The risk of outsourcing your bookkeeping overseas

Outsourcing bookkeeping overseas may seem like a cost-effective solution for businesses trying to cut down on expenses.

However, it comes with its own set of risks. One of the biggest concerns is the compromise of sensitive financial information. When a company outsources its bookkeeping overseas, it loses direct control over who has access to its financial data.

This can result in data breaches, identity theft, and other security risks.

Additionally, outsourcing overseas means having little to no control over the quality of work and communication. Any miscommunication or errors in the work can lead to financial losses, legal troubles, or reputational damage.

This week, we take a closer look at the possible risks that can arise when you’re thinking about sending your bookkeeping offshore. Remember, there’s a distinct difference between outsourcing your bookkeeping in Melbourne and outsourcing your bookkeeping overseas!

Benefits of outsourcing your bookkeeping

While outsourcing bookkeeping services overseas may seem appealing, it is important to weigh the potential risks against the benefits before making a decision.

Do what you do best – that’s running your business – and outsource the various business elements that require professional and accurate management. A variety of outsourced services all contribute to the successful growth of business. That may include content marketing, accounting, bookkeeping, or graphic design.

Outsourcing your bookkeeping is great: you’ve recognised that you need professional support in a sometimes challenging and confusing field like finance, and you understand the need to get it right.

When business owners come to us to outsource their bookkeeping, they get immediate peace-of-mind that they’ve chosen a reputable Australian-based company that remains compliant and is up-to-date on all tax and government laws, regulations, and changes.

However, the story can play out differently when you’re thinking offshore…

Offshore bookkeeping

Business bookkeeping needn’t be stressful. But when you start thinking about sending your bookkeeping offshore – that is, offshore outsourcing – there are a lot of things you must consider.

Australian tax laws

Bookkeeping, despite what some people think, is more than just a tedious, repetitive task. It is a bookkeeper’s job to ensure that payroll, BAS statements, superannuation, GST, tax, and more are all lodged correctly and up to Australian standard. Anything less could result in harsh penalties.

This is probably the most important and significant thing to consider.

BAS requirements

BAS – or Business Activity Statement – is a business requirement from the Australian Tax Office that declares how much GST your business owes to the ATO. Overseas, you might know this term as similar to the terms ‘tax’ ‘sales tax’, or ‘VAT’.

Tax rates around the world are difficult to compare as they are rather subjective, so if your overseas bookkeeper is unfamiliar with the BAS process and requirements, you might want to reassess your desire to outsource anywhere other than Australia.

You can learn more about BAS in this blog post.

Secure data storage and privacy

You can have your own policies when it comes to business security and data, including the cloud-based bookkeeping system you use, but you cannot be certain of your overseas bookkeeper’s own degree of data storage and security.

You cannot guarantee that they are using technology or software that matches your security standards, which could put your business’ data at risk.

Working with your accountant

Most businesses have a bookkeeper and an accountant, and these two crucial people liaise together periodically across different stages of the entire financial cycle. Have you considered how your overseas bookkeeper could work with your local accountant? Will this really work?

Supervision is limited

Along with overseas outsourcing comes the expected consequence that you will lose a major degree of supervision and command. You’ll also lose the urgency you might’ve come to expect from a local bookkeeper.

Who exactly is working on your accounts?

While you can do everything possible to try to select a reputable offshore bookkeeping company and individual bookkeeper, you’re never guaranteed to know at all times who is working on your accounts.

This doubt only leads to hesitations and stress that perhaps your bookkeeping is not being done by the person you thought was doing it… and that might mean someone who does not, in fact, have the right or adequate experience and bookkeeping qualifications.

Outsource your business bookkeeping to a local bookkeeper in Melbourne

Offshore accounting could cost you more than you think

On paper, the maths can look great – a cheaper service, shipped offshore and out of your hair sounds pretty good.

But along with overseas outsourcing comes a higher risk of human error, shortage of Australian law knowledge, and the lack of confidence that a qualified bookkeeper is taking care of your business’ books.

And when errors happen, they need to be fixed. Feeling discouraged, you choose the more sensible option of a local bookkeeper in Melbourne to fix the errors, paying them what you likely would have paid them in the first place to get it done right the first time around.

Ensure you get it right from the get-go with bookkeeping services in Melbourne. Whether you need messy accounts tidied up, support with payroll, or new cloud-based software implemented, such as Xero, MYOB, or QuickBooks, Maximum Business Solutions can help!

We provide bookkeeping in Beaumaris for clients all around Melbourne and Victoria. Contact us today or call now!

You can also visit us for bookkeeping service in Melbourne: pop into our office at 13 North Concourse, Beaumaris 3193.