Once you've chosen a "style" of service (see Pt. 1), you'll want to ensure that your information is secure, and your private information remains so. This is where you will need to be diligent in your due diligence. Though most daily money managers are, in fact, ethical and honest (I'd give them my checkbook!), you can't alter the fact that you're dealing with people, complete with all the pros and cons it brings.
In every case, find out:
- Exactly what kind of insurance the provider carries: You want to see both general liability and professional liability (AKA errors and omissions). If you're particularly concerned about this, it's perfectly reasonable to ask what levels of coverage they carry.
- The provider's privacy policy: Ask what it is, how it's carried out, and how it's enforced. For example, privacy at our firm is such a serious issue for us that even my husband doesn't know who our clients are!
- How you have access to your information: If you've chosen a provider who comes to your location, make sure you know how where your physical and electronic files are stored, and confirm that you know how to access them. If you've chosen an off-site provider, ask how you get access to your accounting data and documents. Some, like us, put everything online for you, from documents and correspondence to activity reports and bank statements. Others put only a subset, and will upload other documents by request. That isn't a problem unless you're logged in a 2:00am and there's no one to ask for them. Others still will get copies to you on request by email, fax or mail. I personally want access to all of my information at any time, in a format I can readily use. For example, we put every document in an image file, and your accounting information is easily available in a QuickBooks file.
If you've chosen a solo practitioner/on-site provider:
- Ask about contingency planning: Is there a backup person? What kind of screening went into that relationship, and how much information does that person have about you other than what is available at your location?
- Find out what leaves your location: Ask what kind of information is kept at the DMM's location. Bills? Usernames and passowords? Anything personally identifying? Where is it stored? Is it a home office, or commercial office space? Is the space shared with or accessible to anyone not engaged in providing your DMM service? How is the data secured?
If you've chosen a firm/off-site provider:
- Understand their physical location. Is it a home office, commercial space, shared, private? Who could have access to the space that doesn't belong to the business?
- Know how are the files secured. Physical and computer files, during the day as well as after hours.
- Ask whether ANY work is done off-site. Are employees able to take work home or dial in? If so, what precautions are in place to ensure nothing is compromised when the employee is working in an environment that the provider doesn't control? It can be done, but some companies won't take the risk. In our company, for example, nothing client-related leaves the office. Employees who work with client data can't access it from outside.
These are a few of the things you should be aware of when selecting a DMM service. There are others, without question, but these make a great starting point.
