THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

BPO and KPO

“Setting Up, Operation for Accounting and Work Management ”
at
Park Hotel, Kolkata
on
18th July 2009

ParaAccountant – India Accounting Globally

Sanjib Sanghi - FCA
 R d fi The
Redefine Th Future
F t

INDIA

“The KPO
H b off the
Hub th World”
W ld”

Accounting Anytime Anywhere…

 Ad
Advantage
t India
I di

Turn Around Time

Intellectual Capital Rich
Low Costs of Operation
Lower Attrition Rate
Telecom
e eco & Infrastructure
ast uctu e

Today’s Mantra
“Come to India –The Back-Office Partner of the World.”
 Financial KPO Hub

F&A Outsourcing set for a Meteoric rise in INDIA

As per NASSCOM estimates, the KPO

industry is expected to grow by 45 per cent by
2010. Out of the $16 billion, which the KPO
industry is estimated to earn, around $12
billion would be outsourced from
India.

A fresh Chartered Accountant or law graduate

earns Rs 2.5 lakh annually in a developing
country, a KPO alternative can offer up to a
500 per cent increase!

“Indians
Indians are BORN ACCOUNTANTS!”
ACCOUNTANTS!
 E
Expanding
di Frontiers
F ti

CICA ICAEW

AICPA

ICAI

ICAI ICPAS

ICAA

ICANZ

WE, AS CHARTERED ACCOUNTANTS,,

ACCOUNTANTS
IS BECOMING A KPO HUB FOR THE ENTIRE GLOBE!
H
How can a CA practice
ti GlGlobally
b ll ?

Indian Accountants – Becoming Para Accountants for the World !!

G
Growth
th off Professional
P f i l Accountants
A t t H
Huge O
Opportunity
t it ffor IIndian
di CA
86% ICAI
80.00%
AICPA
ICAEW
60.00%
Percentage

40.00%
30%
P

23%
20.00% 15%
10% 17%
8%
4% 2% 2% 3%
0.00% 0 2%
Base Year(1997) 1997 1999 2001 2003 2008

Year ICAI AICPA ICAEW Year ICAI AICPA ICAEW

1997 78506 329019 112872 1997 0 0 0
1999 90366 336635 116929 1999 15% 2% 4%
2001 96392 336081 121356 2001 23% 2% 8%
2003 101730 335111 123719 2003 30% 2% 10%
2008 145841 338687 132000 2008 86% 3% 17%
 St ti ti
Statistics off Returns
R t fil
filed
d

USA 78.33%

Canada 70.19%

UK 52.03%

India 2 74%
2.74%

0.00% 20.00% 40.00% 60.00% 80.00% 100.00%

Percentage
India UK Canada USA

% of Returns Filed 2.74% 52.03% 70.19% 78.33%

P
Percentage
t off P
Primary
i Returns
R t Fil
Filed
d
 H
Huge O
Opportunity
t it ffor Indian
I di CA
Average salary offered to accountants/bookkeepers in UK, USA & Canada and compared to
India to in Indian Rupees Annually.
2400000
Average Salary (Rs.)

1764000
1548000

60000

India Canada USA UK

Foreign Exchange Rate

Country Currency Conversion Rate Salary
India Rupee(Rs.) 1 Rs.60000
Canada Canadian Dollar($) 43 $36000
USA Dollar($) 49 $36000
UK Pound(£) 80 £30000
 H
Huge O
Opportunity
t it ffor IIndian
di CA

UK (SA 100) 7800

USA (1040) 7500

Canada (T1) 6000

India (Saral) 1000

0 2000 4000 6000 8000 10000

Rupees
Comparative Rates for Primary Returns
 S
Services
i – Indian
I di CA
CAs can d
do ffor CPA
CPAs

Outsourced Bookkeeping & Accounting Services

ƒ Setup,
Setup Designing & Mapping Chart of Accounts
ƒ Bank & Credit Card Reconciliation
ƒ Tracking Accounts Receivable & Aging analysis
ƒ Accounts Payable & Vendor Management
ƒ Billing & Invoicing
ƒ Inter-Company Reconciliation

Reviewing & Reporting Financials

ƒ General Ledger Maintenance & Cleaning
ƒ Monthly Review of Client Prepared Financial Statements
ƒ Account Reconciliation & Analysis
ƒ Cash Flow Planning & Budgeting
ƒ Preparation of Monthly, Quarterly & Annual Financial Statements
ƒ Preparing Compilation Report
Continued……..
S
Services
i – Indian
I di CA
CAs can d
do ffor CPA
CPAs

Taxation
ƒ 1040, 1065, 1120 & 1120S Tax Returns
ƒ Sales, Use Tax & Tire Tax

P
Payroll
ll
ƒ Payroll Processing
ƒ Journalizing Payroll in Accounting Program
ƒ Reconciling Payroll Liabilities
ƒ Filing of Monthly & Quarterly Forms (1099, W2, etc)

Auditing
ƒ Preparing Work Paper for Insurance Audit
ƒ Preparing Work Paper for Payroll Audit
 C
Common Applications
A li ti U
Used
d

