Many small to mid-sized organizations ask the question, should we outsource our bookkeeping? Well, if you were to create a pros and cons list comparing the outsourced bookkeeping model with a traditional in-house bookkeeper, it would look a little like this article. So whether you are considering the two options because you lost personnel and are looking to fill the position, or maybe you have had significant growth, possibly an issue with fraud or inaccurate books; here are the 5 main components you will want to look at: time, software and/or equipment, cost, scalability, and accuracy.
How much time do you or a current staff member spend on bookkeeping? This is one of the most vital components as you can never replace time. Most business owners, in the beginning, tackle this until the business begins to grow, then as time goes the business has grown, but not enough to hire an in-house bookkeeper. Days are spent building the business while nights are spent doing the books. Outsourced bookkeeping allows you to only pay for the services you need when you need them, while you focus on building your business.
- Software or equipment
The cost of additional software and workstations can be a rather large expense to any small business. When going in-house not only are you needing the software and workstation for the team member but now you need to spend on things like payroll, 401K, recruitment fees, a desk a chair and any other office equipment that may be needed. With Outsourced bookkeeping, you have exactly the opposite. You log in to your portal that is provided to you and you and your new bookkeeper work directly on a secure server that the bookkeeping company provides, with no overhead costs.
Costs are huge for a small business owner, and knowing exactly where you are month after month is important. Making business decisions based on guesses will never get you where you want to be. Most business owners are so busy wearing multiple hats that the bookkeeping is rarely up to date, which can get you in debt rather quickly. The costs associated with having an in-house bookkeeper vary dependent on full-time or part-time and whether you are providing things like Medical and dental or a 401K. With outsourced bookkeeping, you save up to 40% of what you would pay keeping it or having it in-house.
Supporting rapid growth or rapid expansion is vital in any healthy organization, and keeping up with the pace can be difficult for a business owner that is trying to deal with all the other aspects that rapid growth brings. Having this function in-house in this kind of scenario, you would certainly need a staff member as the business owner is much too busy to fill this function. Outsourced bookkeeping is already prepared for growth, not only do they already have systems in place they have years of experience so you don’t have to worry if you’re able to catch up or not or if you just ordered tons of stuff you can’t afford for the growth itself.
Inaccurate and incomplete bookkeeping deeply impacts business decisions, the more accurate your bookkeeping is the easier it is to make smarter business decisions. When you try to do too much as a business owner the quality of your work tends to go down as spreading yourself too thin has a whole new meaning once you decided to open a business. Outsourced bookkeeping ensures you have accurate, timely, and complete reports. No more going into the CPA at end of year with inaccurate books, keeping you and your CPA very happy at tax time.
For more information on how you can outsource your bookkeeping today, contact us for a free consultation today!