5 Questions to Ask before Outsourcing Bookkeeping or Accounting

Are you planning to outsource bookkeeping or accounting services? If yes, ask these five security related questions to the service provider before outsourcing.

You want your bookkeeping and accounting to be perfect, but hiring an in-house accountant or a part-time bookkeeper is not possible for your business right now. Perhaps you do not have the budget for a full-time CPA or you don’t have the time to manage an in-house bookkeeper. Whatever be your problem, outsourcing is the ideal solution. However, you must exercise caution while outsourcing, as you will be sending a huge deal of sensitive and important financial information to a third party.

If you are on the verge of facing outsourcing with a lot of trepidation, we can help you get sorted. To protect your enterprise and to calm your fears, it is critical to know what questions to ask to make sure that your data is safe and secure. Here are a few to help you get started.

  1. What physical security measures do you use at your organization?

    Before checking the security of your electronic data, check if the servers and other places where financial data is stored, is secured appropriately. Ask the vendor about the type of access their employees have to databases and whether they have secured their server room. Also check if there are proper security measures which help to screen employees who enter the database area. If the vendor has a virtual company with remote employees, check if there are measures to oversee the location and dissemination of data. Check if the servers allow the transfer of information to local computers or printers. You will certainly want to make sure that your financial data does not leave the premises of the outsourcing service provider.

  2. What happens to the files when you are finished with them?

    Once the outsourcing service provider finishes work on your bookkeeping or accounting, find out what they do with older files. Do they store files for a limited period of time, always keep them at hand or destroy the files after giving you copies? On the completion of the work, will the files be downloaded to a CD or made available through an FTP? Ask for a written statement on what will happen to your files if you decide to end your relationship with the bookkeeping service provider. Asking this question can help you protect your financial data.

  3. What are the encryption methods that you employ on your login portals and site?

    Encryption can prevent information from being retrieved in plain text by a hacker looking for packets. Ask if the vendor is using an SSL certification for 128 bit or a 256-bit encryption for sending files to the website. Encryption can prevent hackers from deciphering information sent to the accounting firm. If the outsourcing service provider offers client access to accounting data through cloud or file room storage, make sure to find out what security features are in place to protect third parties from accessing the information. While outsourcing, you may also want to limit access to only key members of your company. Remember that even login credentials require adequate protection.

  4. What are your policies in case of a data breach?

    Only go with a service provider who has an emergency action plane in place before an emergency occurs. Find out what exactly will happen if the physical files are stolen or the servers are compromised. What policies does the service provider have in place to mitigate the damage, recover data and compensate the affected company? Also check out their alert process. When you will be told about the security breach and what emergency measures will be taken? This can help you plan out a strategy in case of a security breach in advance.

  5. Is network security in place?

    Make sure that the accounting service provider uses a secured network for their business. If not, there is a chance of a hacker connecting to the network and attempting to gain access to network servers, computers and other devices in order to obtain your financial data. Find out more about the vendor’s hosting provider and ensure that they have selected a credible and knowledgeable team to manage data protection.

Make sure that the service provider you choose will act as your trusted partner and will be willing to answer your concerns at every step. If you are thinking about using an outsourced bookkeeping or accounting service, we can assist you at Outsource2india. Find out more about our accounting services today.

Did you like reading this post? Would you like to see more posts on accounting or bookkeeping? Let us know your thoughts by leaving your comments in the box below.

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2 thoughts on “5 Questions to Ask before Outsourcing Bookkeeping or Accounting

  1. Hi Author!

    Being a businessman I have great experience of working with virtual assistants & I know that many people avoid doing dealings with them as bcoz of their past experiences. So I would advise them to get services from well-known virtual assistant service provider companies as they provide guaranteed security of your data.


  2. I like your suggestion to ask about their policies in case of a data breach to make sure we choose someone who has emergency plan in place. At my workplace there’s been talk of outsourcing our bookkeeping because our finances have been getting more and more complicated as the company’s been growing. I’m glad I read your article because I can see how asking about emergency plans will help us find a smart and established company.

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