Tag: bookkeeper

What is the difference between bookkeeping and accounting?

When people think about the differences between bookkeeping and accounting, they often have difficulty distinguishing the two. The objectives of bookkeepers and accountants are similar, but they provide assistance to your company at different points during the financial cycle.

Essentially, bookkeeping is the process of recording financial transactions in a transactional and administrative manner. Accounting data provides you with insight into the financial health of your company in a more subjective way.

Bookkeeping is important

A business’ bookkeeping is the process of collecting financial data and recording daily transactions.

Records financial transactions • Posts debits and credits • Produces invoices • Prepares financial statements (balance sheet, cash flow statement, and income statement) • Maintains and balances subsidiary accounts, general ledgers, and historical accounts

Maintaining a general ledger is an important part of bookkeeping. A general ledger is a basic document used by bookkeepers to record the income and expenses received from sales. This is called posting. Increasing sales require more frequent updates to the ledger. In addition to specialized software, you can also use a spreadsheet or just a piece of lined paper to create a ledger.

The complexity of an accounting system is usually determined by the size of the company and the volume of daily, weekly, and monthly transactions. Documentation of your company’s sales and purchases is required in the ledger, and some transactions require supporting documents. For more information, visit the IRS website.

The role of accounting in society

Accounting is the process of creating financial models by analyzing financial data obtained by bookkeepers and business owners.

Unlike the largely transactional bookkeeping process, the accounting procedure is more subjective.

  • preparing adjusting entries (recording expenses that have occurred but have not yet been entered in the accounting system) • reviewing company financial statements • analyzing costs of operations • preparing income tax returns • helping business owners understand the impact of financial decisions

Accountants analyze financial data to assist in making business decisions. As a result, you’ll understand the true profitability and cash flow of your company. Accounting uses data from the general ledger to reveal a company’s overall picture and trajectory. Business owners frequently seek the assistance of accountants for tax planning, financial analysis, and tax filing.

What is the difference between an accountant and a bookkeeper?

Occasionally, bookkeepers and accountants do similar work, but their skills are different. A bookkeeper’s main responsibility is to keep track of transactions and keep you organized financially, whereas accountants provide consulting, analysis, and tax advice.

Qualifications for bookkeeping

It’s not required that bookkeepers have formal education. In order to be successful, bookkeepers must be meticulous with their work and knowledgeable about important financial matters. Generally, either an accountant or the owner of the company whose books the bookkeeper is keeping supervises the bookkeeper’s work. Therefore, a bookkeeper cannot claim to be an accountant

Qualifications for accountants

Accounting bachelor’s degrees are typically required for accountants. Those without an accounting degree often consider finance degrees to be suitable substitutes.

Accounting professionals can obtain further professional certifications, unlike bookkeepers. Certified Public Accountants (CPAs), one of the most prestigious accounting credentials, can earn the title with enough experience and education. To become a CPA, an accountant must pass the Uniform Certified Public Accountant examination and have professional accounting experience. Part of the cost of hiring an accountant depends on his or her certifications.

 

How Can a Bookkeeper Help My Business?

Bookkeeping Company MinneapolisWhat Do Bookkeepers Do?

In addition to recording expenses, income, and transactions in a company’s books, bookkeepers reconcile the company’s financial accounts on a monthly basis. A bookkeeper might also help prepare financial statements and reports. Even though bookkeeping can be an in-house position, most businesses hire freelance bookkeepers.

A bookkeeper can wear a variety of hats depending on what a business needs. The majority of bookkeepers nowadays work with business accounting software. In addition, most bookkeepers can handle a few tasks for your business. Despite the fact that a bookkeeper’s job is multifaceted, there are some tenets that all bookkeepers follow.

You may also be wondering if you need a bookkeeper if you’re wondering what a bookkeeper does. The tasks that a bookkeeper can perform for you, how much a bookkeeper charges, and how to find a good bookkeeper will be discussed.

What Are the Duties of a Bookkeeper?

This question can’t be answered simply. Bookkeeping can vary from business to business, just like any other line of work. Bookkeepers tend to handle the following tasks most often, however:

  • Record financial transactions
  • Reconcile bank accounts
  • Manage bank feeds
  • Handle accounts receivable
  • Handle accounts payable
  • Work with your tax preparer and assist with tax compliance
  • Prepare financial statements
  • Take on some payroll and human resource functions
  • Make technology and process streamlining recommendations

Here’s a closer look at what a bookkeeper does:

Reconcile Your Bank Accounts

Reconciling your financial accounts is the most important task for any bookkeeper. It ensures that the information in your accounting software matches the information in your bank statements, credit card statements, and other financial statements.

You should reconcile your accounts regularly to avoid overdraft fees, fraudulent charges, or incorrectly recorded transactions. Software makes reconciliation relatively simple, but there is still a need for a human touch to ensure all transactions are accurately recorded.

Manage Bank Feeds

In a nutshell, your bookkeeping service or bookkeeper should be managing the transactions coming in through your accounting system’s bank feed. With a bank feed, you can see each transaction in real-time from your accounting software.

Accounting software should be able to automatically categorize certain transactions, depending on how effective it is. Credit card transactions from an airline, for example, can automatically be categorized as travel expenses. They make sure that these transactions are properly categorized by keeping an eye on them.

