Note: This blog post was first published on 28 Novemeber 2016 and was last updated on 22 November 2017.
So your accountancy practice has decided to outsource tax. Maybe to manage your team’s workload. Maybe due to staffing issues. For whatever reason, you are now tasked with partnering with a reliable and professional outsourcing company to help you beat the rush.
But choosing the wrong company can pose a risk to your company and its credibility. The key to hiring the right partner is to ask questions. Lots of questions. And not just about pricing.
Here’s a list of 7 questions we recommend you ask a potential tax outsourcing partner
1. Am I impressed with their IT infrastructure and technology capabilities?
Managing your outsourced tax return tasks needs both IT infrastructure and secure technological resources, over and above qualified accountants. Tax outsourcing companies invest heavily in IT infrastructure and modernised telecommunication systems like International Private Leased Circuit (IPLC) lines for telephone calls at local rates, and high-speed broadband to access your desktops remotely.
For instance, QXAS uses Dell, IBM and HP servers and computers, and has a 54,000 square foot facility at its disposal. Our Telco main switch is in the UK, and all accountants use dual screen for greater efficiency and accuracy. Watch this 3-minute film to find out about our insfrastructure capabilities.
2. Are you happy with the outsourcing company’s data security and quality processes?
Financial information is sensitive by nature. No accountant should choose to work with an outsourcing company that doesn’t have stringent security measures in place. Data breaches have happened via outsourcing providers in the past. So when you outsource, their risk becomes your risk.
The global standard for Security and Quality management processes, is without question, The BSI International Settings Organisation (ISO). ISO 27001 for security and 9001 for quality processes are used by major IT-enabled outsourcing companies across the world as a test of the systems they have in place. If you are not familiar with it, we can describe it in one word: comprehensive. This video sums up how QXAS secures and accesses client data.
3. What accreditations, professional certifications and experience do they have?
Not all tax outsourcing companies are led by UK-qualified CAs and ACCAs. We all know that the UK has quirky filing requirements and taxes can get complicated as sources of income start to multiply. Make sure your chosen partner hires qualified and experienced accountants. Preferably ACCAs and Indian CAs in management roles and people with previous practice experience in the UK. Also check their website and find out if they are affiliated to ACCA, ICAEW or other such industry trade bodies.
4. How do they hire and treat their tax accountants?
Any time an outsourcing company pitches their services to you, determine how they treat their employees. This is a morally important question. Even before you talk to them, look them up online and on social media channels to get a sense of what the company is like. If they keep their employees involved and provide a fair work environment, they will definitely shout out about it on social media.
With regards to hiring, find out their methodology? Do they let you choose tax accountants, or do they choose for you? You want to know the tax experts that will be working with you like an extended team.
5. What type of training do they do internally?
Ideally you want accountants that can help you meet your practice performance goals. Find out what type of accountancy and tax training do they do internally? Avoid outsourcing companies that can’t provide CPD to their accountants.
At QXAS, for example, we are a Gold approved ACCA employer and all newly hired accountants undergo a 3-phase training program in the QXAS Training Academy before they hit the floor. All staff have access to CCH e-CPD online training, tax updates on the Tax TV, Bloomsbury online subscriptions and, of course, regular classroom updates and instruction.
6. Do I like what I hear from the outsourcing company’s clients?
Don’t be content with the outsourcing company claims about themselves (such as “We only hire highly experienced and qualified tax accountants”, “We are the leading tax outsourcing company”, “We turnaround jobs faster than others...”).
Obviously, every outsourcing company says such things about themselves. What you want is to hear what other fellow accountants say about the company. So before you sign the dotted line ask any prospective partner to provide some references you could talk to.
7. How do they charge fees?
Finally we get to price. If you don’t’ see the information on the outsourcing company’s website, ask whether they work by hours or provide dedicated full-time employees (FTEs). Find out if they offer bulk discounts? Not only should you know in advance how much the service will cost you, but it can help you determine whether they have special discounts for longer commitments.
There you have it. Seven questions to help you vet the right outsourcing company. Once you know what ideal qualities to look for, you’ll feel much more confidant in your choice to move forward. Remember, there’s always time to change your mind and find other options – but selecting the right partner at the start will save you a ton of time, money and headaches down the road.
Have you used an outsourcing company to help you during tax season? How did you make sure you found the right one?
FREE DOWNLOAD: Self-assessment tax return checklist to share with your clients