Accounting Taxation Payroll

 H
How it Works
W k
KPO Accounting Work Model
Reviewed Overseas

Processed in India
Scanned in Overseas
 D
Document
t Management
M tSSystem
t
Folder & Paths CPA’s ACCOUNTS

CPA’s FOLDER
PR OC ES S
Follder-Maanagemeent

LIST OF CLIENT

CLIENTS

TO
O BE PROCESSED
OC SS

NOTE: ERRORS & REVIEWS

Client
C e t Information
o at o w will be p
provided
ov ded in CLIENTS
C N S folder.
o de .
COMPLETED
Only concerned Folder and Files are accessible

ERROR LOG
 S
Source D
Documents
t

Emails,
Efax like J2, MyFax etc
Manageement

MyOnlineRecords
Doccument M

www.myonlinerecords.com

All documents will serve as a permanent records

 S
Source D
Documents
t
Manageement
Doccument M

We can upload six files at a time

The files along with message can be directly emailed from here
 H
How it works
k ?
Process of Electronic Fax
 H
How it works
k ?

Operational Workflow Process

Receipt
of
Source
Docs
via
email
Add Work
W k Screen
S W kM
Work Managementt
M
Memorized
i d Work
W k Screen
S W kM
Work Managementt
 Client Open Work W kM
Work Managementt

Client Work Completed

All work to be done for individual person can been

seen every morning when a person Login

You can see reports for all works which have been previously closed
Cli t D
Client Detail
t il S
Screen W kM
Work Managementt
 Work Management Attendance Entry

Attendance Report By Month

Enter daily Time In and Time Out into the Program.

Standard Chart of Accounts for Small Clients

Balance Sheet Items Profit & Loss Items

Type AC # Account Description Income 1 Revenue
Income 4000 Taxable Sales
Bank 1000 Cash on Hand
Income 4500 Tax Exempt Sales
Bank 1020 Cash in Bank (Name of Bank + Last 4 Digits) Income 4800 Other Income
Bank 1040 Cash in Bank (Name of Bank + Last 4 Digits) Income 4900 Interest Income
AR 1100 Accounts Receivable
AR 1200 Employee Receivables COGS 2 Direct Cost
COGS 6000 Purchases
Current Assets 1300 Prepaid Expense COGS 6010 Supplies and Materials
Current Assets 1400 Other Current Assets COGS 6020 Subcontractors / Outside Services
Current Assets 1500 Inventory COGS 6030 Other Direct Cost
Other Assets 1600 Other Long Term Assets
Expense 3 General & Administrative Expense
Other Assets 1650 Goodwill
Expense Salaries & Wages
Other Assets 1660 Accumulated Amortization Expense 5100 Officer Wages
Fixed Assets 1700 Automobiles Expense 5200 Staff Wages
Fixed Assets 1720 Equipment & Machinery Expense 5300 Employee Benefits
Expense 5400 Payroll Taxes
Fixed Assets 1740 Other Office Equipment
Expense 7000 Rent
Fixed Assets 1760 Leasehold Improvements Expense 7100 Office Supplies
Fixed Assets 1780 Real Estate Owned Expense 7200 Postage
Fixed Assets 1800 Accumulated Depreciation
p Expense 7300 Advertising / Business Development
Expense 7400 Computer Expense
Expense 7500 Telephone
AP 2000 Accounts Payable Expense 7600 Automobile Expense - Owner
Credit Card 2010 Credit Card (Name of CC + Last 4 Digit) Expense 7650 Automobile Expense - Staff
Credit Card 2030 Credit Card (Name of CC + Last 4 Digit) Expense 7800 Insurance
Expense 7900 Interest Expense
Current Liabilities 2100 Credit Line Payable (Name of Creditor + Last 4 Digits)
Expense 8000 Dues & Subscriptions
Current Liabilities 2200 Federal Payroll Taxes Payable Expense 8100 Training & Education
Current Liabilities 2300 State Payroll Taxes Payable Expense 8300 Professional Fees
Current Liabilities 2400 Other Current Liabilities Expense 8400 Travel
Expense 8500 Meals & Entertainment
Long Term Liabilities 2500 Notes Payable (Name of Creditor + Last 4 Digits)
Expense 8600 Bank & Credit Card Charges
Long Term Liabilities 2600 Other Long Term Liabilities Expense 8700 Fines & Penalties
Equity 3000 Common Stock Expense 8800 Repair & Maintenance
Equity 3100 Additional Paid in Capital Expense 8850 Utilities
Equity 3200 Retained Earning Expense 8900 Gain / Loss on Equipment Disposals
Expense 9000 Depreciation
Equity 3300 Owners Draw Expense 9100 Amortization
Equity 3400 Dividends Paid Expense 9500 Other Expenses
Expense 9900 Federal Income Taxes
E
Expense 9950 St t Income
State I Taxes
T
R
Regular
l Work
W k Fl
Flow

Source Documents We Receive:

