More on Outsourcing

Gary Boomer, Boomer Consulting, Manhattan, Kansas, writing in Accounting Today, lists some benefits of and advice on outsourcing. • Staff is grateful for the opportunity to direct their efforts to higher value services. • Turnaround is quicker. • Quality is at least as good, cost is less, and profitability is greater.

Tax return preparers at outsourcing companies probably are better trained than those in the firms and the security systems are better.

As noted in the previous article, CPAs are now required to notify clients that third parties are used in the preparation of their returns. Clients should be told that the outsourcing will provide them with better and faster service while controlling the costs. They should generally respond positively.

It is crucial to perform due diligence on the outsourcing companies to assure competent service and a high level of security. But in fact many of the companies are reputable, have a variety of certifications, are selective in their hiring practices, and are concerned about security.

Before beginning the service, the firms should enter a non-disclosure agreement with the outsource company. To assure efficiency of the firm, commit a minimum of 200 tax returns to the outsourcing process. Send privacy letters and engagement letters to your clients. Develop a set of internal procedures for outsourcing and train your staff.

For more, see Accounting Today, Dec. 20, 2004-Jan. 9, 2005, p. 24, or http://www.webcpa.com/article.cfm?articleid=9743&;pg=acctoday