But is it really safe to do so?
Well, it can be a tough decision to make especially when it’s about the security of your financial data. Embezzlement and data breaches aren’t any new to the Accounting sector. The Enron Scandal in 2001 is one of the prime examples of fraud in the Accounting industry.
It’s quite understandable and valid when a business owner asks if Accounting outsourcing is really safe?
However, outsourcing of accounting work is becoming quite popular across all developed countries including the UK which suggests that somewhere between the line, it can be a safe bet to place. Even a report by Deloitte suggested that 57% businesses prefer outsourcing as it allows them to focus on core business operations.
But how can you make sure that your financial data is in safe hands. Well, in that case, there are a few strategies that can help you out.
Research the Outsourcing firm’s security protocols:
Yes, it is a very crucial step that every business owner needs to follow. You can’t simply trust a few Google reviews and hand over your Accounting services to someone who might be a layman in Accounting but good at marketing. In today’s tech-driven world it has become quite easy to fake one’s online presence as an industry expert.
Thoroughly go through the company’s profile and oversee what security measures they have in place for recordkeeping and data management. If possible get in touch with the existing customers of the firm you are considering to outsource. Also, go through their employee’s LinkedIn profiles and other professional networks. You can get to know a lot about the company via its employee’s profile.
Though with the advancements made in technology, it is easier to present yourself as a professional online, it has also given us the power to use it for our benefit. The same goes when considering outsourcing accounting services. Look out for how the firm leverages the power of technology to keep your financial data intact. Ask if they have proper accounting software in place that makes sure that your data cannot be modified by anyone and it is hidden securely behind multiple layers of data encryption.
Moreover, if you are outsourcing to third-world countries like India, see if proper communication channels are in place and there are no communication barriers and breaches in between. Confirm with your service provider whether they are using VPN to make sure your data is encrypted. You can also use database monitoring systems and firewalls to further secure your financial records.
Training and awareness policies:
Training and development is an essential part of every business process including process. Once you have gone through security checks and other processes, make sure that proper training and awareness policies are in place before you onboard your service provider. At the end of the day what matters is that both yours and your service provider are on the same page. Moreover, also check if the outsourcing firm has proper employee training on how to handle digital threats.
Security begins at home. Assign a team of highly-skilled employees from your top management who have enough knowledge and experience to install security checks and conduct internal audits on the data that you receive from the outsourcing firm. No, it doesn’t mean that there is no need for outsourcing at all. Instead of going through your financial records everyday, define a specific time frame when you’ll be using this team of skilled professionals. Auditing can also help you improve the effectiveness of ongoing processes.
Afterall the discussion, I can say that it is quite safe to outsource accounting. However, you still need to do your part by making sure Information security policies are well set up before you finally decide to hand over your company finances to a third-party.