Top should ask questions about online business bookkeeping services and business process outsourcing:

Frequently asked questions are a great way to better understand products and services. However, the better questions are the should ask questions, the ones you should be asking but don’t. These SAQs will give you confidence to hire the right online bookkeeping services for your business. Enjoy.

SAQ #1) Do you require a contract for a minimum amount of time?

Some online accounting services require your business to sign a six-month, one-year or month-to-month contract. If you sign a one-year contract and don't like the service, then you've just created another potentially expensive obstacle to terminating the agreement. Longer time-based contracts compensate for the significant amount of upfront time invested in onboarding your business into new processes, therefore the service could incur a loss if the client terminates after a couple of months. The logic makes complete sense to the service provider, however the client has to gain an even higher level of trust before choosing to sign a contract. The best contracts are month-to-month, but choose anything that works for you. 

SAQ #2) What password manager do you use? Do you require your clients to use the same one? What is your preferred password character length? 

This is best SAQ of all time. Watch and listen carefully because the person who fields these questions will be like a deer in headlights as they fumble around coming up with an answer instead of just acknowledging they don't use one for themselves or their clients. This is the single most important business bookkeeping tool and you likely won't find it mentioned anywhere on their website. A competent online bookkeeping service is completely worthless is they don't handle your passwords, the keys to all your financial & business information, with care. Exchanging passwords via email or spreadsheets is a red flag. Ironically, most service providers are always focused on Quickbooks and Xero online accounting instead of focusing on first things first. 

SAQ #3) What software do you pay for and what software do we pay for?

There are many components that make up the entire pack office. If accounting software was the only component used, then it's not very powerful by itself. Multiple software platforms are necessary for a well-oiled back office. An outsourced bookkeeping service may charge $297 but may not include any software. There are 8 core software components necessary to run a modern back office. Most services don't even understand these 8 core components let alone make it clear as to what's included and what's not included. If each of these components was an average cost of $50 per month then you've got $400 worth of software that needs to be clearly defined. 

The three drivers determining whether or not online accounting solutions include software in their pricing:

Driver #1) What's the billing model of the software? For example the outsourced service may pay $25 but a client that signs up directly with the software platform may pay $50. The service provider will likely bundle this software with their service. 

Driver #2) Is there an accounting partner program with a client portal? A client portal gives an accountant global access to all clients and this may work in combination with the billing model. In this case it wouldn't make sense for a client to sign up directly with the software. 

Driver #3) Is the software pricing fixed, variable or a combination of the two? A fixed monthly bookkeeping service fee can include fix software fees; however variable fees would eat up margins based on client usage. It's logical for clients to pay for software that varies upon usage, although it could still be bundled into a package. 

SAQ #4) What is the total cost of outsourcing?

This question goes hand in hand with, what software do you pay for and what software do we pay for? The base monthly fee of the bookkeeping service is the staring point. Add the cost of all the software not included and subtract the cost of any bookkeepers no longer needed. The hard part is measuring the 17 invisible expenses™ eliminated by using when factored in result in a negative cost™ to outsource. For example, if the net cash out of pocket is $1,000 per month and the savings from eliminating invisible expenses™ is $4,000, then the total negative cost™ of outsourcing is $3,000 per month. It's like getting a $3,000 dividend from WARNING: Not all virtual business bookkeeping services will produce this result. Some of them may leave you wondering if you made the right choice for your business. 

SAQ #5) Why don’t you have pricing listed on your website?

While its true no two businesses are the same the respective design of their back offices aren't substantially different enough to warrant "contact us for pricing" on a pricing page. Subscription based fixed fee models are common place for all sorts of services and now the new model for virtual business bookkeeping services. Customers want clear easy to understand pricing without having to ask for it. Unclear or non-existent pricing is a red flag for old model bookkeeping without a well defined process for themselves or their clients. Get started instead with, your 21st century technology based paperless office. 

SAQ #6) Why don't you have an "About Us" page and/or founder profiles on your website? 

Financial information is the next most private thing after sexual relationships. Business owners share finances with CPA's and other professionals their best friends don't even know about. Business owners and entrepreneurs have to trust someone before handing over their financial information, which is impossible if you don't know who your doing business with. Transparency equals trust therefore, if someone fails to identify themselves they're begging you not to trust them. 

The golden rule of online bookkeeping services: 

1) NO about us page means automatic elimination

2) NO founder/owner profile page means automatic elimination

3) About us pages that don't say who "WE" is are NOT about us pages

4) About us pages should include professional certifications and member organizations

SAQ #7) Do you follow all of our existing business processes or do you require us to use your business process outsourcing model?

A company's business processes are typically strung together in piecemeal fashion, sometimes as an afterthought and certainly not as a comprehensive strategic plan. If you hire a virtual bookkeeping service and expect things to remain the same then you're not getting any value and you shouldn't hire them. Outsourcing is about getting a well designed overnight business infrastructure so your business can scale with peace of mind. The right combination of people, technology and processes determines whether your back office will make you and your business a superstar. For example, if you use Quickbooks Online we'd continue to use it while requiring you to get The Ultimate Back Office™ by for ten times the value of your current back office.

SAQ #8) How do we know whether or not you're qualified?

This question goes hand in hand with SAQ #6. Accounting and bookkeeping services should clearly identify themselves and state how they are qualified. Anyone can grab a few pieces of technology, reconcile bank accounts and throw up a website with discounted fees. The owners of virtual bookkeeping services should have at least a decade of experience preferably with a CPA firm including owning and operating their own businesses. They should have a holistic approach to your business and be overqualified. The best way to understand business is to own one and the best business advisors also own multiple businesses. Their website should include certifications, member organizations, case studies and LinkedIn profiles.

SAQ #9) What does our company need other than small business accounting?

Every business needs accounting software, but it's only one piece of the back office puzzle. The following core benefits and core software & services are required to operate a 21st century business. 

Core Benefits:

1) All paperless and all-in-the-cloud

2) Transparency, access and internal controls

3) Risk and fraud reduction 

4) Audit-ready records

Core Software & Services:

1) Accounting software

2) Document storage

3) Electronic document signing and execution

4) Bill payment and management system

5) Virtual mailbox

6) Receipts management system

7) Password management

8) Business emails and websites

These things are like natural laws working in conjunction with one another. As Tim Ferris puts it, "Never delegate what you can automate and never automate what you can eliminate." Your business needs these things whether you embrace them or not. When you choose to embrace them your life will be much easier. WARNING: Most small business accounting solutions do NOT offer a complete package. The Ultimate Back Office™ by is the only complete solution for an overnight business infrastructure. 

SAQ #10) Who actually does the accounting and bookkeeping and where is the work performed?

The best way to answer this question is indirectly. Who does the work and where it's performed is less relevant than what type of internal controls and business processes are used by online accounting services. Many of these services like to highlight US based employees, however location is NOT correlated with skill or processes that reduce risk for the client and the service provider. For example, let's say a service with US employees violates SAQ #2 for failure to use a password management system for themselves and their client while a service using foreign workers employs best practices. Does the online accountant practice what they preach? The Navy SEALS say, "You're only as fast as your slowest man." Said another way, it's impossible to deliver a service for clients better than the one they use for themselves. At we live and breath the paperless office and eliminate the slowest man wherever we can. 

Good luck choosing the right outsourcing partner for your business. Make sure you review the Top Ten FAQs for Online Bookkeeping Services.