Outsourcing your accounts, the pitfalls and how to avoid them. In this post we examine the risks of outsourcing and potential solutions.

The pitfalls of outsourcing your accounts and what are the solutions?

If you are considering outsourcing your accounts, forewarned is forearmed. Above all, avoid rushing into it without careful examination of the pitfalls and how these will impact you and your business.

When looking at your outsource options you are always comparing what you currently have “in-house” versus what your ideal scenario where things are just done and done completely and accurately. Will this save your money or cost you more money in the long run? There are many questions to ask and being fully informed will be your best way forward.

For the purpose of answering the many questions that business owners raise,  we look at the various risks around outsourcing your accounts and what is the solution to avoid these pitfalls.

1. Reduced Control

  1.  it can be difficult to maintain the level of control you desire. You may like to be in control of the processes from start to finish. With this in mind, when you outsource you effectively pass an element of this control and responsibility to a third party.

Solution –  Before selecting an outsource partner, talk to other clients that are already using their service.

2. Communication issues

  1. How accessible are the outsource team allocated to you. Do you have a dedicated contact? In what way will communication be handled, phone, email or ticketing system.

Solution – Agree the format of communication before hand and preferably have a dedicated contact that you can call if you have a particular question that needs to be answered urgently.

3. You’re not the only customer

  1. Will your outsource provide get distracted by other things going on around them. Are there other customers who are more important than you?

Solution – Pick a provider who specialises in your area. They are less likely to get distracted by other things and should have developed good processes to deal with this issue.

4. Quality issues

  1. Not as advertised – below expectation and behind time. Very important that you agree deliverables and timeframes upfront.

Solution – Very important that you agree deliverables and timeframes prior to starting any engagement.

5. Don't get left High & Dry

  1. Your newly selected outsource provider could wrap up leaving you high and dry. A big concern is that after making the decision to outsource, a few months later you find out that your outsource provider are leaving the market.

Solution – Do a background check on your potential outsource provider. Look for answers to see how long have they been in the outsourcing space?

6. Moral Dilemma

  1. Outsourcing may not contribute to the growth of your community. It can confuse staff who don’t understand why you are outsourcing certain tasks.

Solution – Engagement with your team on the reasons for outsourcing and focus on the benefits for them, such as, freeing up time and resources to focus on core business activities etc.

7. Security Risks

  1. In today’s world, data protection is crucial because cyber threats are all around us. We see in the newspaper’s articles about cyber threats and data breaches. You should ensure that your outsource provider has sufficient protections in place to protect you from any breaches.

Solution – Check the data protection measures, privacy, security protocols and intellectual property systems and processes that the outsource provider has in place to deal with these.

8. Hidden Costs

  1. Some outsourcing agencies demand that businesses sign long contractual agreements to tie them in. This can include hidden charges and other unexpected fees.

Solution – Get clarity from the offset on this. Reading the agreement carefully is paramount before signing it, in order to give you full confidence in your new provider moving forward.

9. Choosing a Low-Pricing solution

  1. Point often overlooked, is choosing outsourcing solely for cost savings alone, can be a very risky strategy.

Solution – You already know this one: “If it seems too good to be true then in probably is”. Understanding that your outsource provider needs to make a profit to stay in business. On balance, the cost savings should be delivered through better efficiencies through technology and expertise in the specific area you are considering outsourcing.

10. Lack of experience in Outsourcing

  1. When comparing an experienced outsourcing company to a new to outsourcing company. They might struggle to deal with more of the complex items in your business and feel overwhelmed.

Solution – Look for an experienced provider who can identify and bottlenecks and possible risks and mitigate against them. At the very least, you should feel very comfortable with your new partner and they should be matching your expectations and understand your requirements.

11. Over promising

  1. Over promise and under deliver. Will the outsource provider deliver what they say will?

Solution – Having a clear engagement and SLA should set out clearly what will be completed and the timeframes of when this will take place


Remember – whether you decide to outsource or not. Think about the outsourcing of tasks that have worked out well. Many companies outsource without realising that they are doing it already. This could be in the form of IT, HR, Security, Marketing, Payroll, telephone answering etc. Forewarned is forearmed. Outsourcing when it works well, it is brilliant, but when it is rushed or done badly can leave you feeling angry and burnt.

In conclusion, given these points there is lots of scope for a successful transition from in-house to your outsource provider. Most importantly, remember that this is a long term relationship that you are entering into that will benefit both parties. 
Good luck with your selection

Brenda Smith ACCA

Operations Director

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Is your accounts, bookkeeping or payroll causing you unnecessary headaches?

Why not look the cost of outsourcing your accounts and do a comparison to your in-house cost?