Outsourcing Your Bookkeeping
Despite the odds, you’ve done it. You have your own business, and sales have never been better. Several employees are even talking about making you “Boss of the Year!” As you look over the incoming cash flow and the costs it takes to keep the business running, a realization dawns on you. Keeping track of the financial records is a full-time gig, and your time is already monopolized by other business functions. You’ve got the financial capability now, so use an outsourced bookkeeping firm to do the bookkeeping for you?
Why Should You Outsource Your Bookkeeping?
You didn’t get into the business you’re in to be the bookkeeper. It takes away time that is better used to focus on your main business functions, and it can be tedious to manage all of it. When you outsource your bookkeeping, you’ll still receive essential reports like your balance sheets, cash flow statements, and income statements, but you won’t be the one creating them. Not only will your bookkeeper handle this, but they also work with tax preparers to make filing your business’s taxes more efficient. But how do you know when the best time to outsource your bookkeeping? There may be a few key signs to look out for.
- The “Do It Yourself” approach to bookkeeping is taking up too much time
- Your books are never up to date
- Cash flows are unpredictable, and it is hard to stay on top of
- There’s been some struggle tracking accounts receivable and accounts payable
- Estimated tax payments are cumbersome, and you’ve missed some write-offs
- Bookkeeping has you fatigued and is taking up more time from your personal life
All businesses require some form of bookkeeping, and even if you don’t see your specific situation reflected in this list, it doesn’t mean that you don’t need to outsource a bookkeeper. Having consistent records and books is going to be vital when it comes to business development and growth, and hiring an expert can take a load off of your shoulders. So now that you’ve decided you want to outsource a bookkeeper, what options are available to you? There are three main types of outsourced bookkeeping: In-House, Local, and Virtual
In-House:
The first option companies have is hiring an in-house bookkeeper. If your business has grown large enough to need to utilize a permanent on-staff bookkeeping professional, this may be the best option. However, in-house bookkeepers may be the more expensive option but can be uniquely fitted into your business needs. It’s essential to weigh the pros, cons, and cost-effectiveness of this option.
Local:
Local bookkeepers are your financial experts with teams near your business. If you value face-to-face meetings and physical record keeping, a local outsourced bookkeeping service may be ideal. There are two main types of local bookkeepers: freelance and firms. Freelance bookkeepers are typically individuals with varying levels of experience and may be capable of working virtually, in person, or both. Because of this, the cost of bringing on a freelance bookkeeper varies. Bookkeeping firms, on the other hand, often charge more than a freelancer but can offer certain reassurances like certified accounting professionals and consistent availability.
It is important to remember that regardless of whether your locally outsourced bookkeeping service is a bookkeeping firm or freelancer, they are not your employees. Trust becomes vital in this equation, and if this is the route chosen, see if the service offers secure account-keeping software. You’ll be handing over important financial documents, credit card invoices, and financial information, and without trust between the business and the outsourced bookkeeping service, it can become a risky situation. Never give the bookkeeper control over your treasury functions like investments, wire transfers, check signing, and online payments. You alone are the signing authority.
Remote:
As the name suggests, virtual bookkeeping connects you with a virtual accountant and provides digital bookkeeping services. The outsourced firm will connect you with an accounting expert and provide a secure account where your merchant processor can automatically send all of your financial data. This mitigates the need to send paper receipts to and from your accountant and allows them the ability to access your financial records without being in person. They may also provide an end-of-year service during tax season that will contain all the paperwork needed for tax season.
This option can be both affordable and beneficial for businesses looking to get their feet wet with outsourced bookkeeping. But how do you know if virtual bookkeeping is right for you? If you are comfortable with online banking, want access to digital records via mobile apps, prefer a flat monthly rate over hourly billing, and/or prefer chatting with your experts online or over the phone, this option may be best for you.
Talking with bookkeeping professionals and discussing the types of services they can provide can only benefit you and your business in the long run. Each company has its own needs and requires different kinds of services. The long and short of it is that you evaluate your options and choose the best for you and your businesses.
Need help taking the next steps? Let’s talk! Schedule a free 30-minute consultation to help you determine the best bookkeeping solution for your business.
