An affirmative response to the question about whether or not outsourcing accounting services is the best solution leads to another dilemma: how to choose the best accountant?
Before we can answer this question, it is worth to ask another one: do only accounting firms provide accounting services? Today on the Polish market every entity providing bookkeeping services is referred to as an accounting firm, but some of the entities position themselves not as an accounting firm, but as an outsourcer. The difference is not only the scale of operations, the service portfolio (typically simple invoice processing and calculating taxes) and the categories of customers served.
Outsourcers are most often companies that invest in information technologies, data protection systems, security systems and raising the qualifications of employees, and they are comprehensive and multidisciplinary. Safety and control are not less important than the quality of services. That is why foreign entities, that have more experience with defining requirements and using outsourcing services, are more likely to choose outsourcers.
Regardless of the terminology, when choosing a provider of bookkeeping services, one should methodically compare the offers of several different providers. Most often the main aspects when choosing an accountant are the price of the service, the location of the office, the number of customers, the knowledge of a foreign language. It’s a list of aspects that carry specific information, but it’s still not sufficient. Presented below are the eight criteria, other than the price, that need to be considered before choosing an accounting firm.
Every company takes care of and protects its data. In many cases, by outsourcing bookkeeping services, one to some degree – often to a large degree – transfers the control over their protection to an outside entity. Accounting firms most often work on their own systems, which means that financial data is, at best, protected by different security procedures (than the ones used in the company that orders the services), and often it’s not protected at all. How to check if data is going to be properly protected? Of course, one option is to get assistance from internal audit services or, in their absence, from an external consulting firm that will carry out a security audit of the potential outsourcer. If your company doesn’t have such services and you don’t want to bear the costs of audits, it’s important to ask the potential outsourcer a few questions:
do they have an internal, written security policy – even though simply having one doesn’t guarantee security, it still shows that the company at least thinks about their customers’ safety,
how do they prevent data loss – for example, what are their backup procedures (how often, on how many independent storage devices, where are they stored). Frequently, in order to reduce costs, accounting firms don’t backup data, do it once a month, or keep backups in the office (which, in the event of fire or theft, doesn’t prevent data loss),
how do they prevent data leakage – for example, do they have software that prevents mass loss of confidential data via email, do they permit the use of USB storage devices, allow burning CDs, etc.,
how do they secure their servers – do they have the appropriate software, hardware, has an independent third-party firm ever conducted penetration tests, etc.
Systems supporting the customer’s operating activities
Currently, bookkeeping is not only data input from the invoice into the accounting system, just to do cost accounting and calculate the tax, in order to meet legal obligations. Accounting should support business activities by providing current and correct data that enables to make decisions. In order to be able to provide such (current and correct) information, the outsourcer needs to not only have appropriate systems, but also needs to have experience and knowledge regarding which information is necessary for business needs, and then has to know how to efficiently deliver it. It’s often the case that accounting firms close the month on the 25th calendar day of the next month, and provide only a balance sheet instead of the information about the current state of the accounts. The best way to verify what future cooperation with the outsourcer is going to look like is to ask them how they plan to use their systems to support the customer’s activities.
Accounting service provider very often wait passively for the customer to send in documents, and blame the customer for sending them too late to make a report, submit a declaration, etc. The outsourcer should present potential ways in which documents would be circulated:
does the company have tools facilitating the flow – thanks to modern technology, safe online access to both financial data and reports should be the standard. In addition to that, the best outsourcing companies give their customers access to systems that are used not only to communicate with the outsourcer, but also to streamline document flow in the customer’s company,
can they help with using electronic invoices effectively – despite the laws having been loosened (though, to be honest, they’re still not perfect) – few outsourcers help customers with using them,
does it offer only one classic flow (the paper one) or does it have a few alternative solutions – the document flow shouldn’t be dictated by the outsourcer (or by the internal accounting department). The flow should be adjusted to the customer’s business realities – only then the cooperation with the outsourcer is going to be effective, and at the same time it’s going to streamline other internal processes in the company,
is it possible to cooperate without sending the original documents to the outsourcer – people often think that the accountant should be „around the corner”. Apart from the obvious fact that „around the corner” there might be an office that provides low quality services – when accounting is concerned, the location of the office should be one of the last aspects to consider. Thanks to advanced technologies, a good outsourcer is able to serve a customer located hundreds of kilometers away from the office (or even – as shown by global experience – on another continent). What matters is whether or not the outsourcer has the appropriate tools, procedures and infrastructure to provide such a service.
People responsible for the service
It’s often the case that the accounting firm representative who sells the services has no contact with the customer later, doesn’t monitor anything, and the promises don’t match reality. Before signing the contract it’s important to ascertain who will provide the services, what experience does the person have, do they speak the relevant foreign language, what is the team and what roles are there in it, and most importantly, will the customer be assigned one contact person who will be familiar with all the matters related to the service provided.
Experience of the staff
Currently, you don’t even need any license to run an accounting firm. Therefore it’s important to know if the work is done by people who have the appropriate experience, certificates or who have at least participated in trainings. A professional company is committed to hiring both experienced employees and those who gain knowledge. Cooperation with a company where everyone is „self-trained” and there’s no staff with in depth knowledge and experience, can lead to problems.
Experience in managing accounting systems
It’s an important question, especially if the service is going to be provided using the customer’s accounting system. Accounting firms rarely refuse to provide the service for this reason, but unfortunately most of them are not prepared for that – especially when it comes to technical capabilities of the connection and operational efficiency (proficiency in using the functionality of the system).
The number of employees, the number of customers
More employees doesn’t mean better services, but in a crisis situation an office employing a few people is often unable to deal with various situations – whether it’s substantial challenges or increased workload during a particular period, sickness of employees or business realities. Decisions can’t be based on the number of customers alone either, but the information that the company serves 100 entities instead of 4 should give us hope that they have a customer portfolio wide enough to not disappear from the market within a month.
It might seem unrelated to the service, but multidisciplinary companies have the advantage over accounting firms providing only bookkeeping services that, if necessary, they have experts who will support us in other matters as well, for example tax advisors who help optimize taxes, lawyers in case of a legal dispute, or business advisors who help streamline the customer’s activities in selected areas. The price of the service, mentioned at the beginning, should reflect the above aspects. A small accounting firm that doesn’t have advanced systems, doesn’t provide online services and is not subject to external control – will provide cheaper services than a company that implements these systems, services and controls. It obviously doesn’t mean that you should choose the most expensive service – it’s just important to consider if the risk of paying less is profitable.