5 Bank Statements

uments
5 AP Invoices
5 Check Stubs

Sourrce Docu
5 Credit Card Statements
5 Weekly/Bi-Weekly Input Sheet for Payroll Processing
5 Statements from ADP, Paychex & Paychoice for PR J/Entries

5 Loan Statements
5 One-Write-Up
O W it U Sh Sheett
5 Client Tax Organizer & Source Documents
5 Sales Tax Information on Taxable Sales & Total Deposits
p
 P
Payroll
ll J
Journals
l

ADP Payroll Statement

Codingg & Reconciliatiion

Excel Prepared

Entered in System
y
 Journals
l

Coding & Recconciliattion

ll J
Payroll
P
 A
Accounts
t Payable
P bl MManagementt
dor Invoices

Receive vendor invoices via

e-Fax, eMail, or snail mail
Vend

Code Invoices to G/L Chart

Accoun
Enterr Invoices into
nting Software
Credit Card Statements
Receive Amex Statement via
e-Fax, eMail, or snail mail
Card Diistribution

Credit Card details are identified by their GL

Credit C

Codes an excel is prepared and entered in system

Coding of Expenses
Closing Date 2/6/2005
Distributing Amex Bill
e-Fax, eMail, or snail mail GL Code Amount
7320 317.04
7320 562 85
562.85
7320 208.82
7311 417.61
7320 59.76
7320 200.69
7312 79.45
7312 36.77
6220 310.58
7312 768 09
768.09
7310 854.75
Total 5527.53
Ch k St
Check Stubs
b
Date Check # Payee Amount Gl Code Remarks
1/1/2005 2213 Con Edison 226.77 7320 Utilities
1/1/2005 2214 utica 392 7065 Insurance
1/5/2005 2215 utica 113 7065 Insurance
1/5/2005 2216 Met Life 177.5 7065 Insurance
1/1/2005 2217 BUCHA005--Buchanan Petro 383.1 7320 Utilities
k Stubs

1/1/2005 2218 Capital One 2871.08 7380 other misc

1/1/2005 2219 ABC 1500 7095 office rent
1/1/2005 2220 CDE 10000 7095 Rent
1/1/2005 2221 Premier Athletic Club 250 6730 Advertising
1/3/2005 2222 Central Hudson 308 7320 Utilities
Enterring Manual Check

1/3/2005 2223 Frontier 35 7320 Utilities

A summary off check

h k stubs b iis made
d iin excel,
l and
d then
h
entered in system, also facilitating in bank reconciliation
Bank Reconciliation
 Pull Data from Clients A/R &
Sales Tax & Use Tax
Accounting Software
Tax
Monthly & Quarterrly Sales T
Doing M

Calculations for Sales

Tax
 S l
Sales T
Tax & U
Use T
Tax
Monthly & Quarterly Sales Tax

Payment Voucher for Client &

Filling up Sales Tax Form
Doing M
 H
How it works
k ?
Operational Workflow Process

Login Window
Virtual Desktop H
How it works
k ?
 KPO Accounting
A ti

How can a CA become VIRTUAL & practice GLOBALLY?

Virtual Connectivity

R
Remote
t &S
Secured
d

Real-time Information

24/7 Online Access

Data Backup

All users are virtually connected and can work from any location. The
network is secure, the data is protected and all information is in real-time.
It’ like
It’s lik working
ki online
li with
ith your clients
li t using
i h t d applications.
hosted li ti
 H
How it works
k ?
Dual Monitors

Source Docs Accounting

Email Software
 H
How it works
k ?

Dual Monitors - Enter Information into Accounting Application

Source Docs
Accounting Software
 CLIENT CPA T
Tax W
Work
k Fl
Flow
Start
INDIA
Will tax
Will
Client submits Additional return be Scan source
India perform
source docs info needed? no completed
p on the no yes documents
tax return?
spot?
C1
yes no
yes Upload source Work on
docs to DMS tax return

C2
Complete, review, and Work on
approve tax return w/ client tax return
C5 Are there
any outstanding
yes queries?

Are there
Gather all necessary info and find no
any outstanding
answers to
t any outstanding
t t di queries
i yes queries?
C3
no

Complete tax return

C4
Client signs Review and approve
tax return tax return

C6 C5 CONTROLS
C1: Log client info in Tax Return Ctrl Sheet
(TRCS)
( )
End C2: Enter issues into DMS and log date in TRCS
C3: Track and resolve issues/queries in DMS
(only for tax returns prep’d in India)
C4: Log date in TRCS
C5: Log date in TRCS
C6: Close the task by logging date in TRCS
 O
Overseas fi
firm C
Concerns

Who would handle my

client’s accounting How can I view &
data…their work control my Financial
ethics?? Information?

What about my data Is that going to affect my

security
it & client
li t Financial Decision making?
interests?

How would the payment

mechanism
h i b
be?
?
 H
How it works
k ?

Infrastructure
Well spaced work place
Necessary furniture and fixtures.
Pentium IV, 512MB RAM and above.
Dedicated Internet leased line(254 kbps – 1:1)
Dual Monitor System or Split Screen
Windows XP and Citrix Client Installed