Choosing Bookkeeping Outsourcing Partner: 10 Questions to Ask

27 January 2025

As an accounting firm, maintaining client books with high precision is crucial, yet managing costs is equally important. While an in-house bookkeeping team offers direct oversight, the financial burden—from salaries to infrastructure—can quickly accumulate. Choosing bookkeeping outsourcing emerges as a cost-effective solution, particularly offshore services, which can significantly streamline your SG&A expenses while maintaining quality and efficiency.

1. WHAT PHYSICAL SECURITY MEASURES ARE IN PLACE TO SECURE YOUR BUSINESS PREMISES?
2. WHAT DATA ENCRYPTION PROTOCOLS PROTECT YOUR ONLINE ASSETS?
3. WHAT'S YOUR EXPERIENCE IN PROVIDING OUTSOURCED BOOKKEEPING SERVICES?
4. WHAT'S YOUR EXPERIENCE WITH COMPANIES IN OUR INDUSTRY AND OF SIMILAR SIZE?
5. COULD YOU BRIEFLY TALK ABOUT YOUR EXECUTION STRATEGY?
6. WHO WILL BE MY POINT OF CONTACT?
7. WHAT OTHER SERVICES DO YOU PROVIDE?
8. WHEN CAN YOU DELIVER THE MONTHLY REPORTS?
9. DO YOU HAVE COUNTRY-SPECIFIC ACCOUNTING STANDARDS KNOWLEDGE?
10. WHAT INFORMATION DO YOU NEED FROM US FOR A QUOTE?
ENSURE EFFICIENT BOOKKEEPING WITH A RELIABLE PARTNER

You no longer need to be anxious about the short supply of talent, either. The world seems to be realizing these benefits—a report by ReportLinker reveals that the global finance and accounting outsourcing market will grow to $51.5 billion by 2027.

There are also qualitative benefits that accrue when you outsource bookkeeping services. You’ll allow your senior staff more time to spend on other aspects of your business instead of overseeing the firm’s bookkeeping tasks.

The numbers justify the use of bookkeeping outsourcing services, but the data’s security can often cause a slight reluctance among decision-makers.

Indeed, it would be best if you got to know the service provider a little better before signing a contract. To start you off on the right foot, here are ten questions you should ask your bookkeeping outsourcing services provider to see if they fit the bill.

1. WHAT PHYSICAL SECURITY MEASURES ARE IN PLACE TO SECURE YOUR BUSINESS PREMISES?

Consider this question as something similar to a brief internal controls audit. Ask the firm how they secure the physical location of the servers where they’ll store your financial records. Enquire about the staff that has access to the servers, both physically and electronically. Ask pointed questions about security compliance and whether they meet all security protocols under SOC 2 Type II.

2. WHAT DATA ENCRYPTION PROTOCOLS PROTECT YOUR ONLINE ASSETS?

Start with the basics and check if the company’s website has an SSL certification. All you need to do is visit the website and look for the ‘lock’ icon on the left of the URL bar. SSL certification confirms encryption on the website and assures you that a cybercriminal won’t intercept the information you share with the services provider on the website.

Also, ensure that they deploy advanced encryption tools to protect the data stored on their IT systems.

In addition to encryption, you should learn how data is distributed among team members and if it’s appropriately monitored. The company’s servers should restrict staff’s ability to download data onto their devices; you certainly don’t want to put your financial data at an unknown person’s disposal.

3. WHAT’S YOUR EXPERIENCE IN PROVIDING OUTSOURCED BOOKKEEPING SERVICES?

Experience is a valuable asset in the context of accounting. CPAs would gladly attest that getting your hands dirty with the actual work is just as important as the qualification. A firm with a good track record gives you the confidence that you’re in good hands.

Experience is also crucial for the efficiency of a business’s internal processes. A firm that has been in business for over a decade is less likely to miss deadlines or overwhelm itself with the excess workload.

