The 5 Step Process for Outsourcing Bookkeeping Services to India

Outsourced bookkeeping is one of the ways accounting firms can free up valuable time that can be used to deliver business advisory services. This is just one of the benefits of outsourcing the bookkeeping and accounting tasks of your clients. Other strategic benefits include building capacity as and when you need it and adding more services to your portfolio. Even if your firm doesn’t have the repertoire to offer certain accounting services, you access these services through accounting outsourcing.

This article aims to answer the often asked question – how to outsource bookkeeping services, by taking you through a series of essential steps to ensure effective and profitable outsourcing.

So, let’s begin.

1. Ensure Your Accounting Firm, and Its In-House Staff is Aligned with the Idea of Outsourcing

This is important, and many firms are so gung-ho about outsourcing compliance-related tasks that they forget that they need a buy-in from all stakeholders, including in-house accountants. There is always a fear in employees’ minds that outsourcing can result in redundancy, and as can be imagined, this bumps up the stress levels and can result in a lack of productivity. To ensure this doesn’t happen, layout a strategic plan in front of them. This plan will include the way ahead for the accounting firm, propelled by the productivity, efficiency, and low-cost of operations, courtesy of outsourcing.

It is also vital to lay the fears of your staff to rest and impress upon them the need to outsource bookkeeping services to India to free up their time. This time can be used to develop new high-margin skillsets and put them to use.

2. Don’t Work with Just Any Outsourced Bookkeeping Provider

The key to your firm being able to experience all the benefits of outsourcing bookkeeping is by making sure you partner with the right provider. The qualities of a good outsourcing provider apart from specialist bookkeeping expertise, experience, and a low-cost engagement model include:

Uninterrupted Availability: A reputed provider works out of state-of-the-art infrastructure backed by a Business Continuity Plan (BCP) to ensure no bookkeeping process is impacted even in emergencies.

High-Performance Metrics: Outsource bookkeeping services to India only if the provider agrees to meet demanding standards of accuracy. Typically, you don’t want to review the bookkeeping tasks at your end before sending them to the client. It is therefore imperative that your provider meets the highest quality standards. One of the proofs that you can look for is an ISO 9001 certification for quality.

The Turnaround Time: One of the key reasons you will want to outsource is to deliver work faster to your clients. Therefore, it will be a good idea to work with a provider who can turn around bookkeeping tasks quickly but without compromising on quality.

Services Provider Response Time: Imagine a scenario wherein you have a query or a problem or want to assign a bookkeeping task on priority? If your provider doesn’t respond quickly to your communication, you might find the task getting delayed or the query remaining unsolved for some time. To avoid this problem, work with a provider who is available at your time and also someone who gives your firm the capability to monitor task progress with a tracker app.

Data Security: The fact that you share sensitive financial information with outsourced bookkeeping solution providers shouldn’t keep you up at night. An important quality to look for is the provider’s security certification. SOC 2 compliance is ideal.

3. Identify Compliance, SLAs, and Any Other Contractual Requirement and Make Sure They Will be Met

Through your conversations with the outsourcing provider, you will convey your expectations and what you hope to achieve from the outsourcing services. But, outsourced bookkeeping solutions will only deliver value if these expectations are mentioned in the contract. But, that’s not all. Just having a worded contract is not enough. It would help if you made sure that the provider meets the SLAs in the agreement in their entirety.

So how do you go about ensuring that contract expectations are achieved? This can be done by working out the review metrics with the services provider and comparing the deliverables with the requirements that have been stipulated in the contract. Also, underline what happens if there is deviance with the stipulation and mention the corrective action plan.

It is important to note that firms offering the best outsourced bookkeeping services for accounting firms are not apprehensive about subscribing to strict SLAs.

4. The Right Engagement Model

This needs some strategic thought behind it. If you are outsourcing bookkeeping for the first time, you will need to begin from scratch. Evaluate the amount of work coming in. If you do not have clarity, go with the pay-as-you-go model. If you think you have clarity and enough work for a resource working full-time on bookkeeping tasks, go with a Full-Time Equivalent or FTE model.

The choice is yours, but here’s a tip. Even if you want to go with the FTE model and think you require more than one, start with one resource and once you have confidence, add more FTE’s. There is also the whole seasonal talent addition to outsourced bookkeeping. You might want to scale up your outsourcing relationship in the busy season and scale it down in the lean season.

5. It’s Not Just the Cost Savings

Some firms might limit themselves to seeing bookkeeping outsourcing purely from savings-tinted glasses. This is not a bad thing. Affordability and building cost efficiencies is a crucial benefit of outsourcing. However, purely from the perspective of an accounting firm, the question – how much does outsourcing bookkeeping cost and what is the ROI in terms of savings is not the only one to be asked.

Think about how you can derive more value from outsourcing. What are the other efficiencies you can bake into the mix? Think from the client’s perspective. Will outsourcing help you address their needs better? Will outsourcing help you give them more insightful information? Will outsourcing help you offer wholly personalized bookkeeping services to a particular marquee client? These and many more questions should be asked and answered to help you make the most of outsourcing.

Conclusion

It is imperative that your move towards outsourcing is well-planned and backed by solid research. Plan your outsourcing and make sure you are well aware of the internal challenges you might face while moving to an outsourced bookkeeping model. If you want to experience all the benefits of outsourced bookkeeping solutions, this is the bare minimum you must do before outsourcing.