Given the monotonous and repetitive nature of data entry, it should come as no surprise that the function is a popular candidate for outsourcing. Growing businesses have an urgent need for an efficient and reliable way to manage their digital information, and internal resources are better off being put towards core competencies.

Let’s take a closer look at what there is to gain from outsourcing your data entry needs. 

When to Outsource Data Entry

Consider the following questions in relation to your data entry department: 

  1. Are your operating costs on the rise?
  2. Do you lack the necessary technology and tools?
  3. Is it challenging to stay efficient?
  4. Will your employees prefer doing something else?
  5. Do you spend too much time on data entry?

Chances are that you’ve answered ‘yes’ to at least one of these questions. In that case, outsourcing your data entry needs is certainly worth consideration. For a more detailed look, assess the factors listed below to make an informed decision about whether now is the right time to outsource data entry. 

Cost Savings

We already touched on the fact that reducing expenses shouldn’t be your priority when outsourcing. At the same time, it needs to improve your bottom line or at the very least break even. If you don’t see that happening in the near future, then you may end up spending more than you end up saving. 

It doesn’t take any special expertise to work it out. Simply assess whether outsourcing will help lower your spending with regards to compensating employees and buying equipment. This has to be done while maintaining a balance between quality and cost savings. The vendor’s pricing structure will likely play a role in this.  

Resources and Technology

When selecting vendors, you should ask about the technologies they plan to use on your data entry projects as well as their available resources. Determine whether they have the necessary expertise and ideally, more than that of your internal staff. Their systems should be up-to-date and capable of meeting industry standards. 

If your team can do it better, then the move may not be worth making. 

Meeting Deadlines

In a similar vein, your outsourcing partner should be able to toe the deadlines set by your data entry department. If they fail, then it can lead to costly bottlenecks that outweigh any of the potential cost-saving benefits. Assured quality and timeliness is a must. Making your queries beforehand will help with this. 


It should be a given that your outsourcing partner will take care of everything from the start. Of course, you’ll need to provide a certain degree of input, but the less hand-holding required, the better. Otherwise, you won’t be able to take advantage of the opportunity to focus on core competencies. 

Make it a point to visit the outsourcing company’s website. Researching about them on the internet and contacting past clients is also a good idea. This will help you determine if they’re trustworthy enough to justify the move. You might be dealing with sensitive data that can’t be handed over to a third party without serious due diligence. 

Service Level Agreements

Another way to ensure that outsourcing is worthwhile is to check potential vendors’ Service Level Agreements (SLAs). It’s one of the most crucial documents for any partnership and outlines the level of quality you can expect from the services you’re getting. Consider hiring a lawyer to help you understand the details.

If you can verify that their Service Level Agreement fits your standards and needs, then outsourcing is likely the right choice. But if you struggle to find a vendor that cannot meet your requirements, it may be better to keep your data entry tasks internal until you can find a suitable partner. 


The last factor to consider is communication. This is crucial whether you’re working with an onshore or offshore team. Your provider must be able to handle your queries promptly and sufficiently understand what you’re asking for. Cultural and linguistic barriers may be particularly problematic among overseas outsourcers. 

Again, it’s up to you to determine whether you can communicate with any outsourcing partner effectively enough to justify the move. If not, then it might be worth waiting a bit. 

How to Start Outsourcing Your Data Entry Tasks 

After deciding that data entry outsourcing is suitable for your business, you can start building a shortlist of vendors. Security is a major priority here, so you can rule out any provider that doesn’t have a solid privacy policy. 

What shouldn’t sway your decision is an attractive rate. The cheapest option is seldom the best one, and you’ll likely end up paying hidden fees later on. Outsourcing companies that bid low are inevitably cutting corners and making compromises. They may also extract profits in a way that you won’t agree with. 

Be sure to inform internal staff about your outsourcing decision and ask for suggestions. This may lead to useful insights. 

Remember that you need to create a win-win situation to foster a positive relationship. Look out for vendors that can provide customer references. Ideally, they should have a few testimonials, awards or other forms of recognition to give you peace of mind that you’re making the right choice. 

Avoid entering deals with rigid pricing options. There should be some flexibility that allows you to pay in a manner that you’re comfortable with. As mentioned earlier, it’s a good idea to work with your partner for a trial period before putting yourself under any obligation to move further. 

Here are some additional guidelines to help you get started on the right foot:

Define Your Objectives

Businesses that are considering outsourcing data entry need to be cognisant of the reasons for their decision. It’s not enough to make the move simply because it saves money or time. What your partner can deliver should resonate with the requirements of your business. Make sure that they’re aware of your objectives before signing any contracts. 

Shop Around

If you want to get the best service, it’s important to talk to a few outsourcing companies instead of settling on the first provider that seems to fit the bill. Finding a winning vendor can be challenging in today’s market as there are so many to choose from. Depending on the scope of your project, you may also have to choose between agent and agency.

