Posted by admin
May 18, 2020 | 4-minute read (618 words)
If you’ve come to the point in your entrepreneurial journey where you’re spending more time creating financial reports and less time growing your business, it’s possible that you’ve decided to outsource your accounting services. Many startup founders find that they save time, money and stress by moving from an in-house accounting department to an outsourced one.
However, there are a few essential factors you should keep in mind before you choose an outsourced accounting firm. We’ve put together five considerations that all entrepreneurs should ponder as they move toward outsourcing.
1. Who Will Be Handling Your Accounting?
You don’t want to hand your accounting services off to just anyone — you want to make sure that the people taking care of your balance sheets are industry experts. Check the credentials of the team members to ensure that they have any appropriate certifications and licenses, that they are up to date on all laws and compliance issues, and that they have handled the accounting for businesses your size in the past.
You’ll also want to confirm that you’ll have a fixed point of contact (POC) rather than just dialing an 800 number and getting accounting advice from whomever answers the phone. Speak directly to the person who will be your POC and ensure that your communication styles are in sync so you can be sure you’ll have a synergistic relationship if you do choose to sign with that company.
2. What Data Security Strategies Are in Place?
One of the most nerve-wracking things about outsourcing your accounting is the fear that your private financial information could end up in the wrong hands. Therefore, make sure the outsourced accounting firm has strategies in place to protect all of your data and keep it safe. You’ll also want a way to upload and download documents in a safe manner, and a way to send encrypted or protected emails to one another.
3. Will You Have 24/7 Access to Your Records?
Your outsourced accounting partner may not be available at every hour of the day, but you might want to access your records at all hours. That’s why it’s important to work with a company that provides you with a way to review your documents whenever you want. This could mean the records are on a shared drive, in the cloud or in some other format where you can see them at your convenience.
4. Have You Checked the Firm’s References?
You probably wouldn’t hire a dog walker without checking references, so why would you entrust your sensitive financial information to a company before finding out what others have to say about them? Ask the company for references and contact those companies to get their opinions. Don’t just ask open-ended questions like “Tell me about XYZ Accounting.” Instead, ask pointed questions like “What was their usual turnaround time?” and “Did you ever have a period when you couldn’t reach them?” Ask the questions that are most important to you as the business owner.
5. Is the Price Fair?
If you’re considering using an outsourced accounting firm, you’ve probably already crunched the numbers to find out what you can afford and what will lead to savings vs. using an in-house team. With that number in mind, find out what the companies are charging for outsourcing. Don’t just sign with the first company that meets your pre-specified number. Instead, get estimates from a few different organizations and compare the services they offer with the prices they’re quoting you. Use this data to make an informed decision about which will work best for you.