Why Outsource Tax Preparation Services to India

by Roy Roger B2B Services - Legal, Accounting

The last decade has seen a phenomenal growth in outsourcing tax preparation by accounting firms. A major slice of the pie has come to India because this country offers advantages that are hard to match. But before going into the intricacies of what India has to contribute to the tax preparation outsourcing scenario, it will be pertinent to see why most accounting firms regardless of its size are taking this route.

Tax outsourcing improves productivity and efficiency. It gives firms the flexibility to staff for off-season workload instead of peak-season one thereby enhancing the yearly billable hours. Moreover, by outsourcing, there is a reduction in costs on account of the wage differential between outsourcing countries and the offshore outsourced country. This is again very relevant for India where operating costs are comparatively low.

Tax outsourcing also helps accounting firms better their customer service. While most of them promise a specific turnaround time based on their staff strength, outsourcing helps them improve on the promised time by getting the work turn quicker without adding more staff on rolls. It enables the firms to concentrate more on providing value-added services to clients while outsourcing tedious and repetitive tax preparation work.

What then are the gains of outsourcing tax preparation to India –

· Qualified accountants – All outsourced tax preparation firms have highly qualified and experienced professionals well versed in the nuances of tax forms and tax laws in different countries. Cutting edge software is used which not only reduces processing time but also ensures a high level of accuracy.

· Using the latest software – The software used in tax preparation are those that are standard all over the world. These include Intuit’s Lacerte, Creative Solutions’ Ultra-Tax, Intuit’s ProSeries, ATX, Drake Tax, ProSystem FX, Go-System and any other relevant software that has been developed to help complete tax preparation quickly and efficiently. All these are compatible with all forms and accounting procedures prevalent in the outsourcing countries.

· Flexible Tax Preparation Process – There are two systems being followed in India both being highly convenient to the offshore accounting firms.

The first is the remote access based tax return. The source documents are scanned and uploaded to the server in India or faxed, say at the close of business hours. Tax preparers in India connect to sever of the firm very securely through a remote desktop service such as GoToMyPC.com or Secure VPN. The tax preparation is done during working hours in India and uploaded to the computers so that it is ready to be seen when the employees of the firm report for duty the next morning!

The second is the server based tax return. The system followed in the first option is similarly followed by a few fine changes. The tax preparer in India makes use of such in-house Tax Prep Software as quickbooksonline.com and completes the return. All that the outsourcing firm has to do is to download the updated return from the server and restore it in the updated tax return window.

With all these advantages, it surely makes sense to outsource tax preparation to India.