Smaller businesses might find it better to opt for one or two freelancers if their data entry requirements aren’t huge. Websites like and freelance platforms such as Upwork and PeoplePerHour provide a thorough list of options. Carrying out independent research is also possible, as long as you know what to look for. 

It’s always a good idea to ask for referrals and recommendations from other businesses that share your needs.

Establish Clear Deadlines

You naturally want your data entry tasks to be completed within a specific timeframe. Although reliable companies are sure to satisfy in this regard, it’s still wise to be clear with your expectations when it comes to deadlines. The vendor’s Service Level Agreement and documented procedures should give you an idea of what they’re capable of. 

Review Their Contracts

Similarly, it’s important to read between the lines (ideally with the help of an attorney) to have a proper understanding of what your future outsourcing partner is promising. If not, you may miss out on some crucial points that can have you dealing with unforeseen problems. Be wary of any obligations that a provider may hold you to as per their contract.

Focus on Transparency

With any outsourcing relationship, both parties need to be open and transparent about how work will be handled. Pay attention to the way a vendor discusses their terms of service. They should be clear about hours and quality standards. No less crucial is that they inform you about their approach to privacy and security. Prioritise this at all times. 

Start Small

Finally, keep in mind that it’s always wise to start small – even with a function like data entry. This approach is particularly helpful for small businesses that are unfamiliar with the outsourcing process. Try to hand over less major tasks in the beginning instead of shipping off the entire department.

In doing so, you can get a taste of your partner’s work style and ability to meet deadlines. Even better is to ask for a trial run where you can test their capabilities and quality of work before making any commitments. Some payment models used by outsourcing companies can lock you in with them for a specific period, so it’s a good idea to take it slow. 

Advantages of Outsourcing Data Entry

The following are the main benefits of data entry outsourcing. Knowing what the move can do for your company will help you get a better idea of how to approach the decision. 

Reduced Risk

By handing over your data entry tasks to a third party, you’re entrusting the work to qualified experts. This decreases the likelihood of errors while ensuring that work gets done faster. Partnering with an overseas vendor in a different time zone can be even more advantageous as you have the opportunity to complete processes overnight. 

Let’s not forget about employee turnover, which throws all of the time and money you spent on training out of the door when someone leaves. It can also disrupt your operations and lead to other costly issues. Outsourcing offers a greater level of consistency by ensuring that you have a steady output at all times. 

Workload and Productivity

Similarly, outsourcing data entry eliminates the need for your own staff to spend time on the task. They can focus on utilising their talent and doing what they enjoy instead, which leads to happier and more productive employees. The final product ultimately makes for more satisfied customers. 

Cost Savings

The main reason that most companies outsource data entry is to save money. According to Invensis, you can expect over 40% of your operational expenses to be cut out of the picture. This leaves you with more funds to allocate elsewhere in addition to offering more competitive rates. 

You can choose to gain an edge by lowering your prices, or by moving your capital to other departments that are conducive to growth. Either way, the cost savings benefits of outsourcing are extremely beneficial. But that isn’t to say they should be your sole reason for making the move. More on that later.  

Lower Overheads

Another way that outsourcing saves money is by reducing your overhead expenses. The vendor you work with will be responsible for covering the cost of hiring, training and maintaining staff. Paying for the related infrastructure, including hardware, software, utilities and office space, will also be a thing of the past. 

Moreover, you won’t have to take on the expenses that come with hiring temporary staff, who seldom deliver the same level of quality that dedicated staff – who have the incentive to work harder – are able to produce. You’re only paying for what you consume, which improves flexibility as you can tailor your service usage to your needs.

On top of that, leveraging labour market arbitrage wherever possible (and correctly) is a smart move. With an outsourcing company, they can take on the hassle of hiring in a low-cost country. This ensures that you receive a higher quality output at a reduced cost.

Control Cash Flow

Another cost-related benefit is that you can please investors by showing more room to put money towards revenue-generating processes. Businesses that aren’t saddled by cumbersome fixed expenses can adapt to changing market conditions faster, making them more suitable candidates for investment.

Furthermore, you won’t have to spend on technology and infrastructure as a means of keeping up with the times. Those will be your provider’s responsibility, making it easier to compete – especially if you’re a small business.

Access to Resources

Hiring a new team or even one employee to handle your data entry needs requires costly recruiting and training. You also have to facilitate them with the right tools and equipment. Outsourcers already have these resources, as well as the talent, skills and expertise required to deliver optimal results. 

Data Security

The right outsourcing company will have measures in place to ensure that your data is secure. This applies not only to prevention, but also recovery. Some events, such as natural disasters and human error, are largely unavoidable. It’s how the vendor responds to them that matters, which includes having the necessary backup methods in place. 

