No business can survive without accounting. Bookkeeping is what takes money from clients, pays their bills and employees, and buys new inventory. Unlike taxes which are prepared at the end of the year, bookkeeping is done every day. The most suitable option for small business owners who don't have the time or knowledge to keep records on their own is outsourced bookkeeping services.
The Top 9 Benefits of Outsourcing Bookkeeping
What are the benefits of outsourcing bookkeeping? There are several benefits of outsourcing bookkeeping services especially for small businesses that can't afford to hire a full-time bookkeeper. In this article, we shall focus on nine Important benefits that business owners will enjoy if they decide to outsource their accounting and bookkeeping services. They include the following;
1. Saves Time
Many entrepreneurs are tempted to try to do bookkeeping on their own as a way to save money. They may also ask a manager to do the job. The truth is that while a company's bookkeeping is very important, it is impossible for business owners and managers to take time away from actively managing and growing the company. Outsourcing bookkeeping services allows owners and managers to focus on what's most important while still having a trusted professional handle bookkeeping duties.
Many business owners are enticed to try accounting on their own to save cost. They can also ask a manager to do it. The truth is, while bookkeeping is invaluable, owners and managers cannot afford to take the time to actively manage and grow the business. Outsourced bookkeeping services allow owners and managers to concentrate on what is most important while having a trusted professional or firm to take care of the bookkeeping duties.
Also Read: Checklist To Clean Up Bookkeeping Records
2. It Reduce Payroll Costs
Hiring a bookkeeper simply means paying both a salary and a benefit package. It also means that someone else in the business will have to devote time to hiring, training, and managing a bookkeeper. Someone will also need to cover sick leave and public holidays for the bookkeeper and the transition periods between the departure of one accountant and the start of another. Growing businesses also often need to hire someone before they have enough work to make full use of that person's time.
When full personnel costs are taken into account, outsourced accounting services are often one of the most convenient and valuable accounting options.
3. You will Get Access to Bookkeeping Software
Another thing to consider is access to bookkeeping software for small business. Businesses must pay software license fees in addition to payroll fees. Bookkeeping firms can often negotiate wholesale rates on software that are much lower than what the firms pay themselves. Accounting firms also have access to additional products that are not available to businesses or that businesses do not buy because they use them so infrequently.
Small business bookkeeping software is usually included in outsourced bookkeeping software packages. Owners and executives can access the cloud to view their books in real time.
4. Helps to Avoid Staffing and Training Gaps
When a company has only one bookkeeper, it can be a big problem when that bookkeeper gets a new job in another company or even goes on vacation. It takes time to hire a replacement and update him. While a business can postpone some activities, bookkeeping is too important to daily operations to be ignored until a new bookkeeper is hired.
Outsourced accounting services offer consistency by having a team that can cover a person who has left temporarily or permanently.
5. Reduce Bookkeeping Errors
Accounting errors can have several causes. An inexperienced bookkeeper can make mistakes. Managers with no accounting experience may not know how to properly train or supervise a bookkeeper. A company may never have taken the time, or may not have any staff with the knowledge to implement processes that reduce the risk of bookkeeping errors.
The bookkeeping outsourcing services have a team of bookkeepers chosen and supervised by even more experienced bookkeepers They also established processes to perform accounting tasks efficiently and accurately.
6. Access to varieties of Bookkeeping Services
Outsourced accounting firms provide a wider variety of services than a single bookkeeper. It is similar to the difference between having a single doctor in a hospital or having a hospital full of all types of specialists. With a general bookkeeper, the business is limited by the skills of that bookkeeper and the need to outsource any other functions. With outsourced accounting services, a company can include ongoing services or request extra services.
7. Have Fast Access to Financial Reports
When business owners and managers need to make a quick decision about the company's finance, they may not always have the information they need at their disposal. Many business decisions require you to ask the bookkeeper to write a special report, but what happens when it's Friday and the part-time bookkeeper will not resume work until Tuesday? Additionally, some accountants may not have the required business skills to process complex reports.
Outsourced bookkeeping services offer full-time aid even if a commercial enterprise would not want full-time work. All you need to get an extra report is a single phone call or sending an email to the outsourcing firm.
8. Scale With Your Business
Companies have different accounting needs at different stages. They can grow, add or remove product lines, or operate seasonally. This can make it difficult to know the correct size of an internal bookkeeping staff of a company, especially with a smaller team where even a small extra task creates a huge burden.
As business needs change, outsourced bookkeeping makes it easy to add and remove some services. You can choose to remove service you no longer need or add new services as a result of expansion and increased productivity. There is continuity as the company still has the same contact for all of its bookkeeping needs.
9. Be Ready for Tax Season
Many companies have to struggle to get all of their records ready and intact for tax season. Others who thought they had an accounting system in place find that it does not follow tax rules and their CPA will charge to redo everything afresh.
Outsourced accounting services have tax experts on staff who make sure all processes are tax compliant so your books are ready when it comes time to prepare your tax return.
When You Should Consider Outsourcing Bookkeeping Services
From my years of experience working as an accountant for top accounting firms in the UK, outsourcing bookkeeping services tend to work the best when:
- A small business doesn't need a full-time accountant, but it does need someone with more skills than the office manager or receptionist can offer
- A business of any size cannot find a full-time staff with the right skills at affordable costs.
- A growing enterprise is looking for opportunities to expand its bookkeeping and accounting services at any time.
- Temporary services are needed, for example, extra help with end-of-year reports or if a full-time employee goes on vacation, maternity leave, etc.
Notwithstanding, even if you hire an experienced and qualified person, someone (often the executive director) will still be involved in the process when approving invoices, deposits, reviewing timesheets, and so on.
If you are thinking of outsourcing your company's bookkeeping, this article has explained some of the benefits you stand to enjoy. One of the most important benefits of outsourced bookkeeping services is that you will save more money and focus growing your business and increase profitability. However, you still need to do your own findings and investigate the outsourcing firm before doing business with them.