Outsourcing providers are very good at sales calls. Polished presentations, impressive client logos, confident answers to every question. Then you sign the contract and discover that the "dedicated senior accountant" is actually a junior team member, the "48-hour turnaround" applies only during off-peak months, and the "SOC 2 certified" claim refers to a certification that is in progress, not completed.
An RFP (request for proposal) eliminates this information gap. When you put your requirements in writing and ask providers to respond in writing, you get documented commitments rather than verbal promises. You can compare responses side by side. And you have a paper trail if the delivered service does not match what was proposed.
We welcome RFPs at Madras Accountancy. We think they make the selection process better for everyone. Providers who are confident in their capabilities have nothing to fear from specific written questions. Providers who rely on sales charm to paper over operational gaps have everything to fear. Our guide to choosing the right outsourcing partner covers the broader evaluation framework. This article gives you the specific RFP template.
In our experience, CPA firms that use a structured RFP process are significantly more satisfied with their outsourcing provider 12 months after signing. The reason is not that the RFP selects a better provider (though it often does). It is that the process of writing the RFP forces the firm to clarify what they actually need, which means the provider has a clear brief to deliver against. Misaligned expectations are the number one cause of outsourcing dissatisfaction, and the RFP process reduces that misalignment before the engagement begins.
The most common reason firms skip the RFP is that it feels like too much work. Writing a 12-section RFP, distributing it to providers, reading the responses, scoring them, and conducting follow-up conversations takes 15 to 25 hours of partner time. That is a meaningful investment when you are already busy with client work.
But consider the alternative. Without an RFP, the selection process is usually a series of sales calls over 2 to 3 weeks, ending with a decision based on which provider was most persuasive or most likable. If the selected provider underperforms, the cost of switching is significant: 2 to 3 months of transition time, disrupted client work, and the need to restart the evaluation process.
The 15 to 25 hours invested in an RFP process prevents a bad selection that could cost 200 to 300 hours of partner and staff time to unwind. The return on that investment is compelling.
The second reason firms skip the RFP is that they do not know what questions to ask. This article solves that problem.
Section 1: Firm overview. Ask the provider for their company history, ownership structure, office locations, total employee count (and specifically how many work on US CPA firm engagements), years in operation, and their top 3 service specializations. This is background context, not a differentiator.
The firm overview section also serves as a quality filter. Providers who respond with vague or incomplete answers to basic questions will likely be vague and incomplete throughout the engagement. Look for specific numbers (exact headcount, exact years of operation) rather than generalities ("hundreds of employees" or "many years of experience").
Section 2: Service scope. Describe exactly what you want to outsource: bookkeeping for X clients, tax preparation for X returns, payroll for X employees, or a combination. Ask the provider to confirm they can deliver each service line and describe their approach to each.
Be as specific as possible in defining the scope. Instead of "bookkeeping services," specify "monthly bookkeeping for 25 clients using QuickBooks Online, including bank reconciliations, credit card reconciliations, accounts payable, accounts receivable, and monthly financial statement preparation, delivered by the 15th of the following month." The more specific your scope description, the more specific and comparable the provider responses will be.
Section 3: Team qualifications. Ask for the qualifications of the team members who will work on your account (not the company's best people who attend the sales meeting). What degrees do they hold? What US-specific training have they completed? How many years of experience with US CPA firm work? Will you be able to interview and approve team members before they start?
This section is critical because the quality of the people doing the work determines the quality of the output. A provider might have 500 employees, but if the 3 people assigned to your account are junior with limited US experience, the quality will suffer. Ask for resumes of the specific team members proposed for your engagement, and ask for the right to interview them before the engagement starts.
Section 4: Technology and systems. List your current tech stack (QBO, Lacerte, Karbon, etc.) and ask the provider to confirm compatibility with each tool. Ask how their team accesses your systems (VDI, VPN, direct login). Ask what happens if you change platforms mid-engagement.
Section 5: Data security. Ask for their SOC 2 Type II report (the actual report, not a summary). Ask about data residency (where does client data sit during processing?), encryption standards, MFA enforcement, background check procedures, and incident response plans. If they cannot produce a SOC 2 report, ask when they expect to complete the certification. Our vendor risk assessment guide covers what to look for.
Data security should be a pass/fail criterion, not a scored criterion. Either the provider meets your minimum security requirements or they do not. There is no partial credit for "we are working on it" when your clients' financial data is at stake.
Section 6: Pricing. Ask for pricing in every model they offer (per-FTE, per-client, per-return, hourly). Ask what is included versus what costs extra (onboarding, training, management overhead, software licenses). Ask when prices were last increased, by how much, and what triggers future increases.
The pricing section should also ask about hidden costs. Some providers quote a low base rate but charge separately for management oversight, quality reviews, software licenses, or peak-season surcharges. Ask for an all-in monthly cost estimate based on the scope you defined in Section 2, including every fee and surcharge.
Section 7: SLA commitments. Ask for specific turnaround time commitments by deliverable type. Ask what happens when SLAs are missed (credits, escalation, penalties). Ask for their actual SLA achievement rate over the past 12 months (not the target, the actual). Our article on SLA clauses that prevent quality slippage covers what to include.
Section 8: Quality control. Ask them to describe their internal review process before work reaches your review queue. How many people review each deliverable? What error rate do they target? How do they track and trend errors over time? Ask for their current average error rate across CPA firm clients.