These can be expensive to implement in your own business. Reliable providers will already have these measures, giving you one less thing to have to put your money towards. It’s also one less thing to worry about. You can gain peace of mind knowing that you are complying with the rules that are relevant to the department. 

That said, this can go both ways. You need to ensure that the company you’re working with actually has necessary procedures that protect your data. Reading the contracts and assessing their approach to privacy is key. 

Disadvantages of Outsourcing Data Entry Tasks

It’s important to be aware of the potential setbacks that come with data entry outsourcing. This will help you mitigate your risk before any problems arise. Remember that these disadvantages can mostly be made a non-issue by taking the right steps to ensure that you’ve chosen a suitable and reliable partner. In any case, you need to know what they are.

Quality Standards

Since most vendors are working with several businesses at once, it can be difficult for them to focus solely on your organisation’s tasks. You need to clearly communicate your quality standards and work with a partner that provides updates on the status of your processes so that you can perform regular checks. 

Loss of Control

By outsourcing your data entry needs, you’re losing some if not all control over how those tasks are being performed. Staying in touch with your vendor is key here. They should be able to deliver regular feedback reports that detail what’s going on. You may be shipping off the function, but that doesn’t mean you’re letting go of the responsibility. 

Privacy Issues

Outsourcing has the inherent risk of exposing confidential information to a third party. This contributes to a higher risk of data leaks and falling victim to cyberattacks. Make sure that your provider has strict policies in place to maintain the security of your data, which includes following the relevant laws, regulations and guidelines pertaining to privacy. 

Shared Financial Burden

While not always the case, outsourcing means you may be tiering the financial well-being of your business to the third party. You need to read the contract carefully and understand how issues with the outsourcing company may affect your own. If they fail to deliver, you should know that your business won’t take a financial or productivity hit as a result. 

Communication Barriers

One drawback of working with an offshore outsourcing company in particular is the possibility of cultural and linguistic differences. This can lead to poor communication channels and misunderstandings that hinder productivity. Choose a partner that’s reputable in their market and try to work with them for a trial period to see how things play out. 

Time Frames

Working with a data entry outsourcing company in another time zone can be beneficial. As we touched on earlier, it may help you complete work overnight so that you’re up to date the next morning. However, this can go the other way as well. Offshore providers should be able to operate around your local times so that you can communicate efficiently. 


The importance of finding the right provider extends to quality of output. The wrong vendor can cause issues such as delays in deliverables, authorising inappropriate responsibilities and more. Again, it comes down to the provider you choose and reading their contract. Knowing what procedures they use for quality control will help you decide. 

Moral Dilemmas

One final consideration has more to do with your internal team than the outsourcing company. It may not always be an issue but shipping off your data entry work to an external provider can be seen as something negative by your own staff. It depends on whether they will be forced to leave or are able to focus their efforts elsewhere in the business.

This can decidedly be positive, as data entry probably isn’t at the top of your employees’ lists of favorite tasks. If you can find something else for them to do in the business that’s more conducive to growth and perhaps even a better salary, then the outsourcing move is a good idea. Discussing the matter with your team will help you gain the necessary insight.

How to Choose a Data Entry Outsourcing Provider

Make the following checks when looking for an outsourcing partner. 

  • Credentials and industry experience 
  • References to previous clients
  • Understanding of how to provide effective solutions
  • Privacy and data security policies
  • Access to the latest technology
  • Adequate infrastructure and human resources
  • Transparency with processes 

When initiating a deal, there should be robust and meaningful Service Level Agreements that are written in accordance with your needs and expectations. The location of your vendor is also important. Ideally, offshore providers should be in a well-governed country that isn’t prone to civil unrest or economic downfall. 

Your outsourcing partner should be able to scale up your processes as needed. This ensures that they can comfortably take on greater demands come periods of growth. Take a look at their technology. Do they have Optical Character Recognition (OCR) and Intelligent Character Recognition (ICR) or other forms of automation?

The better-equipped your provider, the faster and more accurate their output will be. With the above points in mind, you can develop a plan based on the following steps to ensure that you’re partnering with the best of the best: 

Image and Reputation

When you come upon a suitable provider, take some time to look into their online presence and company image. The former should be given. If they can’t be found or their digital footprint is minimal, then they either have something to hide or are newly established. While it’s great to support small businesses, this is no time to take risks. 

Investigate their work. A reliable outsourcing company will have more than just testimonials. They should also be able to provide examples of what they’ve done for other businesses – especially those in your industry. Moreover, they should allow you to get in touch with previous clients so that you can ask them about their experience with the vendor. 

Look for Expertise

As you can probably guess, it’s a better idea to stick with providers that have dealt with businesses that have the same data entry needs as you do. Technical expertise is a must if you want your partner to deliver accurate and timely work. Proven ability to tackle complex challenges and genuine passion for the project are winning qualities here. 

