BUSINESS PROCESS OUTSOURCING

Any kind of accounting involves sharing of data with the accountant so that he can record them and then tell you how you are doing as a business.
Normally people feel comfortable in sharing data only with people whom they trust or who are under their contractual obligation to keep the data confidential. Since employees are under contractual obligation to maintain strict data confidentiality, a business owner will have the confidence in sharing financial data with an in-house accountant.

Even with the case of an outsourced accountant, a business can trust sharing of data only when it is sure that any kind of data leakage from the outsourcer can lead to litigation against the outsourcing accountant. Since people are comfortable with the legal systems prevalent with one’s own country, a business owner would be comfortable in sharing data with an outsourced accounting provider present inside his country, after entering into a legal contract with the outsourcer.

For an outsourced accounting service provider hailing from a country different from the country of the business, it therefore becomes difficult to get lot of work since businesses in one country would not entrust data to the outsourcer of another country because of different legal frameworks governing the two countries. Why shall a businessman in US spend his time trying to understand the legal framework of the outsourcer country like India/China/Philippines?

If it is difficult for a businessman to share his data with a person providing outsourced accounting then is that the end of outsourcing? The answer obviously is "no". Outsourcing can be done with such firms as are managed by Indian CAs. There are several reasons why a business in US shall opt for CA managed firm while choosing an outsourcing partner, especially if data security is considered as a prime factor.