I run a one man show corporation in Canada and fell behind on bookkeeping and taxes for 2 years. I found an affordable accountant who says he saves money by sending all my bank statements overseas to do all the bookkeeping side of things. Seem legitimate?

Solo Business Owner in Canada: Seeking Advice on Outsourced Bookkeeping

As the sole operator of my corporation in Canada, I’ve unfortunately fallen behind on Bookkeeping and taxes over the past two years. Recently, I discovered an accountant offering an affordable service. This accountant claims to cut costs by outsourcing my bank statement processing overseas for all Bookkeeping tasks. Does this approach sound legitimate?
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When running a small, personal corporation, especially as a sole proprietor, handling Bookkeeping and taxes can become overwhelming, and it’s common for business owners to seek external help. You’ve mentioned engaging an accountant who plans to outsource Bookkeeping overseas to manage costs. Here’s a detailed look at this situation, including its legitimacy and considerations:

Legitimacy of Outsourcing Bookkeeping

Common Practice: Outsourcing Bookkeeping, including sending work overseas, is a common practice in the business world. Many accountants and firms leverage offshore teams to reduce costs and increase efficiency. This practice is not inherently fraudulent or illegitimate.
Cost Efficiency: Sending bookkeeping tasks overseas can be cost-effective due to lower labor costs in other countries. This can be advantageous for you as a business owner looking to save money.
Experience and Expertise: Outsourcing firms often have experienced professionals adept in handling bookkeeping tasks efficiently. Your accountant might be using a team with specialized skills in handling financial records for Canadian businesses.

Considerations

However, before proceeding, ensure you are comfortable and protected by considering the following:

Privacy and Security:
Data Security: Ensure that the accountant has stringent measures in place to protect your financial data. Overseas outsourcing can add layers of complexity regarding data protection.
Confidentiality Agreement: Make sure there’s a confidentiality agreement in place to safeguard your private financial information.
Legal Compliance:
Data Transfer Regulations: Verify that your accountant complies with Canadian regulations concerning data transfer and privacy. The Personal Information Protection and Electronic Documents Act (PIPEDA) outlines rules about how businesses should handle personal data.
Record-Keeping Standards: Ensure that the overseas team is well-versed with Canadian bookkeeping standards and tax regulations to maintain compliance.
Quality Control:
Accuracy: The outsourced team should maintain high standards of accuracy, as errors in bookkeeping can lead to complications during tax filings.
Communication: Check that there are clear communication channels with both your accountant and the overseas team, should you have questions or need clarifications.
Track Record:
Reputation and References: Research the accountant’s reputation and ask for references. Verify their track record, particularly with clients similar to your business setup.
Portfolio: If possible, look into previous work done by the overseas team to assess their competence.

Steps to Take

One response

APAdmin

25 February 2025 at 7:53 PM
When running a small, personal corporation, especially as a sole proprietor, handling Bookkeeping and taxes can become overwhelming, and it’s common for business owners to seek external help. You’ve mentioned engaging an accountant who plans to outsource Bookkeeping overseas to manage costs. Here’s a detailed look at this situation, including its legitimacy and considerations:

Legitimacy of Outsourcing Bookkeeping
1. Common Practice: Outsourcing Bookkeeping, including sending work overseas, is a common practice in the business world. Many accountants and firms leverage offshore teams to reduce costs and increase efficiency. This practice is not inherently fraudulent or illegitimate.
2. Cost Efficiency: Sending bookkeeping tasks overseas can be cost-effective due to lower labor costs in other countries. This can be advantageous for you as a business owner looking to save money.
3. Experience and Expertise: Outsourcing firms often have experienced professionals adept in handling bookkeeping tasks efficiently. Your accountant might be using a team with specialized skills in handling financial records for Canadian businesses.
Considerations

However, before proceeding, ensure you are comfortable and protected by considering the following:
1. Privacy and Security:
2. Data Security: Ensure that the accountant has stringent measures in place to protect your financial data. Overseas outsourcing can add layers of complexity regarding data protection.
3. Confidentiality Agreement: Make sure there’s a confidentiality agreement in place to safeguard your private financial information.
4. Legal Compliance:
5. Data Transfer Regulations: Verify that your accountant complies with Canadian regulations concerning data transfer and privacy. The Personal Information Protection and Electronic Documents Act (PIPEDA) outlines rules about how businesses should handle personal data.
6. Record-Keeping Standards: Ensure that the overseas team is well-versed with Canadian bookkeeping standards and tax regulations to maintain compliance.
7. Quality Control:
8. Accuracy: The outsourced team should maintain high standards of accuracy, as errors in bookkeeping can lead to complications during tax filings.
9. Communication: Check that there are clear communication channels with both your accountant and the overseas team, should you have questions or need clarifications.
10. Track Record:
11. Reputation and References: Research the accountant’s reputation and ask for references. Verify their track record, particularly with clients similar to your business setup.
12. Portfolio: If possible, look into previous work done by the overseas team to assess their competence.
Steps to Take
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