When starting or growing a business, a long list of tasks awaits you every day. Some of those tasks may be within your realm of expertise whereas others are complete unknowns. That means your schedule is a balancing act as you handle familiar work along with learning what you don't know, and if your budget doesn't allow you to hire full- or part-time help, you might be doing everything yourself. Bookkeeping, however, is one important task you can outsource and not break the bank.
What Are Outsourced Bookkeeping Services?
Outsourced bookkeeping means an outside company manages your business's bookkeeping tasks. These companies offer a full range of bookkeeping services with access to a team of experts in all areas of bookkeeping and accounting. Business owners choose the services that fit their current needs with the option to scale quickly, as needed.
4 Reasons to Use Outsourced Bookkeeping Services from the Start
Many new businesses don't realize the importance of bookkeeping until tax time rolls around. Or they don't think they can afford a bookkeeper, and they're unaware of the outsourcing option. There are many reasons to work with an outsourced bookkeeping firm from the beginning, and many affordable options exist that add value for all types and sizes of businesses.
1. Get the Skills of More Than One Bookkeeper
A common alternative that many businesses choose is to hire a part-time or freelance bookkeeper. With good bookkeepers in high demand, this might mean hiring someone who is inexperienced or has limited areas of expertise. Even if a business can find a great bookkeeper who wants to work limited hours, there's a risk of that person leaving and the business not having anyone to step in.
Outsourced bookkeeping companies offer a wide range of services including payroll, accounts receivable, accounts payable, financial reporting, forecasting, and more. While each business owner may have a dedicated account representative to talk to, experts often work in different areas behind the scenes to make sure everything is running smoothly.
2. Have the Flexibility to Scale As Needed
One challenge with traditional hiring is timing it to match business needs. This is especially true for new businesses experiencing rapid growth. A business might need bookkeeping tasks completed well before it can afford even a part-time bookkeeper. Then, with early growth, a part-time bookkeeper might become overworked before the business can afford to change the position to full-time. As the business expands, there's also a chance that the position will outgrow the current bookkeeper's skills.
Outsourced bookkeeping is a just-in-time service. Many businesses start with a simple package that includes automated software functions and limited guidance. When the business needs more advanced payroll, invoicing, or other services, it can add them by simply picking up the phone. As the business's needs grow even more complex, it can also add outsourced accounting and CFO services.
3. Get Full-Time Access Without the Full-Time Cost
Many times, a business owner or manager needs an answer on the spot. A customer might call about an invoice, or there might be a meeting about an important business decision that needs the latest accounting data. With a part-time or freelance bookkeeper, the business might have to wait until their next office hours or at least until they finish working with other clients. These delays can create a poor customer experience, hold up other important work, or force other people to work longer to cover bookkeeping tasks.
Outsourced bookkeeping companies offer full-time support during business hours. An option for extended hours of service may also be available. In many cases, making quick phone calls or requesting reports is included in the monthly service package. Plus, some unique needs may have an additional cost based on the value provided, but businesses have the peace of mind knowing they can quickly add additional services at already defined rates.
4. Be Ready for Tax Season
Many people have a hard enough time doing their personal taxes. This is true even when they just need a W-2, a 1099-INT from their bank, and a few receipts for possible itemized deductions. Business taxes are more complicated since specific rules apply to different types of income and expenses. Businesses frequently have earlier tax deadlines because they need to report money paid to employees, owners, and others in time for those people to file their own tax returns.
Keeping all receipts, recording all transactions, and saving all bank statements is a good start, but it's not enough for filing a business tax return. In fact, since properly categorizing transactions is so important, bookkeepers without tax knowledge can sometimes make things even harder if they inadvertently create a system that doesn't match tax needs.
Outsourced bookkeeping services have tax experts on their team. Even if a business doesn't request tax-specific services, they get the benefit of having all other bookkeeping services designed to meet their tax needs.
Grow Your Business with the Help of AccountingDepartment.com
AccountingDepartment.com provides scalable solutions for growing businesses. We offer a full range of accounting, bookkeeping, and controller services to small and mid-sized businesses. While you're out running your business, we're working behind the scenes to keep your accounting and bookkeeping on track. Contact us now to request a free consultation and learn more about how we can help your business.