Delegate, don’t abdicate!

Many small business owners are worried about outsourcing because they fear losing control of their key business functions. 

And this is a fair concern too.  If you take bookkeeping for example, the business owner or director is still legally responsible for their reporting – so how can they be sure it is correct? And what measures can they take to ensure that they still know exactly what is going on in their business?

Well the key is to maintain control of the work, while not actually having to do the work!

Like most processes, delegating is best broken down into steps.


Step 1 – Research!

It’s homework time!!  Think about your business and your areas of strength and weakness.  Is there a role that would be better placed in someone else’s hands?  What benefits will you get from delegating this role?  More time, certainly (and that might be exactly what you want!!).  However, if you delegate your marketing, for example, you might also expect a marketing professional to deliver better results – giving you additional sales.  This is an obvious cost benefit.  Other roles might be a little harder to define – more accuracy, faster reporting, less fines and overdue accounts, better cash flow?  What will these benefits mean to your business??  Spend some time planning what you want to delegate and what benefits you expect.

Now, having worked out what role you can delegate and what you hope to achieve, you need to find out a little more about the role, the industry, and the requirements for the role.  You should determine what qualifications are needed, decide what the scope of work should include, and what insurances and equipment is required. 

Under the new Tax Agent Services Act 2009, bookkeepers who prepare a BAS must be board registered and subject to a Code of Professional Conduct which imposes a range of obligations, one of which is the compulsion to hold Professional Indemnity Insurance to a Board-specified level. BAS Agents are also subject to a range of administrative sanctions and civil penalties. Clients of BAS Agents benefit from so-called safe harbour provisions which provide relief from penalties in the case of error or late lodgement by the BAS Agent.


 Step 2 – The selection.

Yes, even when outsourcing you still need to select the right person for the job – just like you would for an employee.  Use your research to prepare a Selection Criteria which outlines the qualifications, experience and industry requirements needed. 


Find prospective contractors by asking your business friends for recommendations, contacting professional associations, or by checking directories in your local area.  A great way to see if they will be a good fit for your business is to view their website.  You want to see a well maintained, informative site that gives you a good idea of who they are and what they do.  Increasingly, many people also like to check social media sites, such as LinkedIn or Facebook.  A strong online presence and active network can indicate someone who is well placed in the business community and has a good understanding of current technology and business trends.

Once you have shortlisted your candidates, conduct interviews and ask LOTS of questions (they will probably ask you lots of questions too – so be prepared!!)  Find out what benefits they feel their services will give your company, (how does this compare to your expected benefits) ask what systems they will employ to keep you updated on the work.  Ask about the ownership of any work or documents prepared on your behalf.  Find out what happens in the event of termination.  Will a full handover be given?

You should also find out their rates – they may charge by the hour or on a “results achieved” (value-based) method.  Either is fine, but make sure you understand what is included in those rates and how they are comprised.  If they seem a little high - be prepared to ask why!  Many clients don’t fully realise the qualification and compliance costs involved in some industries – it’s worth understanding these issues and to remember that a low rate can be just as alarming as one that is too high!!  Another point to check is responsibility for superannuation.  In some cases you may be required to pay the contractor’s superannuation.  The ATO (Australian Tax Office) have a decision tool to help you determine your obligations. 


Step 3 – The engagement.

Once you have selected your preferred supplier, make sure you get an engagement letter which outlines the rates, the scope of the engagement (and that this fits your required scope of work), the responsibilities and policies of both parties as well as any grievance procedures. 

Clarify any other questions you may have and setup the induction.


Step 4 – Induction / Handover.

This is a pivotal step in the process and time spent here can save you lots of time (and money) down the track.  Make sure you put aside enough time to fully explain your business, the work required and your current systems and procedures.   If you are away a lot you may also need to setup a system of communication with your new contractor to make sure that they can reach you for any questions and also for work approvals and sign-offs.

It is likely that your new contractor will also want to introduce some of their own procedures at this time, so be prepared to spend some time reviewing this information also.


Step 5 – Monitoring and Feedback.

Once your new contractor has settled down to work, this is not the time to walk away!! 

reportsMake sure you get lots of feedback, reports and information from your contractor.  Also make time to actually review this information. If you don’t understand something; or if it looks wrong, ask why. This information helps you maintain control of the process.  Don’t waste your opportunity!

Try to make time to regularly get together with your contractor. Try asking them for suggestions or feedback on your business -remember they are in contact with a lot of other business owners also – so may have some valuable advice.

You should also monitor the results being achieved to ensure that you are getting a cost-effective solution that is meeting (or hopefully exceeding) your initial expectations.


Step 6 – Provide Recommendations.

If you have found a contractor who ticks all the boxes, and is doing a great job, why not offer them a testimonial or provide recommendations to other businesses?  Remember, this person is now part of your business network.  Working together to benefit each other is a great way to strengthen your relationship and ensure future stability in your business.


Stephanie Lee is a Senior Bookkeeper and co-founder of Imprest Business Services.  Imprest are specialists in providing tailored administrative solutions for small businesses