Posted by Shivali Anand
October 20, 2021 | 3-minute read (520 words)
Entrepreneurs typically contemplate an outsourced accounting service when they find themselves spending more time generating financial reports than growing their business. By offloading accounting duties, they can save time, money and worry.
That said, there are important considerations to make before hiring an outsourced accounting firm. We've compiled a list of five such things to watch for.
You don't want to entrust your accounting services to just anybody; you want to know that the individuals looking after your balance sheets are professionals in the field. Check the team members' credentials to make sure they have the necessary certificates and licenses, that they are up to speed on regulatory and compliance concerns, and that they have previously handled accounting for firms of your size.
You'll also want to make sure you have a set point of contact rather than merely an 800 number where you obtain accounting guidance from anyone who answers the phone. Speak directly with the person who will be your point of contact, and make sure your communication styles are compatible.
- Who will be in charge of your accounting?
One of the most frightening aspects of outsourcing your accounting is the possibility that your confidential financial information will fall into the wrong hands. Confirm that the outsourced accounting business has strong measures in place to safeguard and preserve all of your data. You'll also need a secure means to upload and download files, as well as an encrypted or secured email system.
- How is your data protected?
You may not be able to reach your outsourced accounting partner at all hours, but you may need access to your records at any time. That is why it is critical to work with a firm that allows you to check your documents anytime you choose. This could mean the information is stored on a shared disk, in the cloud or in another format that you can access whenever you choose.
- Will you have around-the-clock access to records?
Why would you give your sensitive financial information to a firm without first checking references? You wouldn't employ a dog walker without first checking references, so don’t provide your sensitive financial information to a company without first checking references. Request references from the firm and follow up with those references to get their feedback. As a business owner, ask the questions that are most essential to you, such as, "What was their normal turnaround time?" and, "Did you ever have a period when you couldn't reach them?"
- Have you looked at the company's references?
If you're thinking about hiring an outsourced accounting service, you've probably already crunched the numbers to see what you can afford and how much money you'll save versus hiring an in-house staff. Find out how much firms charge for outsourcing with the latter figure in mind. But don’t just sign with the first firm that comes up with a number that matches your criteria. Instead, obtain quotes from a few other companies and compare the services they provide to the pricing they're offering. Make an informed judgement based on the information you've gathered.
- Is the price reasonable?