If you run a business, you know that bookkeeping isn’t just a back-office task. It’s the backbone of your financial health.
Without accurate records, you’re flying blind. You can’t track cash flow, plan for growth, or make smart decisions about where to invest your money.
But if you’ve ever tried to juggle bookkeeping along with everything else, you know it’s not exactly a simple task. It’s time-consuming, detail-oriented, and a little too easy to push to the bottom of the to-do list.
Instead of spending hours each month wrestling with spreadsheets or scrambling to make sense of your expenses, you can hand it off to outsourced bookkeeping services. This doesn’t just free up your time. It also gives you access to expert financial insights without the overhead of a full-time hire.
PR Newswire even revealed that the least favourite part of running a business is bookkeeping and taxes. Around 4 in 10 small business ownersadmit it’s the absolute worst. Clearly, there’s room for improvement.
What we’re going to do here is take a good look at outsourced bookkeeping. We’ll explain the main perks and talk about how you can figure out who the best provider would be for your business.
- What Exactly is Outsourced Bookkeeping?
- An Overview of Virtual Bookkeeping
- 8 Key Benefits of Outsourced Bookkeeping
- Is Outsourced Bookkeeping Right for Your Business?
- Working with the Right Bookkeeping Outsourcing Provider
- I Have an Accountant: Isn’t That the Same as Bookkeeping?
- FAQs
What Exactly is Outsourced Bookkeeping?
Outsourced bookkeepingis exactly what it sounds like. Instead of managing your financial records in-house, you hire an external firmor freelancer to handle them for you.
They take care of everything from recording transactions to reconciling accounts and preparing financial statements.
The main advantage here is that you’re not just getting a number-cruncher. You’re teaming up with someone who can actually give you smart financial advice, spot any cash flow hiccups early on, and help you stay on the right side of tax laws.
This can be super helpful, especially if you or your team aren’t financial whizzes. Or if you’d rather spend your time in growing the business instead of wrestling with the books.
An Overview of Virtual Bookkeeping
Virtual bookkeeping is like a specific type of outsourced bookkeeping. You’re still passing off those financial tasks to someone else, but it all happens online.
Instead of meeting face-to-face, you’d share documents, receipts, and reports through secure online platforms or cloud software.
This works great if you like having your financial info accessible anytime, anywhere, without needing to schedule in-person meetings. It’s also a good fit if you’re already using online tools like Xero, QuickBooks, or MYOB.
The main difference is that virtual bookkeepers can be based anywhere, which can make it a flexible and cost-effective choice for businesses of all sizes.
8 Key Benefits of Outsourced Bookkeeping
Why are more and more businesses ditching the in-house ledger and going with outsourced bookkeepers? Let’s take a look at some pretty compelling reasons:
1. Save on Spending
Having someone on your team full-time to handle the books can cost a pretty penny. Going with outsourcing can often be a lot cheaper because you pay for a packaged service.
Genius even reported that outsourcing can let your business save up to 84%on accounting costs by going this route.
2. More Time for Core Activities
Bookkeeping’s gotta get done, but it’s probably not what you got into business to do. Handing those tasks offfrees up your time to actually improve and grow your company.
Whether that means making your product better, getting the word out, and keeping your customers happy.
2. Getting the Expert Eye
When you outsource, you’re getting access to a whole team of people or a professional who really knows their way around the latest financial rules, taxes, and best practices.
You’d team up specialists who can give you insights that go beyond just making sure the numbers add up. They’d also be helping you make better decisions with your money.
3. Growing Smoothly
As your business starts taking off, things can get a bit more complex financially, right? The cool thing about outsourcing bookkeeping is that it can grow right along with you.
You can easily bump up the support you’re getting (or even scale it down if things change) without going through the whole rigmarole of constantly hiring and training new people.
4. Fewer Errors, Less Risk
Mistakes in your financials can be a real headache, leading to tax penalties or missed opportunities. Dedicated, professional bookkeepers have the experience and the right systems to keep things accurate and reduce those risks.
5. Keeping an Eye on the Cash
Cash flow is what keeps your business going. A good outsourced bookkeeper can help you watch it closely, set budgets, and spot any potential problems before they become a crisis.
