Business process reengineering in India: how to redesign processes that work
Business process reengineering means rethinking a process from start to finish rather than improving one step at a time. In India, a redesign has to deal with more than efficiency: GST e-invoicing, TDS, MSME payment rules and statutory reporting are built into most finance processes. This guide explains our approach and the results to expect.
When a process needs reengineering
- Month-end close takes too long and depends on a few people working late
- Invoices are keyed manually, matched by email and paid late
- Teams work around the ERP using spreadsheets
- Auditors keep raising the same findings
- Work is moving from the US to India, or between locations, and needs to be standardised first
- Growth, an acquisition or a new system has made the old process unworkable
- Costs per transaction are high compared with similar businesses
Our approach
1. Map the current process
We walk through the process with the people who run it, map every step, handover and system, and measure cycle times, volumes, errors and rework. Where system logs are available, process mining shows the real flow rather than the documented one.
2. Find root causes
We separate symptoms from causes: duplicate approvals, missing master data, manual reconciliations, poor system configuration or unclear ownership.
3. Design the future process
We redesign the process to remove unnecessary steps, simplify approvals, automate repetitive work and build controls into the flow. Each design choice is checked against Indian tax and compliance rules and against your risk control matrix.
4. Pilot and implement
We pilot the new process in one team or location, adjust it, and then roll it out with training and updated SOPs.
5. Measure
We measure the same indicators after go-live to show what has changed and where further work is needed.
Examples of redesigned processes
| Process | Typical redesign |
|---|---|
| Procure to pay | Purchase orders and contracts in the system, invoice capture by OCR or supplier portal, automatic three-way matching, TDS applied by vendor category, payments by bank integration |
| Order to cash | Contracts and price lists in the system, automatic invoicing and e-invoice generation, automatic cash application, credit control dashboards |
| Record to report | A close calendar, standard journals, automated reconciliations, intercompany matching with the US parent |
| Payroll | Single source of employee data, approvals for changes, automated statutory contributions and payslips |
| Compliance | A compliance calendar with owners, automated reminders and reconciliations for GST, TDS and ROC filings |
Indian requirements to design around
- GST e-invoicing: businesses above the turnover threshold, currently ₹5 crore, must generate e-invoices through the government portal, so invoicing must integrate with it
- Input tax credit: credits depend on suppliers' filings, so the payables process should check supplier compliance
- TDS: tax must be deducted at the right rate when invoices are booked or paid, and returns filed quarterly
- MSME payments: amounts due to micro and small suppliers must be paid within the time allowed, or the expense is disallowed for income tax until paid
- Audit trail: accounting software must keep an edit log that cannot be disabled
- Data in India: electronic books must be backed up daily on servers in India
A process that ignores these rules may look efficient but will create exposures in the GST and income tax audit reports.
Reengineering before moving work to India
Our outsourcing in India and organisational restructuring pages cover the wider set-up for capability centres.
Automation: what works and what to watch
- ERP configuration: often the lowest-cost automation is using features of the existing ERP properly
- OCR and invoice capture: reduces data entry for supplier invoices, with review of exceptions
- Robotic process automation: useful for repetitive, rule-based tasks across systems, but brittle when screens change
- Bank and portal integrations: host-to-host payments, bank statement imports, GST and e-invoice APIs
- Workflow tools: approvals routed by amount and category, with a full audit trail
Automated controls still depend on IT general controls such as access and change management. These should be documented and tested through internal audit.
Keeping controls intact
Process redesign often removes manual checks. That is fine when an automated control replaces them, but risky when nothing does. For every step removed, we ask what risk it addressed and how that risk is now covered. Segregation of duties is reviewed again for the new roles, and the risk control matrix is updated before go-live, not after the next audit.
Measures we use
| Process | Measures |
|---|---|
| Procure to pay | Cost per invoice, first-time match rate, days to pay, early payment discounts taken |
| Order to cash | Days to invoice, days sales outstanding, credit notes as a share of sales |
| Record to report | Days to close, number of manual journals, reconciliation exceptions |
| Compliance | On-time filings, interest and late fees paid, notices received |
Savings from redesign often feed into a wider cost optimisation programme.
Making the change stick
- Involve the people who run the process in the design, not just in training
- Explain why the change is happening and what it means for each role
- Run the old and new process in parallel for a short, defined period
- Retire old spreadsheets and workarounds so they are not used again
- Track the new measures publicly within the team
- Review after three and six months, and adjust