Outsourcing bookkeeping services can be a great way to save time on the tedious tasks of accounting. It can also help you keep your finances in order and provide you with more free time to focus on other aspects of your business.
Outsourcing bookkeeping services can help you save time by taking care of the tedious tasks of accounting. It can also help you keep your finances in order and provide you with more free time to focus on other aspects of your business.
The bookkeeping or accounting element of a business can be both time-consuming and very challenging for business owners. However, there are plenty of options when it comes to outsourced bookkeeping and accounting partners to make the best use of your time and resources for this complex part of your business.
Outsourced bookkeeping and outsourced accounting is becoming increasingly popular, even for businesses with a finance department. According to Fortunly, 71% of financial service executives outsource or offshore some of their services.
Which one a business chooses is largely dependent on the scope of the work to be carried out and the qualifications required to carry out that work. There are some business owners who are qualified accountants, but they are the exception. For everybody else, they have to either spend (precious) time figuring it out themselves – that takes them away from some other part of the business – or they get help.
There is no clear-cut answer as to whether particular tasks will be completed at a lower cost in-house or through outsourcing. There are plenty of options and reasons why more and more businesses are turning to outsourced bookkeeping and accounting partners for help.
For example, the qualifications of the in-house staff is one of the major factors in the equation. The availability of in-house staff members to do accounting and bookkeeping work is another serious consideration here. If there are members of in-house staff members capable of completing the task and available to do so, it may be an option keep the work in-house. However, outsourcing bookkeeping and accounting does reduce labour costs and staffing headaches for the business owner. While there are many different scenarios in which part or all of your accounting work could be outsourced, below we discuss the amain choices when it comes to choosing your bookkeeping and accounting outsourced partners.
Table of Contents
Using and External Outsourced Bookkeeper for your business?
In the first scenario we look at hiring a outsourced bookkeeper working specifically for your business.
Benefits
The main benefits of this type of situation is that you can calculate your costs in advance because you will know the bookkeeper’s rate per hour.
What you get for your money here is a bookkeeper with a professional qualification that says they are competent to carry out your bookkeeping tasks.
The rate per hour can also be seen as a disadvantage as the more hours they spend on your books, the more you are going to be charged.
Drawbacks
The qualifications they hold may only give them a limited understanding of detailed accounting concepts which may not be enough if your business is complex. Generally, an external bookkeeper will have no ability to provide either business advice and that above all should be remembered. Seek professional advice from somebody who is suitably qualified. All books and records will be updated on a timely basis by the person but they don’t provide any financial performance information. Your business will have to incur further costs to hire an accountant to manage compliance issues.
Maybe you should consider an Accounting Firm (quarterly / annually)?
This was the most popular form of dealing with a businesses’ accounts until recent years and it had some merit and some benefits to doing the accounts either annually or quarterly (depending on the size of the business).
Benefits
The main benefit for a business owner from using this type of service compared to using an External Bookkeeper is that you have access to professional accounting expertise. An accountant will also provide financial performance information on a regular basis again that will be dependent on your business requirements. And like the External Bookkeeper, you will have a pre-agreed rate per hour or an agreed annual fee.
Drawbacks
However, financial information is not real time, it is always historic information so finding out how you did last year rather than last week is not suitable for some businesses. Cloud accounting tends to be “add on” service for accounting firms like these rather than their core focus. Because the information has a time lag, accounting firms often focused on tax and compliance while lacking the skills to support growing businesses with real-time information.
For any business considering outsourced bookkeeping, don’t be afraid to ask for references from existing customers.
10 Signs It’s Time To Hire An Outside Accountant For Your Small Business
Hiring an outside accountant for your small business can be a wise decision. If you are not confident in your accounting skills, hiring an outside accountant can help you prevent some of the most common mistakes that small business owners make.
Here are 10 signs it’s time to hire an outside accountant for your small business:
1) You’re not confident in your own accounting skills.
2) You have a large number of employees with complicated payroll needs.
3) You’re going to be audited and need more than just bookkeeping services.
4) You want to grow but don’t know how to handle the complexity that comes with growth.
5) Your company is doing well and you want to take on more ventures but don’t know how to manage them all at once.
6) You want to start a new business but don’t know how to manage the accounting for it.
7) You’ve been going to events and you have a lot of small business owners you really like and want to learn from.
8) You’re struggling with managing finances.
9) Your business is going well but you’d like some professional advice on how to proceed with better financial management.
10) The Revenue has contacted you directly about your business finances and you need to review it.
Book A Free Consultation
Are you looking for proffesional help? aperio is a Cork-based outsourced accounting and consulting company that can take care of all your company formation, bookkeeping, management accounting, financial compliance, and financial project work such as grant applications.