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What you need to know about accounting outsourcing services

What you need to know about accounting outsourcing services

PUBLICATIONS \ 15.07.2020

Outsourcing accounting functions is a serious step that includes very important stages, from analyzing the state of your own accounting to comparing the offers of accounting outsourcing providers. Accordingly, any client faces a considerable number of questions concerning the nuances of how it interacts with the outsourcer. We have decided to gather the most important and frequently asked questions in order to dispel the myths about accounting outsourcing.

How to decide on changing from an in-house accounts department to outsourcing?

Outsourcing the maintenance of your accounting records is not such a complicated decision as it may seem at first glance: first of all, you need to weigh up all the pros and cons. Among the objective and significant benefits of this approach should be

  • striving to significantly optimize business processes,
  • reducing financial risks,
  • reducing the costs spent on accounting.

Given the fact that in western countries, almost 90% of small and medium-sized businesses use accounting outsourcing services, it is no coincidence that Acsour’s client portfolio is largely made up of foreign-owned companies. Of course, there are companies in Russia that have joined the global trend of transferring non-core functions to an external provider, but they are still few. These services are significantly more advantageous in financial terms for small and medium-sized businesses, so such businesses constitute the majority.

Will the business processes of the company change after the accounting function transfers to outsourcing?

When an organization makes a decision to transfer to outsourcing for the first time, it will need to put some time and effort into setting up processes in a new way. The key to working successfully with an accounting services provider is the constant exchange of information.

It is reasonable that a customer-oriented provider will form a service plan primarily based on your wishes, the current state of affairs and existing business processes in the company, but even in this case, from a purely psychological point of view, it is not easy to completely outsource your accounting. However, even after the setting up stage, you obtain a significant optimization of working hours, order and harmony in accounting without having to worry about the current position. You also have the opportunity to redirect your efforts to more significant business functions in the company. You do not need to think about in-house personnel, constantly changing legislation and forthcoming inspections, because the provider takes care of all this. Only the decision-making function on controversial accounting issues remains with the client, while Acsour’s experts handle everything else.

There are a lot of providers – how should you choose?

First of all, we advise you to take a look at the rating of outsourcing and consulting companies. Then you should study reviews about the company, since one of the main criteria for choosing an accounting services provider is personal recommendations. Therefore, we recommend paying special attention to the company’s reputation and image.

However, you will only be able to make your ultimate decision during face-to-face meetings with the providers of accounting functions. Thanks to these, you will be able to meet potential contact persons, experience the level of service and technological infrastructure of the company, but most importantly to assess the reliability of the supplier.

The main advantage of Acsour is that we do not provide “faceless” accounting services for your business, but become a reliable partner and adviser. We help you to make sense of any challenging situation and find the most effective solution to each problem, taking into account the specifics of your business. After all, this is facilitated by our multidisciplinary experience: among our clients are companies from a variety of industries: from the food industry and construction to the IT sphere and pharmaceutical industry. Our extensive experience in working with various businesses allows us to respond quickly to any changes and select the best solutions for each client.

Is outsourcing expensive?

The cost of accounting services directly depends on how much your company spends on internal accounting. Therefore, before starting to choose an outsourcing company, it is necessary to calculate your current accounting costs: from salaries (including all additional expenses for the social package, bonuses and appropriate taxes) to the expenses of equipping workplaces, and purchasing and maintaining the software products necessary for the accountant’s work. For example, for a company with 50 employees, it will be financially more advantageous to outsource accounting services than to keep one in-house accountant. The monthly cost of services for payroll accounting depends on the number of employees and is calculated at individual rates.

Is the outsourcer financially responsible for its actions?

Of course, this responsibility should be spelled out in the contract. Moreover, a supplementary guarantee of the company’s reliability in this case will be a liability insurance contract, the purpose of which is to provide insurance cover for possible losses of the company. For example, Acsour has made a contract with AlfaStrakhovanie group, under which the guaranteed cover for our losses is 120,000,000 rubles. This allows us to significantly raise the level of trust among our clients.

How to switch from one provider to another?

Step-by-step instructions might be as follows:

  1. Clarify the terms on which you can terminate the contract with the current provider
  2. Determine the start date of the work of a new provider
  3. Determine those responsible for submitting tax and accounting reports, if the date of transfer of cases from one company to another falls within the reporting period
  4. Collect data with regard to which program is used for the maintenance of accounting records, where the basic source documents are located, where the client bank is established, and through which program reports were submitted
  5. Provide access to the accounting database to the new provider at the setting up stage, so that it is possible to formulate questions for the company responsible for accounting before the transfer of cases

It is important that the company still has a valid contract with the previous company at the setting up stage. This safety net will allow the new outsourcer to complete the transition stage faster and, if necessary, contact the previous provider for clarification.

