Outsourcing Bookkeeping – How can it be Extremely Beneficial?
Bookkeeping is perhaps the most unpopular administrative jobs for a small business owner. Naturally, it’s pushed aside and goes on getting piled up. And though bookkeeping is a sheer bore, it’s very important for your accountant as without it, s/he cannot do their accounting job. This situation results in either of the two – you will have to pay high hourly rates to your accountant to do the job or you will have no financial statements. Both of these are not-so-good ideas. But you can overcome this situation when you have someone offering outsource bookkeeping services.
Bookkeeping is Different than Accounting
Unlike many people may think, bookkeeping is different than accounting. It prepares all the information which the accountant needs to prepare financial statement and interpret them. It contains jobs like recording the daily transactions in the business, like sales, purchases, expenses and revenues. It also consists of writing checks, making deposits and resolving bank statements. All this information then goes to the accountant.
Benefits of Outsourcing Bookkeeping
Bookkeeping being a boring job, most business owners want to hand it over to someone else and not look at it till March or April. In such a case, internet is a great availability to make the job of outsourcing easy like never before. There are some distinct advantages of outsourcing bookkeeping.
You Get More Time
It’s obvious that when you hand over a task like bookkeeping to someone else, you get more free time to do your other business activities. Back office functions can become a major distraction from the daily operations in business and having in-house bookkeeping can give rise to conflicts of interests. All these distractions and time-wasters should go out of your sight and mind which the outsourcing does.
You Save Money
When you outsource bookkeeping tasks, you obviously save money on part-time or fulltime wages and advantages to an employee. Significant productivity costs associated with hiring people on payroll are also saved. With outsourcing bookkeeping, you just pay for what you need, not a penny more, not a penny less.
You can Have the Right Expertise
Outsourcing opens up a great way for you to have fulltime expertise with you without having to pay for it constantly. By giving your books to highly skilled people who have the best practice, experience and knowledge of how to staff certain tasks properly and your job becomes so easier and also effective.
Staff with a Focus
Places that accept bookkeeping jobs eliminate the distractions from their job in the office and therefore are able to provide their clients a more focused work. Bookkeeping is a task which is quite difficult to perform in the hustle-bustle of a business. Outsourcing eliminates this hustle-bustle so that the bookkeeping task and your business are performed with an increased focus.
Power of Teamwork
By outsourcing the job of bookkeeping, you hand over your books to people that work more efficiently with teamwork. It’s a common observation that a single bookkeeper has no ability to find any subtle nuance that can be advantageous to your business. However, when you outsource, you get a team of employees and managers who check and double check work of each other, and thereby ensure to give you the best service possible. This also segregates duties well, which means purchasing and HR are accountable individually for customer care and credit services. When your sections run smoothly, they together produce a far better and more unified team.
Top Tools at Your Service
By handing over the bookkeeping job to experts, you get top tools in the industry at your service. Most companies are not in a position to pay for sophisticated bookkeeping programs neither can they spend the time to keep up with the ever-changing rules and regulations. Outsource companies have all these tools and knowledge as this is their job. When you outsource the job, you indirectly purchase these tools as well as knowledge and the best part is you don’t pay separately for them neither have you to do any work. In addition, these top tools produce nightly backups and keep books and records organized for years, thus ensuring that if at all the IRS drops in summoning for an audit, you are prepared well for them.
One of the biggest benefits of outsourcing bookkeeping is you can cutback or expand your operations within no time. Whether you want to cut down your expenses or grow a certain branch of your business, you have a dependable team at hand, giving you various plans and alternatives, thereby helping you in achieving your goals. This flexibility is provided only by outsourcing and not by in-house bookkeeping staff.
Factors to Consider while Outsourcing
You need to consider 2 factors while outsourcing your bookkeeping job.
- Choosing the Right Provider: While choosing your provider, you should ensure that the company has the required skills, like managing accounts payables and receivables, making and updating journal entries, restructuring bank statements and processing payroll. In addition, you also have to check whether they are good at problem-solving and communication. These will help in checking inconsistencies and producing reports. Having a professional membership and certification is a plus because they prove their professional status. If you choose to hire a candidate depending upon work background, keep in mind to check whether s/he has an industry-specific experience since bookkeeping methods vary from industry to industry. So, an individual or a company having a bookkeeping experience specific to your industry is always a better choice.
- Cost: As told earlier, you can save by outsourcing bookkeeping. To fulfill this purpose, you should ensure that the rates they are quoting meet your needs. However, you should also remember not to make any decision based solely on cost factor. You should take into consideration that it’s going to save your money you could have to spend on salaries and also buying office furniture and other equipment like computer and more.
Remember not to jump on a provider quoting the lowest price. Ensure first that they have all the above-mentioned qualifications necessary to do your job. First check their efficiency and then check the price.