According to market and consumer data specialists, Statista, 64% of small business owners take care of their own books with the help of some type of accounting software. That means most of you are working too hard at something you could easily hand off to someone else.
Outsourced bookkeeping has significantly transformed the financial workflow of many busy business owners. In this post, we’ll get into what exactly is involved in outsourced bookkeeping as well as several benefits you might be passing up if you decide to keep doing it yourself.
What Are Outsourced Bookkeeping Services?
Outsourced bookkeeping and accounting services are third-party companies that take care of accounting functions that have traditionally been done in-house. When you hire an external team to handle your bookkeeping, you open yourself up to several benefits (which we will cover later in this post.)
You can choose to outsource bookkeeping services through a CPA firm, an independent contractor, or one of several companies that work remotely from all over the world. There are pros and cons to each, but they all deliver the same basic functions:
- recording transactions
- posting debits and credits to your general ledger
- creating invoices
- posting payroll
- balancing your accounts and record books
For a deeper dive into the differences between what a bookkeeper does and what an accountant does, take a look at a post we did on “Bookkeeping vs Accounting (How To Improve Your Business By Choosing The Best One)”.
How Does Outsourced Bookkeeping Work?
No matter which type of bookkeeping service you decide to work with, the process of hiring them is pretty much the same.
The first step after making contact with the company or individual is to sign a contract in which you both agree to the terms of the arrangement. (Most bookkeeping services will have already created something that spells out what their fees are, what they deliver, and how often. If they don’t provide you with anything like that, move on…they’re not professional enough for your business.)
Next, they should spend time getting familiar with how your business operates. After that, they can begin providing you with the services you need and regular reports to keep you informed.
At CRS CPAs, for instance, our monthly bookkeeping service works like this:
- We spend time getting to know you and your business.
- We put together a recommended plan of services based on your needs.
- Tax Accounts & Planning
- Payroll & HR Services
- Monthly Income Statements & Balance Sheets
- Quickbooks Consultation & Training
- We deliver monthly (or quarterly…whatever you need) reports so that you always have the most accurate and up-to-date information regarding your company’s financial position.
- We are readily available to help with any questions or situations that come up.
Why Should You Outsource Bookkeeping Services?
There are lots of good reasons why you should outsource bookkeeping services. Here are 4 big ones:
1. Cost Savings
One of the biggest advantages of outsourcing your bookkeeping is how much money you save compared to having a full-time in-house bookkeeper on your staff. According to Salary.com, the average bookkeeper’s salary in the United States falls somewhere between $38,000 and $48,000.
Salary isn’t the only expense, though. You’ve also got to factor in the cost of benefits, insurance, workspace, training, and supplies. Also, when that person is sick or on vacation, you’ll need to pay someone else to cover their bookkeeping responsibilities.
When you outsource bookkeeping instead, you could save anywhere from 40-60% compared to all of those in-house expenses. You’ll avoid all of the overhead costs and will only pay for what you need when you need it.
2. Time Savings
Bookkeeping involves a lot of data entry and paperwork that can be extremely time-consuming. By outsourcing those responsibilities, you free yourself or your team members up to be able to focus on tasks that help grow your business.
3. Fewer Errors
When bookkeeping is just one of the many tasks you’re trying to juggle as a small business owner, it’s nearly impossible to give it the attention it deserves. And even though the tasks can seem routine (entering transactions, balancing accounts, creating invoices, etc.), it’s incredibly easy to make a simple mistake that can end up costing you a lot of money.
In-house bookkeepers often have a lot of errors during their initial training periods, especially if they’re new to the field. However, a dedicated team of bookkeepers with a company that you outsource to comes with lots of experience, specialized automated software, and a total focus on making sure all of your numbers are correct.
4. Flexible Services
Your business isn’t going to need every bookkeeping service all of the time or in every season. Why lock yourself into paying for things you don’t need?
Maybe you require monthly reports, but you might only need them done quarterly. You might not have too many regular transactions to record, so you might only need help with payroll every couple of weeks. Every business is different at different stages of growth.
Outsourced bookkeeping firms are able to customize their services to exactly what you need at any given time, saving you even more money.
Additional Benefits of Outsourced Bookkeeping
Those 4 benefits are pretty straightforward, but here are a few additional benefits of outsourced bookkeeping that you might not immediately think of.
- Improve Operational Efficiency – When your employees are able to focus on their core tasks instead of financial data entry, they can do their jobs more efficiently. Less time and money are wasted in areas of your business that don’t directly generate revenue.
- Maximize Productivity With Outsourced Bookkeeping – Shifting your bookkeeping from in-house to an outsourced firm or individual lets your staff accomplish more, sell more, and grow your business more.
- Enhance Business Efficiency – Outsourced bookkeeping helps to simplify your business by delivering timely relevant financial information to you on a regular basis without any effort on your part. When good data syncs with the patterns of your workflow, that efficiency can only lead to better profits.
Streamline All Of Your Financial Operations
Our team of bookkeeping and accounting experts has been helping small business owners just like you streamline their financial operations through outsourced financial services for over 40 years. We understand how trying to do it all yourself only holds your company back. So let us show you how we can take the bookkeeping burden off of your shoulders so you can work on growing your business. Schedule a call today to learn more!
