Accounting outsourcing market trends in Russia


Businesses in Russia are increasingly outsourcing their payroll and accounting to professional service providers. According to the biggest Russian rating agency RAEX, the accounting outsourcing market grew by 12% in 2019.

What accounting functions are most often outsourced and why? How has the demand for outsourcing services changed over the past quarter? What is the impact of digitalization now and in the future? Find the answers to these and many other important questions in the interview with Ekaterina Lozhkova, Partner and Financial Director, SCHNEIDER GROUP.

– In your opinion, what factors have influenced the demand for accounting outsourcing services in Russia in 2019? In particular, for payroll & HR accounting and records management?

– Payroll calculations are becoming more complicated and isolated from regular accounting. To comply with legislative requirements in HR accounting and records management, businesses have to employ more qualified – and expensive – personnel and invest heavily into professional education. Mandatory reporting has also become more complicated: for example, personal income tax reporting has become much more voluminous. This makes outsourcing payroll and HR records management to professional service providers more attractive and efficient.

– What factors continue to influence the market today? Have you experienced any changes in demand for accounting outsourcing services during the lockdown? What is the market outlook for accounting outsourcing in the short-term?

– The complication of HR records management continues to play a great role and I think this is not going to change much in the future. We haven’t experienced any decrease in the demand for accounting outsourcing during the lockdown and I’m quite positive for the future. Businesses prefer to focus on their core processes, the supporting ones are readily outsourced to professional providers. The key here is the partnership approach: the ability of service provider to offer high quality service, easily adjust own working processes to the customer’s specifics and offer full range of services – from outsourcing standalone functions till complex turnkey solutions – depending on the customer’s needs.

– Have you experienced any delays in service delivery? How has the lockdown influenced your customers, international businesses working in Russia & CIS?

– I’m proud to say that we have met all our commitments during the lockdown. Our customers didn’t face any delays or service interruptions despite switching to remote work. We were always ready to ensure their businesses are fully operational. Together with our customers we have successfully made the way from onsite to online and back.

Of course businesses have become more cautious. Each decision requires more approval stages. However some of our customers see the current situation as an opportunity to enter a new market during the time when “weak players” have left the field and customer demand is underserved. Partnership model with accounting outsourcing service provider is especially relevant for them.

– What are the major trends in business processes outsourcing?  What is the impact of digitalization? Do you consider active M&A in the accounting outsourcing can change the market landscape?

– Digitalization and robotization is definitely the main trend in business process outsourcing. Efficiency and cost reduction are primary business goals that can be achieved with automation of business processes and active implementation of paper- and contactless working processes into the everyday operations. We at SCHNEIDER GROUP see great potential in implementation of fully paperless process of HR records management.

Accounting outsourcing market in Russia is definitely going to change after the pandemic. Our strategy in this regard is to focus on partnerships with providers of complementary services – to be able to offer complete service package.

Ekaterina Lozhkova, Financial Director& Partner, SCHNEIDER GROUP