Choosing a Service Provider
Let’s talk about what really interests you.
What’s the easiest way to compare prices for basic service packages?
Will a service provider be able to handle your project?
Why are the qualifications of the accounting provider of secondary importance?
How can you ensure that a service provider will not make mistakes?
What remains if you set aside marketing?
Why is it important to know how service providers maintain prices?
Prices for outsourcing services are not always in line with the cost of maintaining a full-time accounting staff.
The service provider incurs exactly the same costs for its accountants as any other company, which includes the costs of maintaining their positions, training specialists, and various software. In addition, service providers incur costs for insurance of professional risks and other specific expenses related to ensuring proper quality of service, stability and continuity of service delivery.
To provide advantages over full-time accounting staff while maintaining competitive pricing, service providers are helped by optimization and automation of processes, reasonable workloads for specialists, the creation of payment centers in regions with lower labor costs, a system of training and mentoring and, in general, all the accumulated expertise that makes solving complex issues for corporate accountants easier and faster.
Substandard service can be very expensive, while high-quality service cannot be cheap. Therefore, rather than assessing the cost of outsourcing, it is better to focus on how complete the standard package of services is. It is also important to consider the customer focus of the service provider, including readiness to consider the client’s needs in a comprehensive manner that not only addresses accounting questions but also pays attention to other important issues, for example, changes in legislation, which while not directly related to accounting or taxation can nevertheless affect a client’s business.
How can one properly compare the prices of providers of basic service packages?
Any accounting service provider will offer you a basic package of services – a set of necessary, standard and repetitive activities from month to month. These packages cost about the same for different providers, but there are nuances. You can overcome this marketing trick by taking initiative and writing down the list of services you need and asking several service providers to give you a price.
What additional services can a provider offer?
As we have discovered, the services that accounting service providers can offer fall into standard services that are ordinary and offered continuously, and supplementary ones that are needed only on occasion and/or that do not directly relate to accounting. The latter include tax consulting, legal support, and audit, among others.
Sometimes organizations’ financial departments are tasked with solving specific challenges that go beyond the responsibility of the accounting service, whether corporate or external. The main task of your full-time accountant or accounting provider is to make competent decisions, such as reflections of already completed business transactions in the registers. However, when you need to ensure the impeccability of an upcoming transaction in terms of taxation, this is not a task for accountants but rather one for a tax consultant.
Accordingly, if you need the tasks accompanying accounting to be completed promptly on demand, in a turnkey manner and by a single provider who is dedicated to your specific issues, you should consider audit and consulting firms that specialize in accounting services. You will receive not only an accountant who has access to constant support, training, and advice from consultants, but your acquisition will be the result of work by an entire team of qualified specialists: accountants, lawyers, auditors and tax experts.
What should a service provider do before commencing work?
Before taking your accounting records into his or her caring hands, a service provider will complete a number of start-up procedures. Ask about what this entails.
Usually this is a methodology that involves studying the client’s business; creating accounting databases for record keeping and wage calculation, as well as entering information about the client and its employees in a database. It also involves creating directories of types of expenses and revenue, setting up data exchange between the database for calculating wages and the database for accounting, and acquiring and installing stronger digital signature certificates to transfer reports to supervisory agencies through digital communications channels. As part of the start-up procedures, it is good if a provider reviews your accounting policy and offers recommendations on how to improve it. If you don’t have an accounting policy, they should develop one and set up a 1C database for it. Another plus would be recommendations on how best to automate accounting and reporting processes. An express audit of the prior period as part of the start-up procedures would benefit both the client and the service provider.
Start-up procedures are not merely a formality or simply a way to set a good tone, but rather serious work that must be done properly. Its price can range from 80% to 150% of the cost of monthly service.
Will the provider be able to service you?
The most effective way of answering this question is to look at the number of accountants already working at the company, along with the rate of staff turnover. That is, we focus on industry ratings – how many specialists are on staff and how that number has changed over the previous year. My observations have shown that it is worth considering providers with at least 15-20 specialists. This indicates a higher probability that they will be able to easily take each other’s place on your project during holiday periods and in the event somebody takes sick leave.
For a new large client, service providers are more likely to hire a new accountant or even several. This is a risk factor to a certain degree, but not a deal breaker since large projects are interesting and important to providers. Additionally, a newbie in the company will not be a newbie when it comes accounting. He or she will go through a whole set of qualifying interviews and tests, and when hired will receive a mentor and the full support of more experienced colleagues, lawyers, and auditors. A competent provider who has been in the market for a long time has virtually automated this process and can manage perfectly well. For example, we have an external network of specialists whom we keep top of mind for new projects.
What I don’t recommend is checking the qualifications of individual specialists who will handle your accounting. They also go on vacation, get sick and resign at times. What is really worth doing is learning how the quality control system works, which ensures that you have stable and error-free accounting (even if your accountant is having a bad day).
Will the provider never make errors?
Even the most experienced specialists occasionally make mistakes. The important question is who catches these errors and how soon they are corrected. If you are using in-house staff accountants, this is done by auditors or tax inspectors. When accounting is outsourced, it is the service provider’s quality control system – the procedure to verify the work performed for the client.
Try to find out whether such a system exists in practice or only on paper. For example, ask the service provider who, how, at what stage and to what extent the work of accountants is checked. Ask them to describe the processes for preparing statements or income tax declarations from beginning to end. The answer should be immediate, delivered confidently, and reasonable.
What is important to know about IT?
An important component of the quality control system is the automation of processes. The higher its level, the less influence the human factor has and the lower the risk of errors. We look at the flexibility of settings, as well as the ability to create customized reports and documents and to freely download and upload data in the required format. We evaluate a service provider’s ability to adapt to the realities and needs of your business.
For example, if you have a chain of stores, ask the provider how it will solve the challenge of collecting data and centralizing data processing, how it will configure access for all interested parties, as well as where and in what format data will be stored.
I’ll cite another example that comes from experience. One of our clients, a pharmaceutical company, outsources its warehouse operations. The service provider keeps a record of the goods in its program, and the corporate 1C program does not see these operations. We need these data for accounting purposes, so we solved the problem by setting up automatic hourly unloading of data from the warehouse program that our client’s contractor uses.
What do industry ratings tell us?
I believe that industry ratings exist more for advertising and promotion of association members than for objective reflection of market volume or some kind of other measurement. But this does not mean that the ratings are useless. They are like a shop window of sorts in that they show who is “on hand” today, who is still present in the market, and who is interested in new clients. We also take part in these ratings, which gives the business community an opportunity to become acquainted with our services and areas of specialization. Alinga sends an important signal to both existing and potential clients: we have been in business for almost twenty years, we are in demand and we make most of our money through outsourced accounting services. The ratings will not tell you the whole truth, but they will let you know who’s who in the market. That’s enough to start with.
We are ready to provide you with the following services:
- Financial & Tax Accounting (RAS, IFRS, US GAAP)
- Carrying out agreed upon procedures.
- HR Administration
More about services on site: ACCOUNTING
We will be glad to start working with your company.
Office : +7 495 988-2191
Office : +7 495 988-2191