Having three children, my wife and I know a few things about delegating work. But we also know that if we want the work to get done, it’s our responsibility to provide proper oversight.
Like most parents, we find ourselves constantly checking to make sure the tasks we’ve assigned to our brood were actually completed while longing for the days when we will no longer need to ask them to clean their rooms, feed the fish or take their cups to the sink. As parents, it’s our job to teach our children the proper way to do things and to offer reminders when something is forgotten – and we trust that one day our lessons will become common sense. Until then however, we know that the best way to ensure that our quality standards are met (and to ensure that clothes and toys aren’t just being shoved into the back of their closets) is to be actively invested in our children’s development and to communicate our desires effectively.
This lesson holds true in business as well, especially if your company outsources any portion of its operational responsibilities. If you aren’t adequately overseeing the company and managing your business’s critical tasks, you are not only doing yourself a disservice, you could end up hurting your clients, your employees and your company as a whole.
So whether you are entering into a service agreement with a new organization or are interested in improving your relationship with a current provider, consider implementing a new approach to this relationship and actively engage with the service organizations you utilize. The following tips will put you on the right track.
All In This Together
Service organizations provide critical operations, such as payroll processing, benefit plan administration, medical claims processing and online storage services, to businesses and organizations at cost-effective rates. By their very nature, these organizations have access to key pieces of information pertaining to your company, your employees and your clients. Therefore, even though service organizations can be great resources that should be used and trusted; remember to focus on the fact that you ultimately have sole ownership over the information in their possession, which means it’s your responsibility to provide the organization with the oversight needed to make sure that they are performing up to your standards.
How To Manage The Relationship With Your Service Organization
1. Sometimes a simple phone call is all that is needed to jumpstart dialogue. Consider gathering insight about the organization by directly speaking with your service representative as well as their current clients. It’s also important to monitor your relationship and get to know what issues/concerns you may have that should be addressed.
2. Do you know if the organization you are working with has a Service Organizations Control (SOC) report? If so, does it pertain to the services you are currently requesting or using? Make sure you get a copy and take time to read through it completely. While studying the report:
- Note any exceptions and their effect on your business
- Consider how the expected user entity controls are in place at your company
If the organization doesn’t have a SOC report, ask the following questions instead:
- What controls does the service organization have in place over your (or your employee’s) information?
- Can the organization demonstrate the controls they have in place? If so, are they operating effectively?
3. Regularly audit the information your service organization provides and compare it to your expectations. You might also consider conducting a sample of individuals or transactions to recalculate.
Your relationship with your service organization can provide you with many great, cost-effective benefits and can oftentimes increase your company’s productivity and profitability, but never take the quality of the services provided for granted. The last thing you need is to be taken by surprise by clutter in the closet.
Email Rea & Associates to learn more.
By Mark Beebe, CPA (Zanesville office)