Both accounting firms and CAs are engaged in accounting and taxation support but they don’t have the same expertise per se. Business owners in India often struggle to choose between a local CA and an accounting firm as they are not aware of the major differences between them. 

That’s why I spoke with Finsmart Accounting - a leading outsourced accounting firm in India - to share the major differences between a local CA & an accounting firm. Read on!

Local CA vs. accounting firm

The below differences will help you in choosing the right one for your business:

Size and Structure

An accounting firm can be some accounting professionals working together or a large multinational organization with accountants, taxation experts, and managers. A local CA, on the other hand, is typically a practitioner working alone or with a small staff. If you're looking for limited tax filing or bookkeeping support, a local CA may be a better fit. If you're looking for a wide range of accounting resources, an accounting firm fits the bill.

Here’s how accounting and compliance works with Finsmart

MIS Business Reports

A company needs accurate and timely MIS reports to make strategic decisions and monitor its financial health and performance regularly. Local chartered accountants generally do not produce regular MIS business reports. From generating balance sheets and cash flow statements to performing budget-to-actual comparisons and performance analyses of different departments, accounting firms can cover all aspects for creating accurate monthly MIS business reports. 

Technical Expertise

Reputed accounting firms are well-versed in the latest accounting technologies such as Sage, Tally, Salesforce, and SAP. Their proficiency in these cloud-driven tools allows them to confirm data accuracy, minimize financial errors, and ensure overall positive financial health, making them valuable assets for Indian businesses. CAs on the other hand don’t have the vast technical know-how.

Need help with payroll? Check out these payroll services in India

AR AP services 

One of the crucial aspects to consider when comparing local CAs and accounting firms is the ability to manage accounts payable and receivable. Local chartered accountants don’t usually handle these cash flow indicators. 

Accounting firms in India, however, possess the capability to scrutinize as well as track the flow of payments. They can easily assist in creating accurate financial forecasts, determining current cash flow, and modifying or optimizing management practices.

Local CA vs. accounting firm: Final thoughts

Both service providers bring their own share of advantages and are suited to unique needs. However, it’s pretty clear that accounting firms are more suited for organizations that need support on a vast range of accounting chores like bookkeeping, taxation, AR/AP, payroll, and also paperwork.

I hope that the above post helped you in learning about the major differences between a local CA and an accounting firm.

Have queries to ask? Drop them in the comments or email them at sales@finsmartaccounting.com to get a quick reply from top accounting experts. Learn about outsourced accounting pricing in case you no longer want to bother with accounting functions.