The quality control section is where serious providers distinguish themselves. A provider with a mature quality program can describe their review process in detail: who reviews, what they check, how errors are classified and tracked, and what their current error rate is. A provider without a mature program will give general answers about "thorough review processes" without metrics or specifics.
Section 9: Staff continuity and backup. What is their annual turnover rate for accounting staff? What happens when your assigned team member leaves? How long does it take to assign a replacement? Is there a cross-trained backup available immediately?
Staff continuity is one of the biggest operational risks in outsourcing. If the person who knows your clients' books leaves and the replacement takes 4 to 6 weeks to get up to speed, the disruption to your firm is significant. Ask how the provider mitigates this risk and what their track record is on continuity.
Section 10: Communication and management. What communication tools do they use? What is the meeting cadence during onboarding versus steady state? Who is your primary point of contact, and what is their role? How are urgent issues escalated?
Section 11: Contract terms. What is the minimum engagement length? What are the termination provisions (notice period, transition support)? Who owns the work product? What are the data return procedures at end of engagement?
Pay particular attention to the termination provisions. A provider that requires 90 days notice and provides no transition support creates a significant switching cost. A provider that offers 30 days notice with a defined transition plan gives you the flexibility to make a change if the engagement is not working. In our experience, providers who are confident in their service quality are more willing to offer flexible termination terms because they do not need lock-in to retain clients.
Section 12: References. Ask for 3 to 5 references from CPA firms of similar size and service mix. Ask for at least one reference from a firm that started and then scaled the engagement, and one from a firm that experienced a problem and how it was resolved.
Create a scoring matrix with each section weighted by importance to your firm. A reasonable weighting for most CPA firms is data security at 20 percent, team qualifications at 15 percent, pricing at 15 percent, SLA commitments at 15 percent, quality control at 10 percent, technology compatibility at 10 percent, contract terms at 10 percent, and references at 5 percent.
Score each provider 1 to 5 on each section. Multiply by the weight. Sum the weighted scores. The provider with the highest total score gets the pilot engagement.
Any provider that scores below 3 on data security (Section 5) should be eliminated regardless of other scores. Data security is not a tradeoff. It is a prerequisite. Our data security checklist covers the minimum standards.
The scoring process should involve at least two people from the firm to reduce individual bias. If one partner evaluated the sales calls and has a favorite, having a second partner review the written responses provides a check on that bias.
The RFP narrows the field, but it does not make the final decision. We strongly recommend running a pilot engagement with the top-scoring provider before signing a long-term agreement. The pilot should involve real client work (not a test exercise), run for 60 to 90 days, and be evaluated against the specific SLAs and quality standards described in the RFP response.
The pilot reveals things that the written response cannot: how responsive the team is to ad hoc requests, how well they handle unexpected situations, whether the communication cadence works in practice, and whether the quality of work matches the quality described in the proposal. In our experience, about 80 percent of pilot engagements convert to full engagements because the written evaluation process filtered out the providers that would have failed the pilot.
Here are the questions that separate thorough evaluations from surface-level ones.
"Can I see your SOC 2 Type II report?" Not a marketing page. The actual audit report. Providers who have it will share it immediately. Providers who do not will deflect.
"What is your staff turnover rate specifically for your accounting division?" Company-wide turnover rates hide the real story. The accounting team might have 30 percent turnover even if the company average is 15 percent.
"How many CPA firm clients have left you in the past 12 months, and why?" Every provider loses clients. The ones who are honest about it and can explain what happened earn trust. The ones who claim zero client departures are not being truthful.
"Can I speak with a client who had a problem with your service?" Reference lists are curated to show happy clients. Asking for a reference who experienced a problem and stayed tells you far more about the provider's character and problem-solving ability.
"What is your average review cycle before work reaches my team?" This question reveals how much internal quality work happens before you see the deliverable. Providers who say "we deliver the first draft directly" are telling you that your team is the quality control layer. Providers who describe a multi-stage review process are investing in quality before the work reaches you.
If you want to discuss your outsourcing evaluation process or get our perspective on how to structure your RFP, reach out at madrasaccountancy.com. We will share the template we give to prospective clients and walk through how to use it. Our outsourcing dos and don'ts covers additional evaluation guidance.
Three to four. Fewer than three does not give you enough comparison data. More than four creates evaluation fatigue and you end up skimming responses instead of reading them carefully.
Two weeks is reasonable for a well-structured RFP. If a provider asks for 4 or more weeks, they may be scrambling to put together information they should already have organized.
No. Let providers propose pricing without knowing your budget. If you share a $5,000 per month budget, every response will come in at $4,800 to $5,200 regardless of what the work actually costs. Let the market tell you the price, then negotiate from there.
They often do on paper. That is why the pilot engagement (Section 12 of your evaluation) matters more than the written RFP response. The RFP narrows the field from 10 possible providers to 2 or 3. The pilot tells you which one actually delivers.
Yes, and you should. The 12 sections provide a comprehensive framework, but your firm may have specific requirements that warrant additional questions. If you serve clients in regulated industries (healthcare, financial services, government contracting), add questions about the provider's experience with those regulatory requirements. If you have specific technology platforms that are non-negotiable, expand the technology section. The template is a starting point, not a rigid format.
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