4. WHAT’S YOUR EXPERIENCE WITH COMPANIES IN OUR INDUSTRY AND OF SIMILAR SIZE?

All businesses could benefit from bookkeeping outsourcing services, but not all service providers have experience in a given industry. Most service providers have a select set of industries they work with, or even better, just one sector.

This gives them an edge because they’re niche experts. As you know, accounting principles and taxation often vary across industries and company sizes. A CPA firm, for instance, maintains books on a cash basis instead of an accrual basis.

A bookkeeping outsourcing services provider that has a thorough understanding of the cash basis of accounting and its impact on your tax liability and cash flow will be able to serve you better.

5. COULD YOU BRIEFLY TALK ABOUT YOUR EXECUTION STRATEGY?

It’s good to be on the same page about the value the company will bring to the table right out of the gate. Think of it as a preview of the more comprehensive strategy they’ll use to provide you with a frictionless service.

Just a few words about their strategy can give you a lot of insight into their approach. A good bookkeeping outsourcing services company will typically give you precise answers about their workflow, from receiving data from the client to the delivery of service.

6. WHO WILL BE MY POINT OF CONTACT?

Preferably, the bookkeeping outsourcing services provider should assign more than one point of contact. If one of the members is on leave, or if you need some information right away while a member isn’t available, having multiple points of contact can keep things moving.

7. WHAT OTHER SERVICES DO YOU PROVIDE?

Outsourced bookkeeping services are only one component of your yearly accounting cycle. It’s worth enquiring if the bookkeeping outsourcing services provider can also prepare your financial statements, do your taxes, and manage payroll, among other things.

Bookkeeping outsourcing services offered alongside other services can shorten the time required for the entire accounting process to complete. The reason? It eliminates the need for inter-firm data transmission and coordination.

8. WHEN CAN YOU DELIVER THE MONTHLY REPORTS?

If your bookkeeping service gives you a date, be suspicious. Delivery dates are tricky to commit to for a bookkeeping service since they’ll rely on you to get the information they need. A direct response with a specific time is likely an attempt to sell.

Instead, a good service provider will consider this an opportunity to learn about when you’d prefer to get the reports and what you’d like to see in the information provided.

They’ll even answer your question with a target date and a due date instead of just the due date. Experienced service providers realize that CPAs have busy schedules, so they’ll even disclose that they’ll try to be consistent about following up on information they need from you.

9. DO YOU HAVE COUNTRY-SPECIFIC ACCOUNTING STANDARDS KNOWLEDGE?

Since tax laws and financial reporting standards depend on the company’s location, the bookkeeping requirements for your overseas branches may differ from those of your home branch.

For instance, the service provider who provides bookkeeping and accounting outsourcing services to your firm must be familiar with the US GAAP frameworks.

10. WHAT INFORMATION DO YOU NEED FROM US FOR A QUOTE?

This is more of a screening question. Established businesses tend to have clearly outlined processes and always start with a preliminary assessment.

A service provider that bypasses the assessment and offers you a proposal upfront should make you wary. You’ll need to provide the provider with a clear estimation of your needs, requirements, and expectations from the provider. It is important to think of the whole process as a strategic endeavour.

ENSURE EFFICIENT BOOKKEEPING WITH A RELIABLE PARTNER

When a service provider skips the assessment phase and immediately presents a proposal, caution is advised. It’s essential to provide a clear and detailed outline of your firm’s needs, requirements, and expectations to ensure alignment. Choosing bookkeeping outsourcing should be viewed as a strategic endeavor that requires thorough evaluation.

These questions are designed to uncover any potential red flags. Choosing the right bookkeeping outsourcing services can lead to substantial savings and have a significant impact on your bottom line—especially crucial in a pandemic-affected economy where cost minimization isn’t just beneficial; it’s essential. Partnering with an experienced outsourcing provider can streamline your operations and help achieve your financial goals more effectively, ensuring both accuracy and cost-efficiency in managing your bookkeeping needs.

Indrajeet Pradhan

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