Behind the Engagement: The Accounting Outsourcing Process

How does outsourcing engagement work? When does it start? What happens after I sign a contract? If you’re looking to outsource any of your office functions, then this blog is for you.  

Let’s delve deeper into the accounting outsourcing process to focus on its nitty-gritty procedures. 

 
In our last blog, we talked about the different types of outsourcing. Now, let's discuss what you should do before starting a collaboration and while working with an outsourcing partner.  

Before The Engagement 

Assessing your business’s needs  

Take your company under a detailed observation to know what you need to look for in an outsourcing partner. Evaluate your internal and external capabilities and performance. Know what processes you have in place. Is there something you can work on with outside help? How much support do you need for this particular aspect of the business?  

When it comes to accounting outsourcing, it's crucial to identify which accounting processes can be handed over to a service provider and which ones should be retained in-house. Common accounting tasks that are often outsourced include payroll processing, accounts payable and receivable, tax preparation, and financial reporting.  

On the other hand, strategic financial planning and core decision-making financial processes might be better retained within your in-house team to maintain control and confidentiality. 

After careful scrutiny, you can decide which outsourcing process model gives you an edge in raising your team’s performance. 

Consider the cost  

When you outsource your functions to a third-party service provider, you must be ready to make some financial investment. 

Assess if your business can handle the expense of the engagement and the amount you can allocate for this initiative. Doing so can help you filter service providers based on the cost of their services. At the same time, knowing your budget lets you communicate with your shortlisted providers if you prefer to start with a full-time, part-time, or hourly engagement. 

Find an offshoring partner that offers maximum value for your money and provides the best experience for your operations. To get value for your money, we recommend finding a service provider that specialises in the function you're planning to outsource.

For example, outsourcing to a BPO company with a core focus and specialisation in finance and accounting (F&A) can be a better idea since it gives you the confidence that you'll be working with professional accountants who are knowledgeable about different accounting concepts, principles, and regulations. 

Upon Onboarding 

Sign a contract  

After choosing the right outsourcing partner for your business, you must see to it to sign a legal contract. This will be the binding document that holds pertinent information about the partnership. 

The contract should contain the following: 

• Agreed payment 

  This will depend on your requirements. You can either have Full-time Employees (FTE) who have fixed dedicated hours in a week or fixed hourly rates. The more employees you dedicate to your outsourced team, the higher the cost. This factor will tell you how much you’re going to spend on the engagement. 
   
   

• Respective functions 

  The contract should clarify which responsibility belongs to whom. Make sure all the agreed-upon services are distinctly laid down to make a sense of priority. This way, you can avoid misunderstandings pertaining to the workload. 
  

   

Turnover of files  

An important part of the outsourcing implementation process is the turnover of your documents to your contracted team.  

To get things done, your partner should have access to your old files to assess their workload. They can start organising these files and upload it in a shared system where both parties can see real-time updates and convenient access when you need to see these documents.  

Train your team   

Manage your team by providing training and webinars. Build a comprehensive training program to make sure that your contracted staff has fully grasped the intricacies of the assigned job. This works best especially if they use a different software or work in a different approach. Some even bring their team members on-site to fast-track this process.  

Communicate regularly 

After onboarding, consistent communication is a must. The accounting outsourcing process will sail smoothly if you do regular check-ins with your team.  

Aside from assigning a key contact in your in-house and offshore staff, holding meetings once a month can help you track the progress of your project and inform them about what needs to be prioritised. Let them know what you expect so they can better prepare for anything that comes their way. In addition, communicating with them regularly can help make  sense of normalcy and camaraderie among the group. 

Read Next: Cultivating A Support System in Your Organization 

If you’re new to outsourcing, learning the accounting outsourcing process can help you ease your worries about the engagement. Make sure all your goals are met because after all, you outsourced your functions to get more work done than get your workload heavier than before. 

In need of a reliable accounting outsourcing partner to help with your books? 

Consider D&V Philippines. We are a professional services firm managed by accountants with a proven expertise in the Australian tax compliance and standards. Schedule a free consultation with us today so we can know how we can help you. 

You can also download our whitepaper Outsourcing: How to Make it Work to know how we can make outsourcing work for your business. 

This article was first published on 24 March 2021 and updated on 25 July 2024. Edited by: Angelica Garcia