Agreement of outsourcing of the chief accountant in Poland. The most important elements

In the first article of our series devoted to outsourcing of the chief accountant, we discussed the pros and cons of such a solution. It is time for us to present further steps that must be taken once you made a decision to outsource the duties of chief accountant to an accounting firm.

What should be done to achieve a fully successful outsourcing of the chief accountant? How to plan such a process?

There are three key elements here – the agreement concluded between the organization and the accounting firm, the proper introduction of the chief accountant to the tasks they will be responsible for, as well as ensuring an effective cooperation and proper allocation of duties between the chief accountant and the internal accounting team.

Agreement of outsourcing of duties of the chief accountant

In this article, we will discuss the first component, namely the agreement regulating the rules of such cooperation. What should it include in order to ensure a harmonious cooperation and minimize the number of disputes between the entities?

Above all, the parties must make sure that the agreement will regulate:

• the procedures, the detailed scope and deadlines for the provision of accounting services,
• the rules and method of communication between the person delegated from the accounting firm to serve the role of the chief accountant and the organization and its internal accounting team (it is particularly important to appoint a person who will become the coordinator of the cooperation on behalf of the organization),
• the standards of document circulation between the organization and the chief accountant as well as the deadlines for provision of documents,
• the liability and remuneration of the accounting firm for the rendered services.

The scope of services, method of provision and the applicable deadlines must be described in the agreement in the most specific and detailed way possible. It will allow avoiding doubts and conflicts within the scope of duties of the chief accountant in the course of performance of the agreement.

In general, the scope of duties of the chief accountant in case of outsourcing of such services will be as follows:

• providing substantive support for the internal accounting team and help in solving the emerging problems related to bookkeeping,
• supervision over the process of preparation and sending of JPK_VAT files,
• review and verification of financial data at the end of the month,
• supervision over the end-of month closure and monthly reporting along with supervision over the preparation of reports to the group (if required),
• supervision over reporting to the Polish Central Statistical Office/National Bank of Poland,
• preparation of the monthly/quarterly calculations and annual tax returns concerning corporate income tax or withholding tax,
• preparation of the financial statement,
• supporting the team during the audit of the financial statement and supervision over the process.

Based on our experience in serving the function of chief accountant at many organizations, we can definitely say that it is of crucial importance to precisely decide on the duties of the chief accountant and the way they will distributed between the person serving this function and the internal accounting team already at the stage of conclusion of the agreement. In order to make the cooperation way more effective, before the conclusion of the agreement, the accounting firm should carry out a detailed inspection of the accounting processes and relevant persons responsible for individual processes should be assigned.

One should also make sure that the agreement accurately identifies the rules of remuneration for the provided services. Most often, the remuneration is specified as flat-rate remuneration while certain services exceeding the standard scope can be considered as the so-called additional services. This is usually the case in consultancy concerning settlement of unusual transactions or support during the implementation of a new accounting system. The remuneration for additional services usually depends on the amount of labor (hourly rates).

Another important element that needs to be clarified in the agreement is the responsibility of the accounting firm for improper performance of assumed duties. Additionally, one needs to make sure that the accounting firm has a valid liability insurance for damage caused in relation to the provision of accounting services.

The organization also needs to ensure as to the confidentiality of data that will be provided to the accounting firm. That is why the outsourcing agreement must include provisions on keeping confidentiality by the company that will provide accounting services.

After negotiations between the accounting firm and the organization and with acknowledgment of the above-mentioned requirements, the agreement can be finally signed.

Of course, the whole process does not end there. What are the next steps then? We will describe them in the next article of our series.

Author: Agnieszka Tyczyńska-Osińska — Senior Manager of Accounting Department at MDDP Outsourcing