Small businesses, especially start-ups, face all sorts of challenges, and one of the biggest is keeping track of financial information.
Unless you have someone with a strong bookkeeping or accounting background on your key management team, you’ll likely be delegating bookkeeping services to someone who may not be as experienced or trying to do it yourself.
This approach has two big risks associated with it: jumping into the role of a bookkeeper takes time away from other primary tasks and duties that are likely related to core operations, such as building customers and fulfilling orders. Then, no matter how good someone’s intentions are and their willingness to learn complex bookkeeping processes on the spot or even try to wing it a bit, this could be risky for overall solvency.
A “just until we find someone” bookkeeper may not be the solution you are looking for either. They could miss important deadlines or not even know what processes to follow to get things done for the business. They may not be able to provide an accurate picture of current finances or future debits and credits, which leads to a misinformed business owner.
So, what can be done? Traditionally, companies are encouraged to hire someone with these skills pretty quickly. But an emerging trend is to outsource bookkeeping services, as you would other contractors and vendors.
This approach has some advantages:
Less overhead. You won’t need an office for this person or to put them on the payroll as an employee. It’s common for outsourced bookkeepers to charge by the hour or by the task, and either one is a decent deal if you’re not at the point where you need these services full-time.
No software subscriptions. A big cost of companies trying to do it all themselves is buying QuickBooks or more advanced bookkeeping programs. Then there’s often a learning curve if you’re not familiar with a program’s features. A professional bookkeeping service will already have these tools and know how to use them.
Neutral/outside view. Having someone professional outside the company monitoring finances isn’t a bad idea. They won’t have any loyalties or personal relationships with anyone in the company. They won’t show favoritism.
Familiarity with business needs and common best practices. They may not necessarily be familiar with your specific industry, but they will know about different ways to save money and what can and can’t be properly deducted for business purposes.
Additional help when tax season approaches. Day-to-day accounting is vital, but extra assistance is invaluable when it’s time to gather info to file taxes, whether this is done quarterly or annually.
More time for other critical tasks. Not having to take time for financials on a daily or at least a weekly basis can make more time for other duties, especially ones more suited to someone’s skills. A virtual bookkeeper should still be responsive and reachable throughout the day if anyone has financial questions, but generally, they can focus on their job so you and your team can focus on theirs.
Handles miscellaneous tasks. Do clients owe you money? Do you owe another business money? Are you seeking investors sooner rather than later? These are all important topics to consider, and they are all tasks that outside bookkeepers can help with, including reconciling statements and invoices. This saves you and your staff time and makes sure all balances are up to date.
Better books. Whether you’re checking on cash flow or you’re putting financial information together for possible investors, having properly arranged books will be a positive reflection on you and your company.
Overall, virtual bookkeeping services can be a useful way to keep financial data current and accurate, and also free up company executives to focus on tasks more suited to their skills. To learn more about how outsourced accounting and bookkeeping services can benefit your business, reach out to AccountingDepartment.com today.