An Outsourced Accounting and Bookkeeping Provider -a Panacea? not

An outsourced accounting and bookkeeping provider

A panacea? Not.

OK, now you have selected an outsourced accounting and bookkeeping service and you have negotiated a contract that protects your interests. Now comes the hard part.

You need to treat your vendor like a valued employee. Realize that you have to teach outsourced accounting and bookkeeping provider about your business.

Just because your outsourced accountant or bookkeeper is in India does not mean he is an all-knowing Yogi.

If you have a good documentation of your business processes and a good description of your accounting processes and policies, it will make it much easier for the outsourced accounting and bookkeeping provider to learn your business.

Most small companies do not have such documentation. So you should at least pull together a short synopsis of what business you are in, where you make money, your principal customers and vendors, your payroll schedule etc. If at all possible, invite the provider to visit your business.

A good outsourced provider will work with you to learn your process. The workflow description she puts together will cover much of your routine work – however, most of the time in accounting is spent on handling exceptions.

The outsourced accounting and bookkeeping provider will help you reduce the exceptions if you support her. A simple example is expenses incurred that have not been approved by management. Every time that happens your time and the outsourcer’s time is wasted. The blindingly obvious answer is to stop such unauthorized payments.

Another benefit to having an outsourced accounting and bookkeeping provider is the separation of people who make the payments and people who keep the books. It makes many kinds of fraud harder to perpetrate.

Expect some mistakes and occasional schedule slippage. The outsourcers are trying to improve their processes – however, no one has achieved six sigma quality levels of one mistake per million.

Expect honesty from your vendor. If there is a potential schedule slippage you want them to notify you. Similarly they need to take responsibility for their work.

In the next article we will discuss the quality of the work and why it is critical.