20 Common Doubts About Accounting Outsourcing

1. 20 Common Doubts About Accounting Outsourcing Do you know today 63% of businesses prefer outsourcing accounting services and only 23% perform in-house? Does it mean that outsourcing accounting services are simple? Accounting outsourcing is not as simple as flipping a switch. Accounting department is like “Oxygen” of any business. Therefore neglecting the financial aspects of your business will let you down and you may suffer a loss. Luckily, accounting outsourcing has many financial blessings. That amazingly helps to reduce the company’s operating cost, increase your profits, and improves the efficiency and effectiveness of your business. Accounting outsourcing has remarkable benefits. The fact is that it helps in making your business more flexible and agile which you can’t get anywhere else. Hope you agree with me. Are you also planning to outsource accounting services?

2. You first need to research the service and find out who can be your credible outsourcing partner before handing over the large portions of your business. In this post, I will help you in clarifying your doubts that arise before selecting any outsourcing services. Here are the top 20 doubts that will clear your all queries about accounting outsourcing 1. Does the service provider have a reasonable traceable track record? This is the basic check you need to do with any service provider. They are operating for how many years. They have provided their service to what type of clients. Do they get the customer regularly? Can they show any clients positive testimonial? Is it possible to discuss with any of their clients and take the feedback about their service? How they resolve the clients’ problems? Can they show any case study to understand their client service from start to end? An experienced service provider is always safer. If they are new to business then look for the quality of management. 2. Does the service provider have the cultural traits required to be a credible partner in managing your processes? The key trait that your service provider should have is to accept your mission as its mission. If your mission is to have business success in the market place then they should do everything necessary to achieve this. Their key value proposition should be your success not just processing the transactions at a lower cost. The best way to find this is by discussing it with their existing clients. 3. Does the service provider have quality processes in place? This is an obligation for any service provider to uphold the quality of work for their clients. But you need to research whether they can create value by a superior set of processes that gives you a competitive edge than others. You have to involve with your outsourcing partner, set your expectations clearly and ensure that happens. If you are outsourcing for a lower cost only then you may not get the best benefits of outsourcing. 4. What flexibility do they provide in service level agreements? Your service provider should be flexible in using all the latest accounting software packages. They should be capable to match your future needs and requirements.

3. You need to check the terms and conditions before signing any contract so you can terminate the contract if you are not satisfied. 5. Does the service provider match your companies’ requirements? This is the most obvious question – Can the service provider do what you are expecting from them. Do they have the capability to meet your business needs? Have they executed the project in a similar line earlier for any client? 6. How competitive are the service provider’s prices? Pricing is the key factor in selecting a service provider but it doesn’t translate into the best option. Therefore you need to check their quality. The best way is to start with them on a paid pilot project. If they execute this well then they can be given large projects with confidence. 7. How much cost will be saved? Though you have heard that cost saving is amazing by outsourcing accounting but how much cost saving is more important for you to decide to outsource? It would be 30%.... 50%.... or more. You should have clarity on it in the first place. 8. What kind of expertise does your service provider have? Accounting professionals are at different levels in terms of knowledge, experience, and expertise. You need to assess the service provider's expertise by verifying service offerings. Some may offer a variety of services whereas some will offer specialized services in fulfilling a particular role. Look for the service providers who are prepare to handle complex tasks. Remember one thing that quality comes at a price. So even though you want to reduce the cost by outsourcing services, don’t pull the strings tight and settle for less. Select the qualified professionals and established firms as a long term investment with calculated profit. 9. How your business will be managed by the service providers? You have to check whether the service provider appoints a manager to look after the people working on your account? Is the manager familiar with your business and processes? Is there someone who is well aware of your company’s culture? If someone knows about your particular company then it would be easy for him to guide others to maintain the process as you desire. This will provide you confidence that your work will be done by the service provider as per your expectations.

