Outsourcing agreement - part 2

What Should Be Included in an Outsourcing Agreement – Part 2 of 2

By: Odyssey Practice Management Series

Prior to checking this post out, take a recap on the first part related to what should be included in an outsourcing agreement.

This post is to present the remaining items as below.

Your obligations and those of the OSP

  • Obligations and rights of the parties to the outsourcing agreement
  • Nature of the information to be provided by you and the OSP
  • Obligations of the parties at the conclusion of the outsourcing agreement
  • Requirements for fixed or minimum volumes of work


  • Process for managing the relationship including qualitative and quantitative measures to monitor and review performance
  • Ongoing and regular communications procedures
  • Audit and monitoring procedures
  • Escalation procedures

Data retention and transmission

  • Ownership of documents and records
  • How data is to be exchanged or accessed
  • Terms of file retention by the OSP sufficient to meet your needs or as required by law

Confidentiality, privacy, intellectual property

  • Ongoing management of confidentiality, privacy and security of information
  • Keep each other’s information and correspondence confidential
  • Procedures for contacting third parties, including other party’s clients
  • Provision to allow an applicable professional body access to the documentation and procedures relating to the services provided
  • Compliance with relevant jurisdictional privacy legislation

Security and data protection

  • Ensure transmitted data is free from software viruses, spyware and all other malicious software threat
  • Put in place and to use all reasonable security and other access controls to protect all electronic data
  • Restrict access by OSP staff
  • Terms of file
  • Detail where data is stored, particularly if data is being stored on the Cloud


  • Non-compete sections to protect both you and the OSP

Dispute resolution and jurisdiction

  • Procedure for escalation of disputes
  • Well-defined dispute resolution mechanisms including jurisdictional considerations

Governing law and jurisdiction, signing parties

  • Governing law and jurisdiction of this agreement
  • Valid signing entities
  • Valid signing parties


  • Miscellaneous procedures for changes in business structures and / or ownership structure
  • Use of other external service providers or entities e.g. actuarial service providers, SMSF auditors
  • Details of liability and professional indemnity insurance held, including jurisdictional coverage

You should review and complete the checklist to ensure “Due Diligence” on what should be included in an outsourcing agreement, as per requirements of APES GN 30: Outsourced services.

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