Outsourcing Accounting Functions: Choosing the Right Provider

Outsourcing accounting functions can be an effective way for small and medium-sized accounting firms to reduce costs and increase efficiency. However, choosing the right outsourced accounting provider can be a challenging process. In this article, we’ll provide a guide to help you choose the right outsourced accounting provider for your firm.

Determine Your Accounting Needs

The first step in choosing an outsourced accounting provider is to determine your firm’s needs. Different providers offer different types of services, so it’s important to identify the services you need. For example, do you need bookkeeping, tax preparation, payroll processing, financial analysis, or all of the above? Identifying your accounting needs will help you narrow down your search to providers who can meet those needs effectively.

Look for Experience and Expertise

Once you have identified your outsourcing accounting functions needs, the next step is to look for an outsourced accounting provider with experience and expertise in those areas. Ask potential providers about their experience working with firms like yours and the types of accounting services they specialize in. Look for providers who have experience working with CPA firms in your industry. Also, be sure they have a proven track record of delivering quality services.

You can further your due diligence by going through the providers’ reviews. You may even want to speak directly with their clients. This will provide you with greater insights on how the offshoring provider operates and what are their advantages and drawbacks.

Check for Accreditation and Certifications

Another important factor to considering outsourcing accounting functions and choosing an outsourced accounting provider is accreditation and certifications. Seek out outsourcing companies that are accredited by professional organizations, such as the Association of Chartered Certified Accountants (ACCA). Additionally, see if they have certifications such as Certified Public Accountant (CPA), The Chartered Institute of Management Accountants (CIMA), or Certified Bookkeeper. These accreditations and certifications indicate that the outsourcing partner has met certain standards of excellence and professionalism.

In addition to the above certifications, a reliable accounting outsourcing partner will also adhere to industry standard certifications such as ISO 27001 and SOC 2. UK and EU accounting practices should ensure an accounting outsourcing partner is GDPR compliant to maintain data integrity. 

Consider the Provider’s Technology and Tools

Technology is a crucial component of modern accounting. When pursuing outsourcing accounting functions it’s important to choose an outsourced accounting provider who uses up-to-date technology and tools. Explore potential providers who use cloud-based accounting software and who have experience with a variety of accounting software platforms. Make sure that the provider’s technology is compatible with your own systems. Additionally, they should have robust security measures in place to protect your business data.

Assess the Provider’s Communication and Customer Service

Good communication and customer service are essential when working with an outsourced accounting provider. Look for outsourced accounting firms who are responsive to your questions and concerns and who communicate clearly and regularly. Consider providers who offer a dedicated point of contact and who are available to answer your questions and provide support when you need it.

Evaluate the Provider’s Pricing Structure

Finally, consider the pricing structure of potential outsourced accounting providers. Seek out service providers who offer transparent pricing and who are willing to work within your budget. Consider providers who offer flexible pricing models, such as fixed fee or hourly billing, and who are transparent about any additional costs or fees.

Assess their Data Security and Confidentiality Protocols

Data security is a paramount concern when it comes to outsourcing accounting functions. However, these concerns can be effectively addressed with proper due diligence and selecting a reputable partner. Accounting offshoring partners like Entigrity prioritize data privacy and security by implementing robust IT and privacy policies, ensuring the utmost confidentiality of client data. These measures give accounting firms the peace of mind that their sensitive financial information is well-protected throughout the outsourcing process.

By entrusting your accounting functions to a trusted provider, firms can focus on growth while knowing their sensitive client information is in safe hands. Their emphasis on data security, backed by certifications and adherence to regulatory frameworks, demonstrates their commitment to maintaining the highest confidentiality and privacy standards.

Considerations When Outsourcing Accounting Functions

In conclusion, outsourcing accounting functions can be a great way to reduce costs and increase efficiency for small and medium-sized CPA and accounting firms. However, choosing the right outsourced accounting provider is crucial to the success of the relationship. By following these six steps, you can identify a provider who meets your accounting needs, has the necessary experience and expertise, is accredited and certified, uses up-to