Do You Outsource Bookkeeping for Your Small Business?

Running a small business involves juggling multiple tasks and wearing many hats. And since it’s your business, it can be hard to offload tasks, especially where something as important as finances is concerned.

However, you can’t do everything. And nor should you be expected to. 

Chances are, you started a business because you’re passionate about whatever it is you sell or do. And unless you’re a financial expert, we’re betting that you’re neither qualified nor passionate about bookkeeping.

The thing is, if you’re tied up trying to deal with the books, then you have less time to run your business. And if you’re not experienced with bookkeeping, then that’s when the mistakes happen. 

This is where outsourcing bookkeeping services can be a game-changer. By entrusting your bookkeeping tasks to an outsourced bookkeeping service provider, you can ensure the accuracy and efficiency of your financial information while freeing up valuable time to focus on growing your business. 

In this article, we will take a deep dive into the benefits of outsourced bookkeeping services for small businesses, why you should have them for your business, and what the future of bookkeeping holds.

What Is Outsourcing Bookkeeping?

An outsourced bookkeeping service involves hiring a third-party service provider to handle your business’s financial transactions, record-keeping, and reporting. Instead of managing these tasks internally or by yourself, you delegate them to a professional who specializes in bookkeeping services. 

It’s important to understand that when you outsource a bookkeeper, you are not employing them directly. Instead, you enter into a contract that determines the level of service you receive. 

Additionally, a bookkeeping outsourcing company will typically provide a professional on a remote basis, meaning they will not be present on your business premises when they are working on your books.

One crucial point to keep in mind is that a bookkeeper is not an accountant. Sure, they can perform some accounting activities, but they are not qualified to provide advice, develop strategies, or make recommendations for financial decisions. That’s what an accountant does.

Why Is It Beneficial for Your Small Business?

Outsourcing bookkeeping presents several advantages. 

First of all, it allows you to tap into the expertise of professionals who possess a deep understanding of accounting principles and best practices. They can ensure the accuracy, completeness, and timeliness of your financial records, which is crucial for making informed business decisions and meeting legal requirements. 

Without this expertise, you run a significant risk of making an error and not remaining compliant with tax laws. Something we’re sure you would prefer to avoid.

Additionally, outsourcing bookkeeping services can help you streamline your operations. By leveraging specialized software and outsource bookkeeping solutions, repetitive tasks can be automated, saving you time and money plus reducing the risk of errors, and increasing efficiency. 

Automation goes a long way toward providing you with real-time, up-to-date access to financial data, enabling you to make proactive decisions about your business and where to take it.

What Services Should You Consider When Outsourcing Bookkeeping?

Outsourcing bookkeeping services requires a few careful considerations.  Depending on the type of business you run, you may not need everything that a bookkeeper can provide. Ultimately, you don’t want to end up paying for services you don’t require.

Assess your business’s specific needs and find a service provider that offers comprehensive solutions that match them. Some key services to consider include:

  • Accounts payable and receivable management
  • Bank and credit card reconciliation
  • Payroll processing and compliance
  • Financial statement preparation
  • Tax preparation and filing assistance
  • Budgeting and forecasting
  • Financial analysis and reporting
  • Cash flow management

What Are Tips To Ensure the Safety and Accuracy of Your Financial Information?

The safety and accuracy of your financial information is a top priority. Entrusting this information to a third party doesn’t come without its own unique set of risks. Therefore, when considering bookkeeping services outsourcing, ensure you do the following:

  • Choose a reputable bookkeeping service with a proven track record and positive customer reviews
  • Ensure that your bookkeeper uses secure and proper software along with solid encryption protocols to protect your data
  • Establish clear – and private – communication channels between you and your bookkeeper
  • Conduct periodic audits and reviews of the bookkeeping processes to identify any potential issues and areas where improvements could be made
  • Implement internal controls and access restrictions to limit unauthorized access to sensitive financial information

What Are the Pros of Hiring a Professional Bookkeeper vs. Doing It Yourself?

We’ve already touched on why outsourced bookkeeping for accountants is beneficial but let’s look a little deeper into the topic.

Greater Accuracy and Efficiency in Managing Financial Information

Professional bookkeepers possess the expertise and experience to ensure accurate and error-free financial records. They know what they are doing, and they know how to use relevant software to ensure they get the job done error-free and more efficiently.

