|
Mumbai,
25th
November, 2006
A report by Pune-based
consultant titled “Offshoring
Tax Returns Preparations to India”,
estimates that as many as 360,000 US tax returns were
prepared in India in 2006. It anticipates further growth,
estimating at least 1.6 million returns will be prepared
here in 2011. The estimates are conservative and the
potential is much larger at 22 million returns per year by
2011, but actual offshoring will be limited by CPA firms’
inhibitions about offshoring. However, competitive pressures
could force many more firms to offshore.
Says
Glen Keenan, President of Xpitax, a facilitating outfit
“The whole outsourcing business requires quite a shift in
thinking for the CPA firms, so comfort factor has to be
really high in order to do that”
The accounting and audit services are relatively new in
offshoring and are gradually gaining maturity with each
passing tax season. Unlike other services, which are
traditionally outsourced due to cost pressures, the demand
for returns offshoring stems from the lack of accountants
and excessive workload during the “tax season”. The number
of CPAs and other qualified accountants in the US are just
not enough to meet the increasing demand from increasing tax
compliance, Sarbanes–Oxley related work, estate planning,
advisory etc. The demand-supply mismatch has led to severe
competition for experienced accountants and salaries are
skyrocketing, even at starting levels. CPA firms are
discovering that offshored returns are not only turned
around faster, but are also 40% to 60% cheaper. CPA firms
after initial success with returns preparation is slowly
sending more work offshore: bookkeeping, financial
statements analysis etc
It is further forecasted that
the industry will quickly move beyond 1040s. Both the
vendors and buyers are at an inflection point on the
maturity graph, and it is expected that tax returns
preparation will drive penetration into a wider range of
offshored professional accounting services.
Adds ValueNotes CEO, Arun
Jethmalani, “The industry will quickly move beyond 1040s.
Both the vendors and buyers are at an inflection point on
the maturity graph, and we expect tax returns preparation
will drive penetration into a wider range of offshored
professional accounting services.”
Based
on analysis that included extensive primary research,
ValueNotes has picked three winners from the current
crop of vendors: Xpitax, GKM Management Services and
Business Accounting Services.
The Indian offshore services provider landscape consists of
captives of the Big Four audit firms
(KPMG, PriceWaterhouseCoopers, Deloitte and Touché and Ernst
& Young),
American facilitating firms / agencies
(Xpitax, SurePrep, CCH, IFR),
Tier-1 multi-service BPOs
(MphasiS, Datamatics, OPI),
Tier-2 BPOs
(PB Tech Impact Solutions, Cosmic Internet Technologies)
and F&A BPOs owned/ controlled by Indian Chartered
Accountants
(GKM Management services, Business Accounting Services,
Accountant Anywhere, Enablizer)
Based on analysis that included extensive primary research,
three winners have been identified from the
current crop of vendors: Xpitax, GKM Management Services and
Business Accounting Services.
Karthikeyan, MD, GKM Management Services opines, “As
Chartered Accountants, we feel our biggest advantage is that
we can speak the global language of accounting with the
CPAs. We feel this is a good differentiating factor for us
compared to the large corporate vendors. CPAs are bound to
trust us more than the tech companies because of our common
accounting background.”
The report titled
“Offshoring Tax Return Preparations to India”
suggests that return preparation will set the stage for
other accounting services to be sent to India.
For more
information visit:
http://www.bharatbook.com/detail.asp?id=26437 |
