Bookkeeping and accounting outsourcing firms that bill foreign CPA practices or businesses must list every foreign invoice in a monthly EDF to their AD bank, due 30 days after the month ends. The work is delivered online, so mode of delivery is Internet; the usual codes are SAC 998222 (accounting and bookkeeping) and purpose code P1005 (accounting, auditing and tax consulting), both to be confirmed with your CA and bank.
Key takeaways
- One EDF per month covers all foreign clients; each invoice is one Part 2B row.
- In white-label arrangements, your service recipient is the foreign accounting firm, not its end clients.
- FTE, hourly, per-file and fixed-fee billing all reduce to the same thing on the EDF: invoices.
- Tax-season spikes mean larger EDFs in some months — plan for the extra rows.
- Export under LUT and keep the LUT wording on every invoice.
Who you are actually serving
Outsourcing firms often do work for the end clients of a foreign CPA or accounting practice — reconciling a US dental clinic's books, or preparing working papers for a UK sole trader's accounts. But your contract and invoice are usually with the accounting firm.
That matters on the EDF. Part 2B asks for the service recipient's name, address and country — that's the firm you invoice, not the clinic or sole trader whose ledgers you touched. The end clients don't appear anywhere on the form. If you invoice end clients directly (some firms do, for small businesses abroad), then they are the recipients.
Billing models and how they land on the EDF
| Model | Typical invoice | EDF treatment |
|---|---|---|
| Dedicated staff (FTE) | "2 FTE accountants, November 2026" | One row per monthly invoice |
| Hourly | Hours × rate, with a timesheet | One row per invoice; keep timesheets in your own file |
| Per file / per return | "38 bookkeeping files processed" | One row per invoice, however many files it covers |
| Fixed monthly fee | Flat retainer per client | One row per invoice |
| Year-end projects | Lump sum for a set of accounts | Row in the month the invoice is raised |
Whatever the model, keep descriptions precise: "Bookkeeping and bank reconciliation services, November 2026" is better than "Services rendered". Your bank and your GST records will read the same description.
Codes to use
SAC. Accounting and bookkeeping services are commonly classified under 998222. If you also provide tax preparation, payroll or advisory, some lines may belong under other codes; ask your CA, or check with the SAC code finder.
Purpose code. The bank attaches the purpose code to each inward payment. For accounting, auditing and tax consulting the usual code is P1005. If a FIRA shows something unrelated — a generic code or a software code — ask for a correction promptly. Our purpose code finder lists the common options.
Worked example: Ledgerleaf Services Pvt Ltd
Ledgerleaf, based in Ahmedabad, serves two US CPA firms and one Australian practice. Its October 2026 invoices:
| Invoice | Recipient | Basis | Currency | Amount | Approx. INR |
|---|---|---|---|---|---|
| LL/26-27/061 | Brookfield CPA Group (USA) | 3 FTE, October | USD | 7,800 | ₹6,50,000 |
| LL/26-27/062 | Maple & Finch LLP (USA) | 212 hours at USD 22 | USD | 4,664 | ₹3,89,000 |
| LL/26-27/063 | Southbank Accounting (Australia) | 46 files at AUD 85 | AUD | 3,910 | ₹2,16,000 |
| LL/26-27/064 | Brookfield CPA Group (USA) | Tax season overflow (one-off) | USD | 2,500 | ₹2,08,000 |
Total: about ₹14,63,000 across four rows, due 30 November 2026. All delivered online — mode of delivery Internet. All four use SAC 998222. Ledgerleaf exports under LUT, so no IGST.
Each invoice is below ₹10 lakh. That lets Ledgerleaf use the periodic realisation declaration to close EDPMS entries once paid, rather than sending invoice-by-invoice evidence. It sends one declaration per quarter, using the realisation declaration tool.
Seasonality and the EDF
Accounting outsourcing has busy seasons tied to client-country deadlines. In those months you may raise many more invoices, including one-off overflow bills. Two practical points:
- Bigger forms, same deadline. A month with 30 invoices is still due 30 days after month end. Start the EDF early.
- Don't backdate. If overflow work spills into the next month, invoice it when it's done. Backdating to keep a client's billing "in season" creates mismatches between the invoice date, the EDF month and GSTR-1.
GST and LUT for accounting exports
Export of services is zero-rated under Section 16 of the IGST Act if the Section 2(6) conditions are met — including place of supply outside India and payment in convertible foreign exchange (or INR where RBI permits). Most outsourcing firms export under an LUT on Form GST RFD-11, with this line on each invoice: "Supply meant for export under LUT without payment of IGST".
One area to discuss with your CA: whether any part of your arrangement could be seen as an intermediary service (for example, if you arrange services between a foreign firm and another provider rather than doing the work yourself). Straightforward bookkeeping you perform is generally a principal supply, but the facts of your contract matter. Our article on intermediary services and GST explains the issue.
The EDF is a FEMA declaration and doesn't change your GST or income-tax obligations. This is general information, not legal or tax advice.
Collection habits for accounting firms
CPA firms usually pay reliably, but they also batch payments and deduct bank charges. Three habits keep your EDPMS position clean:
- Ask clients to quote invoice numbers in payment references.
- Send a matching note whenever one payment covers several invoices or arrives short.
- Track the 9-month window — services must be realised within 9 months of the invoice date. If a client disputes hours, resolve it well before then or ask your bank for an extension on a reasoned request.
Frequently asked questions
Who is the service recipient on the EDF for white-label accounting work?
The foreign accounting or CPA firm that contracts with you and receives your invoice. The end clients whose books you work on don't appear on the EDF. If you invoice an end client directly, that client is the recipient.
What SAC code do bookkeeping outsourcing firms use?
Accounting and bookkeeping services commonly use SAC 998222. Payroll, tax preparation or advisory lines may need different codes, so confirm each service line with your CA.
Which purpose code applies to accounting services exported from India?
P1005 covers accounting, auditing and tax consulting. The bank assigns the code on the inward remittance, so check every FIRA and ask for corrections promptly if needed.
Do I declare FTE billing differently from hourly billing?
No. The EDF lists invoices, not billing models. Whether an invoice is based on FTEs, hours or files, it becomes one row in Part 2B with its amount, currency and description.
Can one EDF include clients in the US and Australia?
Yes. One EDF per month can cover service exports to one or more recipients in different countries. Each invoice row records the recipient's country.
Bottom line
For accounting outsourcers, the EDF is a monthly roll-call of invoices to foreign firms, coded consistently and delivered over the Internet. Prepare yours with the free EDF form generator and close smaller invoices through a quarterly realisation declaration.
This guide is general information for Indian businesses, not legal or tax advice. Rules and bank processes change — confirm specifics with your AD bank or chartered accountant.