6. Clearer Financial Picture
Having accurate and up-to-date financial reports is key to making good decisions. Outsourced bookkeepers give you detailed reports that help you see how your business is doing and plan for what’s next.
7. Less Stress, More Focus
Finally, there’s just a good feeling that comes with knowing your finances are in capable hands.
You don’t have to sweat the deadlines, tax errors, or compliance stuff. You can just focus on doing what you do best, knowing your financials are sorted.
Is Outsourced Bookkeeping Right for Your Business?
Outsourcing bookkeeping can be a pretty smart option for all sorts of businesses, big or small. But it’s worth saying it’s not always the ideal path for every single one.
Here are a few clues that it might be time to think about outsourcing:
- You’re spending way too much time on financial admin– If you’re always stuck in spreadsheets or using your downtime for invoices, that’s a sign. Your time’s better spent on the bigger picture.
- Your books are a hot mess– If your financial records are all over the place, incomplete, or never up-to-date, getting a pro involved can really help. It avoids headaches and makes tax seasonway less scary.
- Cash flow is a constant worry– Do you feel like you’re always getting blindsided by money problems or struggling to make ends meet? Getting an outsourced bookkeeper on board can really give you a clearer picture and help you plan better.
- You’re missing chances to grow– Finding yourself too swamped with the everyday finances to think about growing? Delegating can free up your time to make those smarter decisions that help your business take off.
- You’re stressed about keeping things legal and compliant– And if you ever get that knot in your stomach worrying about keeping everything legal and compliant with taxes and all that, outsourcing can lift that weight right off your shoulders.
- You’re looking to grow– Finally, if your business is growing and the finances are starting to feel like a handful, outsourcing gives you the room to expand.
Working with the Right Bookkeeping Outsourcing Provider
When you’re looking for the right outsourced bookkeeping fit, here’s what to keep in mind:
- Industry Savvy – Do they get businesses like yours? Look for experience in your specific field for a smoother understanding of your financial quirks.
- Service Breadth – Can they handle what you need? From basic record-keeping to payroll or financial reporting, ensure they offer the services you’re after now and might need later.
- Tech Know-How – Are they using the latest accounting software that works with your current systems (or is an upgrade)? Efficiency often comes with the right tech.
- Clear Communication – Will they keep you in the loop? Look for responsiveness and a clear process for updates and answering your questions.
- Solid Security – How seriously do they take your financial data’s safety? Check for their security measures and data protection policies.
- Transparent Pricing – Do you understand what you’re paying for? Look for clear and predictable pricing structures.
- Good Reputation – What do others say? Check online reviews and ask for references to gauge their reliability and service quality.
I Have an Accountant: Isn’t That the Same as Bookkeeping?
If you’re wondering if your accountant can handle your bookkeeping, then technically, yes. But if you’re looking at the long game, it can end up costing you a fair bit.
Many accountants will either take care of your regular bookkeeping as part of what they do, or they’ll get you squared away when tax season rolls around.
The thing to keep in mind, though, is that a Certified Public Accountant (CPA)charges a higher hourly rate compared to someone who focuses just on bookkeeping. That’s because they’ve put in a lot of work to get their qualifications and accreditations
So, while your accountant canlikely do your bookkeeping, it’s worth thinking about the cost of paying a full price for routine financial work.
So, looking at outsourced bookkeeping, where you often work with really experienced bookkeepers, could be a much smarter way to manage your finances.
FAQs
What does an outsourced bookkeeper do?
Think of an outsourced bookkeeper as your off-site financial organiser. They basically handle the same things as an in-house bookkeeper, but they bring with them the benefits of outsourcing.
How much does an outsourced bookkeeper cost?
That really depends on a few things. Like how much work you need to get done and how experienced the bookkeeper is. You might find some charging by the hour, others with a fixed monthly fee.
But generally, outsourcing can be more affordable than hiring someone full-time.
What’s the difference between outsourced accounting and bookkeeping?
Bookkeeping is the daily recording of all your financial comings and goings. Outsourced accounting, on the other hand, is more big-picture.
Accountants usually do things like prepare your taxes, give you financial advice, and help with strategic planning.
So, bookkeeping is about keeping track of what happened, and accounting is more about analysing it and planning for the future.