Finance and Accounting (F&A) outsource value chain
Success of financial and accounting offshore has been accepted by both large and small companies. Accounting outsourcing started with organizations offshoring high-volume and labor-intensive tasks to lower wage countries like India, China, and Philippians. Cost reduction was the main driving force in all the finance and accounting offshore contracts. Noncore accounting and financial processes were removed from the overall accounting business process, reengineered and shifted to offshore locations where skilled accountants and commerce graduates delivered the services. Mostly success was measured on a predefined parameters accepted in the contract agreements. Parameters like time of completion, error rate, and productivity gains were used to measure the success of an accounting offshore project. But current business conditions are changing the F&A outsource landscape drastically.

Need for higher value accounting outsourcing
The finance and accounting function is changing worldwide, today’s business globalization and rapid changes in technologies made the CFO role more important to their organizations. They’re in constant pressure to demonstrate their value to the businesses. CFO office is expected to involve in defining short-term and long-term strategic direction and fostering long-term growth to its shareholders. Because of constant pressure from their upper level management CFOs are started looking their offshore vendors to provide core financial and accounting business services for them. CFOs are started looking into offshore vendors not just to save cost but to add strategic business value by working with their internal account team members.

Companies in US and UK are facing difficult time finding qualified accountants and financial research analysts locally for their strategic accounting and financial projects. It becomes the survival for them to use qualified higher-end accounting professionals in offshore locations using their own captive centers or through offshore vendors.

Finance & Accounting value chain
Offshore vendors specifically based in India have been gaining vertical domain expertise on complex financial and accounting business processes by working with several organizations. They’ve are slowly moving the accounting outsource value chain by providing services that adds strategic value to their clients. For the F&A offshore vendors migrating to higher-end services has been gradual. This is because of several reasons like data confidentiality, regulatory and strict quality requirements expected from their clients. The financial and accounting outsource value chain shows some the lower-value and higher-value accounting services that are offshored to India.

Delivery higher value F&A services require accounting business process insight, ability to analyze the issues and industry dynamics to deliver the solutions. Following are some of the key characteristics of higher-value F&A processes Indian based offshore vendors are slowly learning:

• It is a people collaborative intensive task that requires deep vertical accounting and financial expertise and analysis skills, often the success of the tasks depends on judgment rather than specific accounting rules and procedures.
• Higher-value accounting processes are complex, requiring many steps, performed through rigorous accounting and financial analysis and reasoning processes.
• Only people with advanced degrees like CA, MBA, and PhD can perform higher value F&A tasks. These people work closely with their onshore team to provide the services.
• Both the offshore vendors and their clients need to follow complex F&A process and project management tools and technologies to oversee and measure the progress of the projects. It is not like low value accounting tasks that can be performed at remote offshore locations with less or no interaction between the client and offshore teams.