Accounting is at the core of all businesses — it’s a crucial function for managing an organization’s resources and skills. However, there are times when the organization doesn’t have enough manpower to conduct its own accounting, and this is when outsourcing this function is a good idea.
Check out these essential features that you should consider if you’re thinking about outsourcing your accounting services.
Cost Advantage: Minimizing operation costs is the primary rationale behind outsourcing accounting services for most business owners. However, never compromise on quality just to save a few dollars — it’s important to maintain a balance between quantity and quality of the services provided by your outsourcing partner.
Fair Pricing: If you’re looking at using an outsourced accounting firm, you’ve probably already done the math to figure out what you can afford and what will lead to savings versus hiring an in-house team. With that number in mind, find out what companies are charging for outsourcing. Don’t just sign with the first company that meets your pre-specified number. Instead, get estimates from a few different organizations and compare the services they offer with the prices they’re quoting you. Use this data to make an informed decision about which will work best for you.
Data Security: A reputable accounting firm will manage your data with utmost privacy and ensure that each transaction is secure. This is crucial because the accounting function contains a lot of sensitive information, which you’ll be handing over to your accounting partner. So verify the security protocols they have in place to safeguard your data and prevent its misuse, especially those related to your business’ physical security, records disposal and data management practices.
Service Level Agreement: This agreement essentially states all key performance indicators required to measure the performance of your service provider. So ensure that every single detail is written clearly in the agreement, so there’s no room for confusion or ambiguity later, especially about the quality of the services you’ll be receiving.
24/7 Access to Your Records: Your outsourced accounting partner may not be available at every hour of the day, but you might need access to your records at all hours. That’s why it’s important to work with a company that provides you with a way to review your documents whenever you want. This could mean the records are kept on a shared drive, in the cloud or in some other format where you can access them at your convenience.
The Team: It is important to know who will be handling your accounts. Ensure that the people taking care of your balance sheets are industry experts. Verify that they have the appropriate skills, certifications and experience to meet your requirements. Also check if they are up to date on all laws and compliance issues, and that they have handled the accounting for businesses your size in the past.
Market Reputation: Accounting is a time-consuming and complex task, so it’s better to go with an accounting outsourcing company that has a good track record and long years of experience in the field. The best way is to research the market and check their reputation and credentials. Another way is to ask for references and contact those companies to get their opinions. Instead of asking standard questions like “Tell me about XYZ Accounting,” ask direct questions like “What was their usual turnaround time?” and “Did you ever have a period when you couldn’t reach them?”