The Ultimate Checklist to Choose an Outsourcing Service Provider

Finding an outsourcing service provider that really understands the needs of your accountancy firm is crucial and can make a difference. Here’s a quick checklist on how to choose one.

1. Assess the scope of outsourcing

What is the precise volume of work you need to outsource? How many resources would you require to manage the workload?

Start with creating a list of tasks that need to be outsourced. Ask yourself, are these tasks part of your expertise? If you answered no, then outsourcing may be the right solution for you. It is in this stage that the unknowns must be flushed out and confronted.

2. Talk to colleagues and peers

When in doubt, consider getting a second opinion. It will help you look at certain aspects you may have missed earlier.

Speak to your colleagues, peers and even your competitors for their opinions and recommendations on outsourcing. You can also contact institutions like ICPA, ICAEW and ACCA.

3. Interview multiple outsourcing providers

There is a pool of outsourced accounting service providers out there. How do you determine the best one for you? Here’s a tip - Interview several of them!

Talk to multiple outsourcing firms and gather data from them which you can later compare to make the right decision. Ask them questions about their communication systems, hiring process, management practices, data security measures, pricing structure, and so on.

4. Gauge their technical expertise

In today's fast-paced world, technology is king. Which latest tools would you like to integrate into your processes? Is your outsourcing partner equipped with them?

Check your outsourcing service provider’s infrastructure and technology capabilities. Get involved with them, attend their staff meetings, and interact with your extended team to gauge their work culture and expertise.

5. Ask the outsourcing provider for insights

You may have communicated your requirements perfectly but has your outsourcing partner understood them? Ask them to find out.

A good way to find out whether your outsourcing partner has understood your requirements is to ask them for advice on how they could manage your compliance jobs more efficiently.

6. Conduct a background check

How credible or reliable is your outsourcing partner? What do their existing and previous clients say about them?

Someone may sound good on the phone and even perform well in the interview. But you should do your research and make sure they are qualified. Review your outsourcing partner’s professional qualifications. Ask them for references. Look them up on social media. A thorough background check can reveal a lot about a firm.

7. Give weightage to industry experience

Has your outsourced accounting service provider worked with a practice of a similar size as yours? How much is their industry experience?

No two firms are the same just as no two fingerprints are the same. Having an outsourcing partner with a solid experience in dealing with clients similar to yours goes a long way.

8. Logistics and data security

How does your outsourcing partner treat logistics and data security? Do they have a solid process to manage clients’ confidential data?

To understand your outsourcing partner’s security policy and procedures, ask them if they have been accredited by internationally recognised organisations. Speak to them in detail to understand if they work on servers and share data externally.

9. Confirm the fee structure in writing

As the old adage says, ‘If you pay peanuts, you get monkeys’. Don’t partner with the cheapest outsourcing provider you can find.

Choose an outsourcing partner that provides you the best deal and value-for-money services. Set the prices with variances in advance before you agree to a contract.

10. Establish a review period

How often do you communicate with your outsourcing service provider? Have you built a relationship with them?

Too many outsourcing relationships have failed as accountants do not prepare themselves for honest feedback. Communicate with your outsourcing partner regularly. Use meetings and reports to exchange feedback on how the partnership is going and be honest in your conversations.

Are you ready to beat the staffing woes and transform your practice? We can help! Call us at +44 208 146 0808 or email us at [email protected] to take the conversation forward.