A Beginner’s Guide: How to Choose the Best Outsourced Accounting Service Provider

Outsourcing your accounting and financial tasks to an external vendor can bring multiple benefits to your small business, including the following: 

• Significant cost and time savings
• Greater precision
• Higher operational efficiency
• Accurate reporting

But the big question is: How does one choose the right outsourced accounting agency to get these game-changing benefits? The key is to understand the capabilities of the outsourced partner and how they will be able to support your small business.

Here are six things to keep in mind when outsourcing your finance and accounting operations to an external agency:

1. Expertise and experience

Once you have shortlisted a few outsourced accounting firms, begin by carefully understanding the nature of their expertise and the exact skills they bring to the table. The idea is to choose an outsourced partner who understands the intricacies of your sector and can provide valuable insights. 

At the same time, look at their experience in your business niche and their reputation in the industry. An external agency with expertise in your sector may be familiar with the specific accounting regulations, reporting and compliance requirements, and the industry best practices you need.

2. Accreditation and certifications 

When selecting an outsourced accounting provider, it’s crucial to consider accreditation and certifications. Look for providers accredited by professional organizations like the Association of Chartered Certified Accountants (ACCA) or holding certifications such as Certified Public Accountants (CPA), Certified Bookkeeper, etc. These credentials indicate that the provider adheres to established standards of excellence and professionalism.

3. Track record

Check the external agency’s track record. Look for success stories from similar industries and examine testimonials, reviews, and case studies. Their track record will help you evaluate their performance and reliability and compare their services and pricing within the market, enabling you to make an informed decision.

4. Scalability and flexibility

As your small business grows, your accounting and finance needs may change. Therefore, choosing an outsourced service provider that can scale its services to address the evolving requirements of your small business is crucial. Be sure to enquire about their capacity to handle an increased workload or additional assistance when necessary.

Additionally, evaluate whether the external agency you’re considering is flexible and can customize solutions for your unique and complex needs. 

5. Data security

Outsourcing accounting and finance processes involves sharing sensitive financial information with an external vendor, so you must ensure that no breach or theft can occur that would put your data at risk. 

Look for outsourced firms with robust data security measures, including encryption, firewalls, and secure data centers. Additionally, ensure they follow best practices for data management and records disposal.

6. Transparency

Avoid outsourced agencies whose service-level agreements are unclear and charge hidden costs. Additionally, determine if the external firm will adequately utilize your allocated budget.

The final word

Like any business decision, finding the right outsourced accounting service provider is a strategic move that needs careful consideration and a well-thought-out approach. Use the above guidelines to navigate the finance outsourcing solutions and find a reliable partner, adding value to your business, improving efficiency, and contributing to long-term success.

Want to know more about startups and what it takes to get started? Since 2006, Escalon has helped thousands of startups get off the ground with our back-office solutions for accounting, bookkeeping, taxes, HR, payroll, insurance, and recruiting — and we can help yours, too. Talk to an expert today. 

This material has been prepared for informational purposes only. Escalon and its affiliates are not providing tax, legal or accounting advice in this article. If you would like to engage with Escalon, please contact us here.