4. 10. Are the service provider financially sound? This is very important for you to investigate the financial stability of the service provider. It will help you to do the partnership agreement with them positively. If they are financially weak then it gives a clear indication that they can suddenly fold their business overnight. It should not happen that you have done the agreement with someone and he is no more in the market. 11. Is this service scalable? If your business grows and needs more staff at that point in time whether the service provider can increase the resources immediately. Do they have a ramp up capacity? What is the training program for new staff? Who will provide the training, you or the service provider? Who takes the complete responsibility of new staff? Gather the above answers and identify the salable capability of the service provider. 12. Are the outsourced workers are competent and skilled? No doubt the primary purpose of outsourcing accounting services is cost-saving but you can’t compromise on quality. Therefore workers who are engaged in your accounting should be competent to handle and maintain the quality. Even they can improve upon it. If the workers are not skilled then they may do costly mistakes. Clients have come to you for quality output, not for the money. 13. What security and confidentiality processes are followed by your service provider? Data security is the biggest concern for most business owners while outsourcing accounting. A lot of critical and sensitive information is disclosed in accounting. To prevent fraud at the outset you need to check whether the service providers meet basic compliance standards and follow stringent protocols to protect your data or not. Discuss what security measures are taken by them to secure the data. What type of access is provided to their employees in databases? The server room is well secured or not? You need to know about their network security in place, encryption methods used on their websites and login portals. If the service provider has a virtual company with remote employees then how they measure the monitor location and distribute data. Do they have important credentials like ISO certifications to demonstrate their robust and secure information technology systems? The purpose of all these checks is to ensure that financial data should not leave the premises of the outsourcing partner.

5. 14. How well the service provider is in communication? Effective communication is critical to all business dealings. So it is important to check that the outsourcing partner maintains healthy communication. Are they following the established channels to convey messages? Are they clarifying your doubts? Outsourcing partners should maintain all transparency with you. They should convey messages clearly across the table. You and the outsourcing partner should be on the same page on all aspects to your business 15. Do they have the policy to handle a data breach? What will happen if the physical files are stolen or servers are crashed? What policies does the service provider have in place to mitigate the data damage, recovery of it and compensate the affected company? Which process do they follow to alert about the security breach? Whether emergency measures they will take? This will help you to plan out a strategy for eliminating the security breach in advance? Go with that service provider who has an emergency action plan before an emergency occurs. 16. What happens to the files when you are finished with them? This question generates curiosity in understanding how financial data is manage. Once the service provider completes the work what they do with older files. Whether they store the old files for a limited period of time or always keep them at hand or destroy the files after giving you copies? Are the files stored can be written in CD or made available through FTP? 17. How will the information be exchanged between you and the service provider? You need to check and ensure with your service provider how the information will be exchanged mutually. Either through messages, or by writing emails, or over the phone, etc. 18. How long the service providers usually take to complete a project? The smallest turnaround time is the USP of the service providers. However, the completion time depends upon many factors like the project size, type, complexity, volume of work, urgency, etc. It also depends upon partners’ expertise and skills to complete the large volume of work efficiently within the smallest time frames.

6. 19. Is the service provider flexible? You need to check whether the outsourcing partner can take certain tasks or is it mandatory to outsource the entire project to them. 20. Does the service provider have the required infrastructure and technology? You need to check and ensure that the service provider has the required infrastructure and technology in place to offer accounting services. How accounting outsourcing could boost your business? Accounting outsourcing could help businesses by reducing workload and handling the finance part with much proficiency. They cut down the cost of several business expenses such as hiring, training, and handling payroll services. Accounting outsourcing can help boost your business performance in many ways: • o ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ Frees up time to focus on core areas of business Enhanced overall performance and productivity Increases business revenue and reduces operating cost Eliminates over payments and underpayments Reduces the risk of internal fraud Achieve high quality of accuracy Faster turnaround time Efficient payroll processing and direct deposit Gain from expert assistance India has become the hub for outsourcing accounting services as all required resources are available. Accounting outsourcing in India is cost effective. It is designed to save you money. The most important benefit is that the most qualified manpower is available at affordable cost and in a much more efficient way. Conclusion Outsourcing accounting services is a great way for you to optimize business operations while reducing overhead costs. If you are looking to streamline processes, raise the level of your finance team, and grow your business. Then partner with a credible outsourcing firm. They can take your accounting needs in the right step forward. Put your efforts to make accounting outsourcing services work for your business. Clarify the doubts mentioned here before choosing your outsourcing accounting partner!