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How do you handle data privacy when outsourcing bookkeeping to India?

Outsourcing bookkeeping to india

Outsourcing bookkeeping to India can be an extremely attractive proposition.

There are many trained bookkeepers with reasonable English language skills, and let’s face it, the relative hourly rate is not to be ignored.

Outsourcing bookkeeping to India

Sharing data with 3rd parties wherever they are requires some basics. Sharing data with anyone or any organisation other than your own should only be done with contracts that:

  1. Make explicit provision for confidentiality
  2. Require the 3rd party to follow GDPR (when handling information on UK or EU citizens)
  3. Follow the appropriate model clauses if outsourcing to a country the EU/UK do not regard as adequate
  4. Are supplemented by explicit data processing instructions on security and what must be done with the data (and what must not) – sometimes known as a data processing agreement (DPA)
  5. If the shared data is ‘special category data’ then proper records of the sharing and processing must be kept by all parties (you and your outsourced organization)

India is not currently on the EU list of countries with adequate data protection for individuals. The UK follows this list too.

So it is necessary to do a proper assessment of the risk to individuals of sending their data to India, and to make sure that the appropriate safeguards and security are in place before doing so.

And it is necessary to conduct spot checks and due diligence during the outsourcing contract rather than simply rely on initial assurances.

Outsourcing bookkeeping to India

Many sole traders and employees will find their records being processed as part of normal day to day bookkeeping. The fact this is for a business purpose does not detract from the fact this is personal data. If the records also hold banking information (in order to pay them) this data may pose a high risk to the individual and should be securely transmitted and held. Ideally information should be shared through a secure portal rather than email.

If payroll is processed in India along with statutory sick pay records, maternity and paternity leave records, you will be outsourcing the processing of special category data which will require more record keeping and security beyond the basics for GDPR. And of course any payroll check offs for Trade Union membership will also be special category data.

Outsourcing bookkeeping to India

Do your customers know you are outsourcing bookkeeping to India?

Remember your data privacy policy and on boarding correspondence should make it plain to your clients that their data, or their supplier/employee data is being processed in India.

The days of secret outsourcing are functionally over, since one of the key requirements of GDPR in the UK and the EU is transparency. You will find it hard to meet that test if acting secretly.

In an increasingly global outsourcing world, India is always going to be a big player in the bookkeeping and accountancy world. But India’s data privacy legislation has lagged behind Europe to a degree. Which means it is your job to select suppliers who comply with appropriate standards and train their staff properly.

The responsibility for secure data processing and compliance will always remain with you. Remember:

You can outsource the work – but you can’t outsource the responsibility

If you want to take care of all of this in plain english so that you and your bookkeeper can understand what needs to be done then check out our global bookkeeper range – including a hiring agreement.

Designed for the way you work today with all the elements you need for cross border data transfers.

They can be supplemented by our straightforward online programme GDPR for financial experts which comes with one year’s group support.

Plus the occasional power hour if you need one.

Find out more on here

How do you handle data privacy when outsourcing bookkeeping to India? 1

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