As a small business owner, you have many responsibilities. You are the one in charge; everything falls back to you. But that doesn’t mean you have to DO everything. In fact, no one person should be doing all the tasks needed to run the business. Firstly, you don’t have enough time; secondly, you may not have the expertise; thirdly, you may not have the desire.
Of all areas required to operate a business, there is one that most business owners dread: bookkeeping. In a survey of 508 business owners, over half of them ranked accounting and bookkeeping as a particularly draining task and one that they disliked doing. However, proper and accurate accounting is a necessity if your business is to succeed.
For whatever reason, if you decide you don’t want to do the bookkeeping yourself, you have two choices:
- Hire employees to do the work
- Outsource the work
In this article, we will highlight the reasons why outsourcing can be the better option.
Benefits of Using an Outsourced Bookkeeping Service
We will start with the caveat that the firm you choose to do your bookkeeping is a reputable, established firm.
- Broad Experience and Knowledge
Bookkeepers who work for an outsourcing firm have experience with a wide variety of business types, accounting software, and reporting procedures. They’ll know the latest tax codes, allowable deductions, and restrictions that will benefit you at tax time. Outsourcing accounting firms invest in their staff’s training, so they are up to date on the most current processes, so you’ll benefit from that.
You’ll need to ensure that an in-house bookkeeper is current on all accounting software updates, which may require additional training. You will foot the bill for the cost of training. Also, the time the employee spends learning is time spent away from their productive jobs.
- Saves Time and Money
Hiring in-house bookkeepers requires recruiting, vetting, interviewing, background checks, and negotiations before hiring. Once hired, they may require additional training before they are fully productive. An employee requires benefits like insurance, time off, performance reviews, etc., which takes time by you or others. Time translates to money.
Conversely, once you find a trusted accounting firm for outsourcing your bookkeeping, you simply provide the specifications for the job and they’ll assign a consultant who meets the requirements. They will typically hit the ground running within a few days. You can focus on the myriad of other responsibilities you have.
Most accounting firms offer customized service plans, where you only pay for the time and services you need. If your bookkeeping can be accomplished in 20 hours a week, that’s what you pay for. When you hire a full-time bookkeeper as an employee, you don’t have that option.
- Continuous Service
If you have an in-house accountant or bookkeeper, what happens if they fall ill, go on maternity leave? You’ll need to hire a temporary replacement during the absence. That person will take some time to familiarize themselves with your business and books. And if your bookkeeper suddenly quits, you’re left with the daunting task of recruiting, interviewing, and hiring a replacement, which can take weeks, if not months.
When you outsource your bookkeeping, the firm will typically have a backup in place, should the assigned accountant leave the position. The backup can easily step in and take over in a minimal timeframe to keep your bookkeeping process going.
New companies have smaller needs, but as they grow, their needs grow with it. That means the volume and types of bookkeeping tasks can become such that more than one accountant is required. An outsourced service will be able to satisfy that need quickly by assigning additional trained resources.
Once again, if your bookkeeping is done in-house, you’ll need to hire additional employees for the extra functionality or train existing staff accordingly.
Using reputable professional bookkeeping services makes the IRS and other financial institutions happier. Businesses who outsource to these firms have a less chance of getting questioned on the integrity of their financial records.
Whether a business owner needs to provide financial statements to the bank, satisfy investor reviews or share information with the IRS, outsourced bookkeeping services help make sure there is no doubt about the data.
- Security and Privacy
A professional accounting service has rigorous safeguards in place that ensure privacy, confidentiality, and access control. You can rest assured that your data remains secure. There are also backup procedures in place in the event of a system failure so that your information is not lost.
To benefit from the same secure practices with in-house bookkeeping, you’d need to put programs in place to secure your information from vulnerabilities like fire, theft, and hackers.
Get Premium Bookkeeping Services
When you’re ready to outsource your small business bookkeeping, Orcutt & Company can fulfill your needs. We offer customized plans specific to your budget and specifications.