The general rule of thumb is, the more a provider is capable of doing (such as their software proficiency), the more likely you are to see an output that’s in accordance with your quality standards and expectations. If you’re dealing with a local vendor, then you may want to visit their office and take a look at the technologies they’re using. 


This can be tricky. You don’t want to overpay for something that’s available cheaper elsewhere. But you also don’t want to skimp on pricing and get stuck with a vendor that keeps making mistakes or compromising the security of your data. Superior services cost more than average, so determine how much you’re willing to put forward in advance. 

Privacy and Security

Needless to say, this is a major concern, especially when you’re dealing with sensitive information. It’s highly recommended that you enter a nondisclosure agreement with your future provider before sending over any data. Make sure that your internal security is also up-to-date and up-to-standard to mitigate any risk as much as possible. 

Your vendor must have procedures in place to conduct regular network and security audits on their premises. They should also utilise encryption, firewall, backup and recovery tools to prevent data loss. 

Agile Methodologies

A lesser known but no less important factor to consider when choosing a provider is Agile methodologies. This refers to the focus on collaborative efforts and providing quick results without forgoing quality. Vendors that value Agile methodologies are also more capable of adapting to your changing needs come any periods of growth. 


This is crucial not only when it comes to pricing, but also meeting your needs as time passes. The best vendors are able to adjust their charges and fees to suit your needs as opposed to being rigid with their prices. When offshoring your data entry, the provider must also be able to work around time zone differences to maintain effective communication.   

Keeping Track of Outsourced Data Entry Projects

Finally, the right vendor will have a reporting structure in place that keeps you informed about what’s going on with your work. They should also have open communication channels that are available throughout the day for both sides to stay in touch. Their internet bandwidth will play a role here, which goes back to the importance of infrastructure. 

Check the relationships between employees and other personnel in their departments to see how information is passed around. Ideally, you’ll have some control over who exactly works on your data. This will ensure that only the best labour is assigned to your processes. 

There are lots of tools that you can use to keep track of where your outsourcing partner is with your data entry tasks. Here are a few recommendations: 


This popular project management software makes it easy to stay organised and maintain effective communication with external teams. Basecamp provides a message board that can be used by both parties to post updates and feedback in a simple “story” format. You can assign work to specific agents, send reminders about upcoming deadlines and more. 


Another tool focused on tracking, Redbooth helps you and your external team get on top of day-to-day tasks. Integration features allow you to connect the software to your chat, email and other communication channels so that everything is centralised, while checklists and productivity reports keep you informed on your provider’s progress. 


This tool aims to help teams work in flow and collaborate efficiently. Like other project management software, Asana enables you to track processes, schedule meetings and send reminders. Thanks to comprehensive integration, it serves as another great way to manage your entire data entry outsourcing work in one place. 

Process Street

A powerful task management tool, Process Street is particularly suitable for data entry as it mainly focuses on recurring tasks. Using their built-in templates, you can run multiple instances of them as checklists while tracking agent activity and receiving notifications when tasks are complete. It’s also an effective tool for creating documents and guidelines.


Small businesses will be especially fond of Worksection’s affordable pricing options. This is also true for their wide range of features. A single interface allows you to manage all of your outsourcing processes including activity overviews, overdue tasks, incoming tasks and project lists. You can also make use of timelines and expense tracking. 


Many companies that outsource their business processes choose Proofhub to plan, organise and collaborate on projects of all sizes. Like other software on the list, it offers features such as workflows, discussions, documents and calendars. Proofhub also runs in the cloud and integrates with other apps for maximum efficiency. 

Zoho Projects

If none of the above-listed options suffice, then Zoho Projects will likely fit the bill. It assists in planning, management and collaboration with external teams. You can keep track of their progress and make comments on work as it gets sent through. File importing and coordination on daily work, along with countless other features, come standard. 


This predictive project management software is perfect for businesses that require the most efficient possible approach. It takes care of organisation and scheduling to afford you even more time to focus on other tasks. LiquidPlanner can even predict when projects will be completed, helping you get a stronger grip on deadlines when you’re uncertain. 

Honorable Mentions

Let’s top off the list with a few more useful tools for keeping track of your data entry outsourcing activities. 

  • Podio
  • Freedcamp
  • Wrike
  • Flow
  • Yammer
  • Jira
  • Pivotal Tracker

Google’s own G Suite package is worth mentioning as well. It includes Docs, Sheets, Drive and Calendars. Together, the comprehensive set of tools can serve as a reliable way to store, manage, communicate and collaborate. Plus, documents can be edited in real-time by multiple team members, making it a perfect fit for data entry. 


There’s a fair bit to consider here. Rest-assured that putting the time into finding the right partner will pay off in the end and allow you to reap the benefits of data entry outsourcing without facing any of the risks.