How long does the setting up stage last?

The setting up stage could last from a month to six months. This depends on the size of the company and the complexity of its accounting and volume of document management. At this stage, the accounting outsourcing company conducts an audit, during which it analyzes the state of accounting, the existing procedure of document management, and the business processes of the client company. As a result, you obtain an expert opinion and recommendations for further interaction.

On what date is it better to start keeping accounts with the support of the new provider?

It is better to choose the beginning of the reporting period, usually a quarter. This approach will allow the previous provider to prepare reporting for the period for which it was still responsible, and the new provider will be able to focus on current accounting and tasks. In any case, the issue of the submission of reporting should always be agreed separately to avoid the occurrence of “blind spots” that may result in fines for the company.

How will interaction between the contact persons of both companies be organized?

In order to organize the most effective communication, it is necessary to treat the provider in the same way as your own accounting department, which was earlier part of your team. It is important to inform your managers of all your plans and of the facts about the business; otherwise the outsourcer will not be able to take this information into account in its work. We recommend organizing regular working meetings with the provider, as well as annual reporting meetings, where you may sum up relevant matters and advise us of your plans for the next year.

Acsour operates on the ‘one-stop shop’ principle – each client has one main manager, who you can contact for any questions. In addition, for the sake of convenient communication, a personal mailbox is created for each client, which is accessed by trusted persons from both sides.

How will document management between companies be organized, and where will the original documents be stored?

For the timely and competent maintenance of the customer company’s accounting and tax records, it is enough to send our specialists scans of the original documents by email. As for the exchange of originals, the methods of transferring documentation, the procedure itself, and the frequency of document exchange are discussed at the stage of concluding the contract and are fixed in the liaison protocol, which is an integral part of such contract, after an agreement is reached on these points. Therefore, everything is carried out according to the terms that are most convenient for and are clearly stipulated by the parties, which allows any delays to be avoided. At the same time, original documents may be stored both on the client’s side and on the side of the accounting services provider.

How does the provider company ensure uninterrupted service should your managers be absent or have left their jobs?

There are changes in personnel (internal reshuffles, or employees who leave their jobs) in any company, and outsourcing is no exception. The only difference is that you will not experience such changes. Outsourcing service providers render an uninterrupted service, which is not affected by annual leave, sick leave and other matters required by law for an in-house accountant. Even if you have a new manager, the provider company will ensure that this internal transfer of business is painless for the client, and the new employee will under no circumstances be inferior professionally to their predecessors.

Where will accounting software be stored and how will it, as well as the confidentiality of client data, be protected?

Accounting software may be stored both on our company’s server and at the client’s company. If the program is stored with us, we guarantee uninterrupted access to the client’s employees, and our IT department is responsible for regular updates of the program and for technical support. Remember that a reliable accounting outsourcing provider should have a well-tuned IT infrastructure, should store data in data centres, should exercise internal control over the use of client companies’ data, etc. If the provider company is undergoing an external IT security audit, you may request copies of documents confirming this fact. For example, our company annually undergoes an audit of the information security management system according to the international standard ISO 27001:2013, which guarantees stability in the functioning of our systems, our reliability as a supplier of outsourcing services, as well as the security and confidentiality of information. 

Does the provider render a service to support the client during the process of inspections by state authorities, if necessary?

The range of services provided by the outsourcing company covers a large number of areas, including support to the client during on-site inspections, preparation of sets of documents for desk audits, coordination with public authorities on current issues and defending the client’s interests based on the results of tax inspections. If necessary, Acsour engages its expert team of lawyers to defend the client’s interests in courts or before other public authorities.

How do you guarantee the quality of your services?

We have assembled a team of specialists, each of whom speaks a foreign language and constantly improves their expertise and qualifications through industry-specific training. For example, our employees include certified ACCA members.

Among other matters, we are responsible for the quality of our services and provide regular customers with such bonuses as free set-up (in case of long-term partnership which lasts more than 1 year) or 10 free hours of our work during tax inspections. The last offer is valid provided that the inspection is completed during the period in which we work with the client. Moreover, Acsour has introduced a quality control report, which enables us to control the slightest flaws in our work and immediately correct them during follow-up meetings. After all, our main value is a happy employee and a happy client; therefore Acsour pulls out all the stops to maintain the highest level of service.

Olga Filina

Deputy Operations Director