When you’re ready to outsource your bookkeeping, it can be an attractive option. What can you expect a bookkeeper to actually do for you? How much will a bookkeeping service cost? How much can you save just using bookkeeping software alone?
This article discusses: How to figure out the best bookkeeping solution for your business.
- The advantages of outsourcing bookkeeping as opposed to using bookkeeping software or hiring a bookkeeper in-house
- A bookkeeping service covers what tasks
- Outsourcing your books how the process actually works
- How much does quality outsourced bookkeeping cost?
We will cover everything you need to know about outsourcing your bookkeeping.
Does Your Bookkeeping Need to Be Outsourced?
The benefits of moving bookkeeping off your plate are obvious if you’ve already made the decision. For starters:
- You get to concentrate on growing the company instead of spending time and patience on it.
- When you leave it to a professional, you don’t need to worry about inaccuracies or falling behind on your books.
- Whenever it’s time to get a loan or file your taxes, you can be confident that your books are all in order and ready to hand to a CPA.
You can also hire a bookkeeper in-house, but outsourcing your bookkeeping is the better option. What are some reasons to outsource instead of hiring in-house?
- Outsourced bookkeeping services are more flexible, allowing you to tailor your service to suit your changing needs.
- The cost of outsourcing bookkeeping can often be substantially less than paying an employee’s salary plus benefits.
- Someone else is in charge of vetting and hiring qualified, professional bookkeepers.
Bookkeeping services can handle a variety of tasks for you.
It turns out there is a lot of confusion between bookkeeping, accounting, and taxes. So if you decide to outsource your bookkeeping, what does that cover?
Bookkeeping services can handle any and all of these tasks:
- Importing financial information from bank statements, credit card statements, payroll records, invoices, and more .
- Making sure all transactions have been properly categorized and reconciled
- Manage the tracking of bills and income yet to be recognized (which typically includes accounts payable and receivable management)
- Making sure your books are always up-to-date and accurate
- A monthly or quarterly statement of cash flows, profit & loss, and balance sheet for your business.
- Explaining your financial statements and other aspects of your bookkeeping in terms you can understand
- Providing information to investors, tax preparers, and other interested parties with complete and accurate financial reporting.
The details will need to be worked out with the person or service you choose. Ask questions in advance and make sure your expectations are aligned with theirs before signing up.
How Does Outsourced Bookkeeping Work?
When you choose to outsource your bookkeeping to an independent professional bookkeeper, a human-only service, or a hybrid bookkeeping service, the process looks a little different. Here’s how the process works when you use a service.
- Step 1: Your dedicated account manager will help you set up all the integrations and connect all the financial accounts and software your business already utilizes.
- Step 2: Bookkeepers and software work together to record, categorize, and reconcile transactions. Meanwhile, you don’t have to worry about your books.
- Step 3: We send you your financial statements each month.
If you have any questions about your monthly financial statements or anything else along the way, your dedicated account manager is always available to assist you.
Costs of Outsourcing Your Bookkeeping
If you’re looking for a hard and fast guide here, you’ll be disappointed. Business needs and financial circumstances vary widely, so it’s impossible to give a blanket answer. number that businesses can expect to pay for outsourced bookkeeping. But we can give you a few guidelines as to bookkeeping costs.
Rates depend on factors such as:
- Whether the service relies on software, humans, or both
- How many transactions and expenses your business incurs (either by the number of transactions or the dollar amount)
- Whether you want accrual or cash-based bookkeeping
- How many financial accounts you need to connect
- How often do you receive financial reports?
- The caliber and time commitment of support you will receive
- Other features include accounts payable and receivable, inventory management, and more.
- The complexity of your financial situation (i.e., revenue recognition for multiple entities).
The more complex your organization is, the higher your bookkeeping costs will be — and the more likely you are to need a good bookkeeper.
Increase the productivity of your bookkeeping by outsourcing
Accurate financial records are essential for every business — but managing them shouldn’t consume your time and patience. If bookkeeping is taking you away from growing the business, it is worth the investment to give it to a professional.
By doing so, you’ll be able to focus on what you do best.