The Challenge That Indian Accounting Poses On Service Providers

Online, July 19, 2010 (Newswire.com) - The conundrum that any organization providing service in a different country faces is the degree of localization they can provide to their end-users. But such enhancements always come with certain costs which would only result in more dependence on the provider.

Like the necessity of account of charts for the organizations in India. The charts are to be prepared based on the Indian Accounting Standards developed by the Institute of Chartered Accountants of India(ICAI). Preparing a financial system based on these standards take a healthy unit of workforce resulting in costs to be incurred for these modifications there.

Indian accounting charts necessarily require three important module in any fiscal year namely

Trial Balance report
Profit and Loss Account
Balance Sheet

Now it is a great headache for the chartered accountants to make use of generic systems developed on the standards of some other country leaving them stranded for other mode of calculations. Also the management of receipts, bank and cash payment ,contra slips and other sales and purchase vouchers become extremely difficult.

Though most of the Proprietary systems do provide these specifications they come up with huge cost and also dependency on the providers. In Opensource ERP providers OpenERP does provide them in their accounting module. They also added operational activities like Analytical accounting and Activity based accounting.

More and more of such localizations can only help domestic companies. Glocalaization is the biggest challenge for the service industry - global in vision while local in action. Let us hope for companies to make advances in these areas.