Why Outsourced Bookkeeping Services Are A Big Key To Your Business Success

Sep 27, 2023 | Bookkeeping

When you’re looking for ways to get ahead in business, don’t overlook outsourced bookkeeping services.

Oh, sure. It’s not a topic that’s nearly as exciting as buying a fancy piece of equipment, planning a new marketing campaign, or cutting the ribbon on the perfect retail location. You probably won’t find many small business owners posting Instagram Reels about their bookkeeping, either.

But having a good bookkeeper on your team, even virtually, can sometimes make all the difference in whether your business succeeds or fails. Keep reading to see why.

outsource bookkeeping

Outsourced Bookkeeping Services

Outsourcing is the process of hiring an independent third party company to do something that you would otherwise do in-house. And for many small business owners, outsourcing is used to hand off tasks that they would have to handle personally. 

According to Stephen King, CEO & President of Growthforce (not the fiction writer) in an article for Forbes on “The Future of Outsourcing”, two industries seem to be dominating the world of outsourced services: Information Technology (cybersecurity, cloud computing) and business processes (HR, bookkeeping, etc.)

He cites a 2019 study from Clutch which reports that 37% of small businesses outsourced at least one core function at that time. We can only assume that number has continued to grow since then. 

Bookkeeping is one of the first (and biggest) tasks small business owners tend to outsource. So what do outsourced bookkeeping services include?

  • Gathering and maintaining external account information from banks, credit cards, invoices, etc.
  • Reconciling all of your accounts to make sure everything is correct and up-to-date
  • Tracking your accounts payable and accounts receivable
  • Creating end-of-month financial reports (Profit & Loss Statements, Cash Flow Reports, Balance Sheet…we explain in another post why these are the 3 Most Important Types of Financial Statements Your Business Needs)
  • Assisting with payroll

These are just a few of the main things that outsourced bookkeeping services can help you with.

Why You Should Outsource Bookkeeping

For many years, outsourcing was seen as something to be skeptical of in the small business world, even though many owners already outsourced much of their personal lives. Think about paying someone to mow your yard, wash your car, train your dog, or clean your house. They’re all things you could do yourself, but for the sake of time and/or convenience, you choose to outsource them.

Outsourced bookkeeping services are an example of the small business equivalent of those things. Any owner is perfectly capable of handling their own bookkeeping tasks. However, the demands of business quickly become so great that it is no longer practical or a wise use of their time to do it.

In fact, trying to maintain a DIY approach to your small business finances is one of the 4 simple accounting mistakes that are costing your business money that we’ve written about before. To recap, those mistakes are:

  1. Falling behind in paperwork
  2. Failing to keep receipts
  3. Not backing up your financial data
  4. Trying to DIY

There’s a good chance that, like most business owners, you either have struggled or are currently struggling because of one or more of those mistakes. And that’s just not right. It shouldn’t be that way.

When you outsource your bookkeeping operations, you open yourself up to a whole new world of benefits, and those mistakes get taken care of almost right away. National Business Capital (an organization that specializes in helping small businesses save money when looking for financing), gives us their top 9 benefits of outsourcing bookkeeping.

  1. Payroll savings
  2. Time savings
  3. 24/7 cloud-based access
  4. Fewer errors and more accuracy
  5. Detailed insights
  6. Instant financial reports
  7. Better information for better decision making
  8. Easier tax prep
  9. Scalability

We’ve found all of these things to be absolutely true, and they are game-changers for stressed and struggling small business owners. Additionally, as we pointed out recently in a post on 7 ways outsourced bookkeeping can improve your operations, it can

  • Improve your operational efficiency – allowing you and your employees to focus valuable time on more important projects
  • Maximize your productivity – letting you stay focused on getting more of the tasks done that directly help grow your business and lead to more profits
  • Enhance your financial efficiency – giving you better information in a more streamlined way lets you make big decisions better so you can take advantage of fast-moving opportunities

Hiring An Outsourced Bookkeeper

Now that we’ve shown the benefits of hiring an outsourced bookkeeper, here’s what you should look for and how to actually go about doing it.

First, avoid the mistake of hiring the wrong bookkeeper by checking the following things first:

  1. References – Before you partner with anyone, talk to a few of the people they’ve worked with before, just as you would if you were looking to fill any other staff position. Ask for the contact info of some previous clients. Then ask lots of questions of those references. (Are they good at what they do? Did they deliver on time? Did they communicate quickly? Were they difficult to work with?)
  2. Qualifications – Make sure the bookkeeper you’re thinking of hiring (whether a freelance individual or a larger company) can demonstrate credentials, certifications, and experience that show that they are actually qualified to do the job. If they can’t, move on.
  3. Services – Find out upfront what all they are capable of doing. Some freelancers may only have the capacity to help you balance your books. If you’re looking for payroll help too, you’ll want to look elsewhere. Better to find that out before you sign a contract with them than later!
  4. Cost – A less experienced bookkeeper is going to cost less per hour than someone who has been at it a while. And the more services you’re requesting, the more you can expect to pay. The average part-time rate for a bookkeeper is $20/hour, so use that as a benchmark in setting your budget for this role. Depending on the individual and what you’re needing them to do, outsourced bookkeeping can cost anywhere from $500-$2500 per month. (For more, check out the post we did on “How Much Should You Pay For Bookkeeping Services.”)
  5. Precision – Attention to detail is everything in bookkeeping. If you get the slightest hint that the person or company you’re considering isn’t all about meticulous precision when it comes to financial recordkeeping, keep looking. Maybe even consider giving them a test project to work on that has some intentional errors just to see if they catch them.
outsourced bookkeeper

Outsourcing Bookkeeping For Decades

For the past 40+ years, our team of accounting professionals has been helping clients with their monthly bookkeeping so they have the best information to make decisions that grow their businesses. If you are considering outsourcing your bookkeeping, no matter where you are in the country, schedule a call to discover what we can do for you.

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