Cybersecurity Best Practices When Outsourcing Accounting

28 July 2025

• Start with outsourced providers who adhere to the highest levels of data security and can show real SOC 2 or ISO 27001 credentials. If it’s not certified, it’s not secure.
• End-to-end encryption, MFA, and VPNs are basic infrastructure for keeping offshore transfers airtight.
• Skip the promises and look at the systems. Security reviews, narrow user permissions, and a tested incident plan should exist.

Outsourcing accounting can cut costs and reclaim time, but without proper cybersecurity practices, it exposes your firm to significant risk. According to a recent report, the average breach in the financial sector costs $5.9 million, the highest among all industries.

Accounting firms are prime targets because they handle sensitive financial and personally identifiable information (PII), and the shift toward offshoring only raises the stakes. Many U.S. firms now offshore some component of their accounting operations, often without clear cybersecurity frameworks. That leaves data vulnerable during transit and at rest, a problem exacerbated by the growing sophistication of phishing, ransomware, and insider threats. 

Cybersecurity is a core compliance and client trust issue. One weak outsourced link can jeopardize your firm’s reputation and regulatory standing. Clients don’t want to leak their data. They care that it was revealed. 

This article breaks down the cybersecurity best practices you should demand from any outsourced accounting partner, whether onshore or offshore. 

1. Request Recognized Security Certifications Like SOC 2 and ISO 27001

When selecting an outsourced accounting provider, verify whether they meet widely accepted data security standards. Two of the most relevant certifications in this space are SOC 2 Type II and ISO 27001. These aren’t just optional credentials or promotional tools. They represent thorough, independent audits of the firm’s data protection practices, including system controls, availability, processing integrity, confidentiality, and privacy.

Ask for the most recent audit documentation. Review the scope of the certification, the tested controls, and any remediation plans. If a provider cannot provide this information or appears unfamiliar with these standards, it may signal gaps in their operational maturity or data governance protocols.

2. Verify Encryption Protocols for Both Data in Transit and at Rest

Data protection must extend across every stage of its lifecycle, especially with cross-border outsourcing. Encryption is essential. Look for vendors that use Advanced Encryption Standard (AES) 256-bit encryption for stored data and Transport Layer Security (TLS) 1.2 or higher when data is in transit.

It is important to go beyond a checkbox. Ask whether data is stored in public cloud environments or whether they use secure, purpose-built client portals. Ensure file exchanges are never handled over unsecured email or consumer-grade file sharing tools. These practices leave sensitive financial information exposed. Enterprise-level platforms with built-in encryption are the industry norm, not the exception.

3. Enforce Role-Based Access Controls and Multi-Factor Authentication

Access to your data should be structured with precision. Implementing role-based access control (RBAC) ensures that individuals only have access to the systems and data necessary for their specific job functions. This significantly limits the potential impact of any security breach.

Multi-factor authentication (MFA) should be mandatory across all systems, including accounting software, cloud platforms, and communication tools. Ensure credentials are not shared among users, and request a detailed overview of how access rights are assigned, revoked, and monitored. Weak access policies increase exposure and shift unnecessary risk back to your firm.

4. Conduct a Formal Security Review Twice Per Year

Cybersecurity practices evolve rapidly. If your outsourcing partner’s security posture is not reviewed and updated at least every six months, it could create blind spots that put your clients’ data at risk. Schedule recurring reviews of their IT security protocols and incident response readiness.

These reviews should include internal and external penetration testing reports, updated access control logs, audit trails, and any remediation actions taken since the last review. A reliable partner will make this information available as part of routine oversight. If this data is difficult to obtain or the provider avoids these conversations, that should raise concerns.

5. Require VPN Access and Continuous Endpoint Monitoring

Every remote or offshore employee should connect through a secure virtual private network (VPN). Additionally, each endpoint device, such as laptops and mobile phones, must have antivirus protection and be subject to continuous monitoring.

Monitoring tools should track usage behavior, detect unusual activity, and maintain detailed audit logs that are easily accessible. Ask your provider whether devices are managed through centralized tools and whether alerts are reviewed in real-time. Security is not limited to a firm’s data center; it extends to every endpoint that touches your firm’s financial information.

