Why Foreign Accounting Providers?

Alexei Spirikhin, Director, Alinga Consulting

For many multinational companies, outsourcing accounting functions has become the corporate standard, and access to new markets is accompanied by the search for a suitable local provider. Although major Russian players have appeared on the market, foreign businesses still prefer foreign providers (with western owners and/or management). In my view, there are six main reasons for why this happens.

The most extensive and relevant experience in the market

The first outsourcers in Russia were foreign companies that arrived in the country in the footsteps of western business in the early 1990s. Representing the interests of foreign customers before the tax authorities, day in and day out they acquired tremendous expertise and an impressive pool of customers from different industries. Providers with experience working in Russia for 15-20 years and with a large number of foreign customers in their portfolios naturally inspire confidence.

Qualified English-speaking professionals

The specific nature of working with foreign customers influences the personnel policy of foreign owned accounting providers. English-speaking accountants are recruited who can competently prepare management reports and financial statements that comply with international standards, who can personally advice the customer, and who can familiarize themselves with documents and standards sent from the headquarters. For example, at Alinga we compile a ‘reporting package’ for the Head Offices of several Italian clients. The instructions are prepared in English by the group auditors (usually Big 4) at the Head Office and sent over for us to review and apply. Without English language skills our staff would not have managed such tasks.

Extensive experience using information technologies

Foreign owned providers are accustomed to working with a wide variety of premium, high-level software programs; their western customers differ from their Russian ones because of their greater degree of business process automation. Therefore, fine-tuning of everyday interaction between the customer and provider takes place quickly and constructively.

Expertise

Western businesses in Russia are turning to foreign providers to improve the stability of their operations against the backdrop of constantly changing local legislation. They are also doing so to gain access to the expertise of outsourcing: the best accounting and reporting practices, as well as successful case studies of other foreign companies. Providers who solve dozens of crucial problems for their foreign customers every day have an extensive knowledge base and are able to provide balanced and well-formed counsel on a number of issues faced by customers.

The ability to replicate corporate standards

Foreign accounting providers have the necessary knowledge and experience to uphold a customer’s corporate standards in the areas of payroll, HR administration and management reporting as well as in the area of confidentiality.

Specializing in accounting functions

The main industry ranking prepared each year by the Expert Rating Agency clearly demonstrates that the largest and leading Russian players in the market today are primarily audit and consulting groups. Provision of outsourced accounting functions in general, and financial and tax accounting in particular, is a secondary rather than a primary type of activity.

Foreign providers, on the other hand, often specialise precisely in the accounting function. It is a key business process for them, and one which they have a great interest in developing and improving. This approach scores them points in the eyes of foreign companies, ensuring long-term cooperation, stability and quality of work. This is a really powerful argument when choosing a provider and one whose validity I can personally confirm. My company works primarily with foreign businesses and is also focused on outsourcing financial and tax accounting as the most sophisticated and popular service sought out by clients. This service is responsible for more than 60% of our earnings.