Every business has faced this difficult choice, to outsource or not to outsource. All business owners should be aware the need for bookkeeping (if not read here) but find it tough deciding on how to bookkeep. Generally, you have three options, do it yourself, hire a bookkeeper, or outsource to a bookkeeping service. Each have their own advantages and disadvantages. It will depend entirely on your business size and structure which option will work best for you. For small to medium businesses however, outsourcing your bookkeeping has some major advantages that the other options simply do not. Here are 12 major advantages for outsourcing your businesses bookkeeping.
The biggest reason, which is why it is first, is money saved. A bookkeeping service is far cheaper than hiring an in-house bookkeeper, it’s a fact. A bookkeeper will set you back less than the wages you would normally have to pay for an in-house bookkeeper. Not only that but for less than the price of one bookkeeper you get an entire team of bookkeepers working to ensure that your business’s financials are well looked after. Yes, it is more expensive than if you just went and did it yourself, but this is where you get into reason 2.
More time to focus on your business
So, you have been going it alone on your bookkeeping for a while, your business was just you and one other employee after all, but now you have grown immensely since it all began. You have far more clients who not only love your business but want more from it! Unfortunately, as it stands there is only so much you can do. Every moment is spent on your current workload, and you do not have quite enough overhead for more staff to ease that pressure. But you really want to expand and offer new services! So, what can you do? Hire a bookkeeping service. This will take all of that bookkeeping work that you have been struggling to keep up with out of your hands. Now you have more time to expand into that new service for your clients, or you can use that time to streamline other aspects of your business. Essentially, you get more time to just focus on your business instead of worrying about getting the day to day bookkeeping completed.
More time away from working
Maybe you don’t want to expand your business quite yet, but you find that you are working way too much. You are overworked and stressed. Family or other hobbies have been pushed aside for your business. If this is you, now may be the time to lighten your load. By hiring a bookkeeping service, you can reduce your workload without needing to pay for a new employee. You can spend that time with your family and friends, or just kick back and watch more Netflix, knowing that your bookkeeping is being looked after.
It is simply a fact that a team of professional bookkeepers, with years of experience and training, equipped with the best tools, will be more efficient and accurate when it comes to bookkeeping. While you may be comfortable with your current set-up you may not realise that you are actually missing out on the timeliness, efficiency and accuracy that only the right training and procedures can provide. A professional bookkeeping service will have years of experience and have developed processes and procedures for different types of businesses. These processes and procedures could help your business avoid errors even as your business rapidly grows.
Data stored offsite on secure cloud services designed for bookkeeping is far more secure than paper or a single computer at your business. If your business is broken into and that computer is stolen, then you lose all your bookkeeping. Or, if there is a fire and it destroys your paper copies, then you lose all your bookkeeping. A professional bookkeeping service will have access to the best bookkeeping technology that allows them to securely store all your data off-site in a cloud service. This way your data is not in one place making it safe and secure if anything were to happen.
An expert opinion
A bookkeeping service will be filled with highly trained professional bookkeepers who have years of experience. They will be able to expertly analyse your finances and offer their opinion on your finances. Say you need to do some cutbacks, they will know the ins and outs of your finances and know exactly what you could cut back on. This type of advice could be invaluable in times of slow business.
With all of its resources available for your business, a professional bookkeeping service will be able to provide you a quality service within a specific deadline. They will also ensure that you know what exact services they can provide, and the costs involved. The work will be done transparently for you so that you are never left out of the loop.
Access to better technology
A good bookkeeping service will have access to the best technology, like Xero, allowing them to efficiently and accurately complete your bookkeeping. Software like Xero has many advantages that you may miss out on if you were to hire an in-house bookkeeper or go it alone. These features could help streamline your entire business with easy invoicing and inventory management, and even project management features. On top of this all your data will be securely saved on the cloud providing you with security and a great bonus feature, mobile access. You will be able to keep track of all of your business’s financials easily, and on the go. Access to technology like this may be too expensive for your business alone, so by hiring a bookkeeper you gain access to all these features through their service.
Less risk from suddenly losing employees
It is a fact of life for any business that sometimes you unexpectantly lose an employee. Maybe they have found a new job or have moved further away. There are many reasons why your employees may leave suddenly. But imagine if this employee was your in-house bookkeeper. That could have devastating effects on your business. You will have to very quickly find a replacement then train them up on your business’s procedures while still juggling your normal tasks. By hiring a professional bookkeeping service this issue is almost completely negated. If there is a problem, then any good bookkeeping service will notify you and help you transfer to a new service.
Yes, a bookkeeper is a must have. They will provide you with insights into your finances that you may never have had before. A bookkeeper can provide you advice, help manage unforeseen costs and help plan your year ahead. However, an in-house team creates an immovable set of wages that can limit the flexibility of your business to expand or contract. By outsourcing your bookkeeping, you can freely scale your business without having to worry about a large chunk of wages taking up your business’s finances. If you are going it alone with bookkeeping, then a service can help you make sense of complicated rules regarding payroll and taxes as your business expands and takes on more employees.
Pay less for overheads
With a bookkeeping service you can eliminate the need to pay for the overheads required for an in-house employee. Say goodbye to payroll taxes, vacation pay, superannuation, sick leave, and more for your bookkeeping team. Instead just pay for the work done for your business, nothing more.
Bookkeepers are great at helping you increase your profitability. By outsourcing your bookkeeping you will be able to find a greater degree of profitability that is not being swallowed up by in-house bookkeeper’s wages. This could be a fantastic bonus if you want to sell your business or if you need to raise borrowed capital. A higher valuation can help you get better terms.
An outsourced bookkeeping service offers immense benefits for any business. While doing your own bookkeeping may be a good option when your business is just starting out it will begin to become increasingly complex as you grow. It may be tempting then to just hire an in-house accountant or bookkeeper but the inflexibility and the low benefits to cost ratio make it a risky choice. To get the benefits of a full team of bookkeepers without the cost of going in-house look at hiring a good outsourced bookkeeping service. What benefits have you seen from your outsourced bookkeepers?
Looking to outsource your bookkeeping? Contact Link Strategies today.