6. Define a Cyber Incident SLA in Writing

Service-level agreements (SLAs) for cyber incidents are a must. These agreements define how your outsourcing partner will respond in the event of a breach or data incident. An effective SLA should include specific timeframes for initial response and resolution, escalation procedures, points of contact, and post-incident reporting protocols.

Do not rely on assumptions or informal promises. Request a documented incident response policy outlining your provider’s obligations, including timelines and responsibilities. This documentation becomes critical when an incident occurs and time-sensitive decisions must be made quickly and precisely.

What security protocols should outsourced accounting partners follow?

Outsourced accounting providers should follow strict security protocols, including role-based access control (assigning permissions based on job function), multi-factor authentication for all users, data encryption (both in transit and at rest), regular security audits, and comprehensive employee training on data protection best practices. They must also maintain incident response plans and secure backups to ensure business continuity in case of a breach. Contractual agreements should clearly define security responsibilities and compliance expectations.

How do I ensure my client data is protected during offshore transfers?

To protect client data during offshore transfers, use end-to-end encryption for all transmissions, and verify that your provider complies with cross-border data protection laws (such as GDPR, CCPA, or other relevant regulations). Ensure the provider maintains secure communication channels like VPNs, implements strict access controls, and conducts regular security audits. Data processing agreements that specify security standards and establish accountability for data handling and breach notification are required.

Is it safe to share accounting system access with outsourced teams?

Sharing accounting system access with outsourced teams can be safe if proper controls exist. Use the principle of least privilege (granting only the access necessary for each role), multi-factor authentication, single sign-on solutions, and granular, client-specific permissions. Avoid password sharing and ensure access is revoked promptly when no longer needed. Regularly audit access logs and monitor for unusual activity to detect and respond to potential risks.

What compliance standards should outsourced providers meet (SOC 2, ISO, etc.)?

Reputable outsourcing providers should meet SOC 2 (for security, availability, processing integrity, confidentiality, and privacy), ISO 27001 (information security management), GDPR (if handling EU data), CCPA (California consumer privacy), and other industry-relevant standards. Ask for certificates of compliance and verify that audits are conducted regularly. Contracts should require adherence to these standards and specify evidence of compliance as part of service delivery.

How often should I audit or review my outsourced provider’s cybersecurity policies?

For most firms, audit your provider’s cybersecurity policies at least annually; firms with higher risk profiles or sensitive data should consider quarterly reviews. Regular audits help identify vulnerabilities, ensure compliance with standards, and provide assurance that security controls remain effective. Major system changes, incidents, or regulatory updates may trigger additional audits. Transparency reporting and evidence of remediation for any issues found are required.

Final Thoughts

Outsourced accounting can drive significant operational efficiency, but these benefits are only sustainable when matched with rigorous security standards. Firms must move beyond surface-level assurances and conduct thorough due diligence across compliance certifications, technical controls, and provider culture. The responsibility for data protection does not stop at the border—it requires active engagement and verification from firm leaders.

For organizations at any stage of outsourcing, whether exploring new partnerships or scaling existing relationships, cybersecurity must be a non-negotiable element of every vendor evaluation. Leading providers will already have mature policies, advanced tools, and a demonstrable commitment to security. Your role is to validate these claims through audits, transparency, and ongoing dialogue.

QX Accounting Services supports U.S. accounting firms in scaling their operations without compromising data security. If a potential partner does not prioritize protection as a core part of their offering, it is time to reconsider the relationship. The right outsourcing strategy balances growth with governance, ensuring that efficiency gains are built on a foundation of trust and resilience.

Why QXAS for Secure Outsourced Accounting? 

• ISO 27001-certified global delivery centers 
• Role-based access across all accounting platforms 
• Dedicated client portals with encryption 
• VPN-secured offshore operations 
• 2FA/MFA enforced across endpoints 
• 24/7 IT monitoring and security audits 
• Regular penetration testing and compliance reviews 

Book a Consultation 

You can outsource the work, but you can’t outsource the responsibility; get it right. Data security isn’t optional. Book a free consultation to assess your cybersecurity posture and learn how QXAS protects your firm from the inside out. 

Divya Ramaswamy

Combining creative flair with a solid foundation in research-oriented content marketing, Divya assists accountants in understanding and navigating pressing industry issues. With a knack for distilling complex data into actionable advice, she helps professionals make informed decisions to enhance their practices.

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