business – This involves any advice or professional business solution required to grow, maintain, plan succession, and overall growth of your company given by trusted business advisors.
- Environment, Social & Governance (ESG) – This includes ESG strategy and transformation, ESG reporting & BRSR, climate change impact, responsible investment, sustainable value chain, and sustainable finance.
- Industrial development and investment promotion – This aims to provide comprehensive solutions for sectors such as services, manufacturing, tourism, logistics as well as government organizations.
- International business groups – This is mainly for businesses that operate globally, by helping them operate better across borders and to enter new markets.
- Risk and regulation – This includes business risk consulting, risk analytics, third-party risk management, and compliance risk services, among others.
- Startups – This provides all insights and advice required for a start-up to build itself, scale up, and expand into a successful and resilient company.
- Transformation – This is like a sum-up of all the services we’ve seen so far provided by PwC for the better standing of a company in the fast-moving world such as customer-led transformation, supply chain transformation, finance transformation, etc.
4. KPMG India
Next on the list is also one of the Big 4 accounting companies in India – the KPMG, which is ‘Klynveld Peat Marwick Goerdeler’. Also a result of the merger between ‘Klynveld Main Goerdeler’ and ‘Peat Marwick’, in 1987. KPMG has its headquarters in Amstelveen, Netherlands. Working in over 143 countries with more than 265,000 employees and partners, KPMG brings the best quality services to business, private, public, and government companies through audit and assurance practices, capital markets, etc. In general, industries enjoying the services of KPMG are:
- Aerospace & defence
- Building and Construction
- Consumer markets
- Education and skills development
- Emerging giants program – mainly for startups
- Energy and natural resources
- Financial services
- Life sciences
- Transport and logistics
- KPMG Enterprise
The Financial Outsourcing Services Provided by KPMG Are Mainly Related to Tax, Advisory, and Kpmg Learning Academy:
- Tax – Effective tax-cost management goes a long in a business, and it requires careful consideration and properly executed strategies. With experts from varying backgrounds, KPMG provides multi-jurisdictional tax planning that covers all aspects of taxes whether it be direct, indirect, or personal taxes. The service also includes service line specialization, industry specialization, and international exposure with advanced training equipment. The major tax services provided by KPMG are corporate & international tax, transfer pricing, indirect tax, deal advisory, mergers & acquisitions tax, global mobility services, banking & financial services tax (BFSI), and tax technology & automation.
- Advisory – This involves business consulting, cyber security, government & public services, managed services, M&A, risk advisory, technology, supply chain realignment, and transformation.
- The KPMG Learning Academy – provides a wide variety of programs to take your subject knowledge and technology skills and capabilities to the next level.
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Conclusion on Financial Outsourcing Services by CA Firms :
In this article, we’ve seen the major services provided by CA firms for financial outsourcing and we’ve also seen the major companies that are known for their top-quality services, that is the Big 4. They offer various packages that fit your budget no matter if it is for your global organization, private company, government organization, startup, or family finances. Having proper professional advice at the right may just be the key to saving your company from bankruptcy or taking it to the next level by merging or expanding the business. So why wait, contact one of the above companies for all your financial needs and business requirements.
Frequently Asked Questions (FAQs) on Financial Outsourcing Services by CA Firms
Q. How to ensure data security while committing to financial outsourcing to CA firms?
Before giving data for financial outsourcing, discuss and analyze their approach to security measures involving data storage and security, and staff awareness. Most reputed CA firms will have reliable automated security systems in action that will alert the concerned person if there is ever a security breach, with efficient security backup and recovery processes.
Q. What are some of the software used by CA firms to work with financial outsourced data?
Some of the software used are Sage, CCH, QuickBooks, TaxCalc, MYOB, Peachtree, NetSuite, Thomson Reuters, Moneysoft, etc.
Q. How many should I have in the company before relying on the financial outsourcing services of CA firms?
It is always recommended to approach outsourcing regardless of the number of people. A good model can be helpful to grow your business without needing too many internal teams.