If you outsource any aspect of your business to a third party do you have an Engagement Letter from each service provider and what should you do if something goes wrong?
We have recently engaged a few new clients who have experienced issues with their previous accountancy providers. Whilst this is good news for our business, as we gain new clients, it’s also bad news for the profession. The clients’, having been disappointed with the previous service they have received, almost become distrustful of the profession as a whole.
Having gained the clients we are now having to work extra hard to catch up with the unfiled VAT returns, unpaid PAYE and incomplete accounts, as well as having to work hard at proving that not all service providers are the same.
With this in mind, we would like to offer some tips for businesses who are thinking of outsourcing any aspects of their business.
ALWAYS ask for references
Any service provider worth their fees will have no problem in providing you with the name and contact details of an existing client and don’t just ask for one, ask for three.
ALWAYS ask for an Engagement Letter
This “letter” should document both your and the service providers obligations, payment terms, complaints procedure and most importantly, information confidentiality.
ALWAYS ask for details of their insurers (it should really be included in the Engagement Letter or T&Cs)
A professional service provider should be insured for Professional Indemnity.
If you make sure you get the 3 items above you can be pretty sure that the company you are outsourcing and trusting your information with, will act in the most appropriate and professional manner.
BUT what if you have already outsourced a part of your business and things are starting to slide?
MEET – request a meeting with the service provider and set an agenda with your concerns and if possible give examples of where you think there is an issue. If there is an Engagement Letter in place, check that they accurately reflect the service you want and if not, ask yourself have things changed and therefore they need readdressing?
RE-EVALUATE – the relationship. Is the company you have outsourced that task to still aligned with you and your business needs?
CLAIM – this may sound extreme but if the service provider has failed in their obligations and that failure has cost you money, then their insurers should cover it. This is of course assuming that they are insured and have told you their insurer’s details.
Outsourcing is a good way to ensure that everything that is needed within a business, is covered; as let’s be honest, we can’t ALL do ALL of the things needed ALL of the time.