Simplified Tax Compliance

Taxes are a conundrum for most people. But bookkeepers are well-versed in tax laws and regulations, thus enabling them to help you navigate the complexities of tax compliance. 

What this does is minimize any liabilities for your business and help you avoid penalties.

Another surprising perk is that bookkeepers will be more familiar with any tax breaks you may be entitled to. We don’t know any business that wouldn’t appreciate an extra way or two to save money.

Saving Time To Focus on the Core Business

Remember that passion? It’s hard to stay focused on it when you’re cooking the books. It saps your energy and leaves you with little time to concentrate on what you do best. How can you expect your business to grow if you’re snarled up in budgets and invoices? 

An outsourced bookkeeper will remove a hefty task from your hands, freeing up a significant amount of time that you can now devote to the core of your business.

Improved Cash Flow Projections and Budgeting

You can’t budget efficiently if you don’t know how much money you have to begin with. Bookkeepers provide valuable insights into your cash flow patterns, enabling you to understand where your business stands financially and make informed decisions about what you should do.

Updated Record-Keeping System That Meets Industry Standards

Bookkeepers employ industry-standard practices and tools to maintain your financial records. 

It’s no longer good enough to jot everything down in a leather-bound book. You need backup copies, digital records, and more. It’s a lot to keep track of without specialized bookkeeping software. 

Furthermore, the use of proper practices and tools ensures ongoing compliance and ensures you pass an audit with flying colors.

Access to Expert Guidance for Financial Decisions

Remember, bookkeepers are not accountants, so their assistance is limited in this area. However, bookkeepers can offer valuable insight into the current health of your business and how much liquidity you have. This information will help you make informed decisions regarding investments, expansion plans, and cost-cutting measures.

How Much Does It Cost To Outsource Your Bookkeeper?

Not as much as you think!

Unlike employing someone, hiring an outsourced bookkeeper means you don’t have to pay them for time off, benefits, sickness, or anything else that comes with hiring someone.

Reputable outsourced bookkeepers such as our good selves at EvolveCFO have affordable price plans starting from $299/month that are designed to suit growing small business needs. Additionally, you can customize these plans by choosing to add on extra services as and when required.

This gives you access to the bookkeeping services you so desperately need at a much more affordable price point.

Where To Find a Reliable Bookkeeper Online?

Finding a reliable bookkeeper online can be a straightforward process if you know where to look. Here are a few reliable sources to consider:

  • Online marketplaces: Platforms like Upwork, Freelancer, and Fiverr allow you to browse profiles, read reviews, and hire bookkeepers with specialized skills
  • Dedicated bookkeeping services: Companies like EvolveCFO provide professional bookkeeping services specifically tailored to small businesses
  • Recommendations and referrals: Seek recommendations from other business owners or industry professionals who have had positive experiences with bookkeeping services

Why Is Outsourcing Your Bookkeeper So Popular?

Gone are the days when we had to go through an entire hiring process to get the professional expertise necessary to run a business. It’s expensive, time-consuming, and often unnecessary, especially if you don’t need a full-time hire.

Outsourcing is fast and easy and removes the need to hire someone in-house. And with cloud-based technology and automation, it’s never been simpler to work with someone on a remote or virtual basis.

What Are Current Trends in Virtual Bookkeeping?

Virtual bookkeeping has undergone significant advancements in recent years This has been largely driven by technology advancements and changing business dynamics. 

Cloud-Based Solutions

Cloud computing has revolutionized the way bookkeeping is done. Specialized software, such as QuickBooks Online and Xero, allows bookkeepers to access and manage financial data from anywhere at any time. 

This trend enables real-time collaboration, seamless data integration, and improved efficiency across the board.

Automation and AI

Artificial intelligence (AI) is everywhere right now, and bookkeeping is no exception.

AI can now efficiently perform routine tasks like data entry, bank reconciliations, and invoice processing. Having the ability to set these things on autopilot is understandably extremely appealing for business owners.

Additionally, AI-powered algorithms can analyze financial data to identify patterns, anomalies, and potential risks, providing you with valuable insights for important decision-making.

Virtual Collaboration

Remote collaboration between bookkeepers and clients is essential for outsourced bookkeeping to work properly. With video conferencing, screen sharing, and secure file-sharing platforms, bookkeepers can communicate effectively with their clients, thus fostering flexibility and enhancing client-provider relationships.