The bookkeeper may also have to manually enter transactions that aren’t included in the bank feed. A lot of the transactions that need to be added will be generated outside of the accounting system, such as cash payments or handwritten checks. It may also involve matching customer deposits with outgoing transactions as payments against vendor bills to help manage accounts receivable.

Handle Accounts Receivable

There are several ways to manage accounts receivable. Small businesses may enter their own estimates or invoices, and they may receive payments against the invoices.

There is another option, however. The client calculates the job using an industry-specific estimating program, then provides the bookkeeper with the total. As the project progresses, they create or update invoices in their QuickBooks Online account.

Invoice generation, sending invoices to customers, preparing statements, and assisting with collections are all part of the account receivable services we provide to our clients. The customer notifies the bookkeeper when they have been paid, we enter the payment in QuickBooks Online, and then we create a deposit matching what the client takes to the bank.

Handle Accounts Payable

In addition to accounts receivable, many bookkeepers handle accounts payable for their clients. The bookkeeper will deal with all vendor bills the company receives. The bookkeeper should note the payment deadlines from each vendor, early payment discounts if available, and submit payment to the vendor. When a company grows, bookkeepers can add additional approvers to approve payments. To maintain positive trade credit terms and relationships with suppliers, you need to manage your accounts payable properly.

Work with Your Tax Preparer

Many bookkeepers are unaware of the fact that, by default, they’re going to act as a translator between you and your certified public accountant or enrolled agent. A bookkeeper often has a better understanding of your books, so when it’s time to file your small business taxes, you can have your bookkeeper contact your tax preparer.

Prepare Financial Statements

For your business, most bookkeepers will prepare three financial statements: a profit and loss statement, a balance sheet, and a cash flow statement. The financial statements should be updated every month, and again at the end of the year. Profit and loss statements show your company’s bottom line and operating expenses.

The balance sheet shows the assets and liabilities of your business. The cash flow statement shows how your company is spending and earning cash. Bookkeepers can prepare financial statements with accounting software and send them to their accountants and tax preparers.

Process Payroll

Payroll and human resource functions are sometimes also handled by bookkeepers. Payroll may be included in your bookkeeping service, or they may help you with tax payments and forms. Your accounting system might import payroll data directly from your payroll service provider, or it might import data from a file provided by your payroll service provider. You might also be able to use a bookkeeper to manage timesheets for hourly employees.

Recommend technologies and processes for streamlining

Additionally, bookkeepers are pretty good at keeping up with the latest technology. It’s not uncommon for your bookkeeper to discover a new app or solution tailored to your industry, such as self-employed accounting software, for instance, especially if many of their clients are in the same industry. Perhaps there is a way to reduce labor costs. The goal of a bookkeeper is to streamline your back office. Consequently, they can be an extremely valuable partner for your business.

Bookkeepers Help You Get Back to Business

You now know all of the main skills a bookkeeper can bring to your business. There’s much more to bookkeeping than simple data entry and consulting an accounting book.

Ultimately, the answer to this question will depend on what you and your small business need from your bookkeeper. You will have more time and energy to focus on growing your small business by having a bookkeeper keep track of your finances.

 

Finding the Right Bookkeeper for Your Company: Everything You Need to Know

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Outsourcing bookkeeping can be a good option if you’re ready to remove bookkeeping from your plate, but it can also raise a lot of questions. Which tasks will your bookkeeper be able to handle? Does a bookkeeping service cost a lot? Is it possible to use only bookkeeping software on your own?

This article discusses a few factors to consider when choosing a bookkeeping solution:

  • The benefits of outsourcing your bookkeeping — versus using bookkeeping software or hiring a bookkeeper in house
  • What tasks a bookkeeping service can cover
  • How the process of outsourcing your books actually works
  • How much you should realistically budget for quality outsourced bookkeeping.

We’ll go over everything you need to know in order to make key decisions about outsourcing your bookkeeping.

Is it a good idea to outsource your books?

You can see the benefits of putting bookkeeping off your plate and onto someone else’s. Here are some examples:

  • This means your time and patience go into growing the business rather than doing it yourself.
  • You won’t need to worry about inaccuracies or falling behind on your books when a professional is handling it.
  • Your books will be complete, professional, and ready for a CPA to review when you are ready to raise money or file your tax return.

You don’t have to outsource your bookkeeping to another company to get your books off your hands. In-house bookkeepers are another option. Why should you outsource your books instead of hiring an in-house team?

  • As your business grows, you can scale your bookkeeping service up or down as needed.
  • In many cases, outsourced bookkeeping services are less expensive (sometimes by a lot) than hiring a full-time bookkeeper and paying benefits.
  • Bookkeepers are vetted and hired by someone else.

What an outsourced bookkeeping service can do for you

It turns out that there’s a lot of overlap between bookkeeping, accounting, and taxes. Each bookkeeper performs a specific set of tasks. When you outsource your bookkeeping, what is actually included in that service?

Outsourced bookkeeping services can handle any and all of the following:

  • In other words, you can import financial information from bank statements, credit card statements, payroll records, invoices, etc.
  • Accounting for those transactions by categorizing and reconciling them
  • The tracking of bills and revenue yet to be recognized (which includes accounts payable and accounts receivable management)
  • Maintaining accurate and up-to-date books
  • On a monthly or quarterly basis, we provide you with accurate financial statements, such as Profit & Loss (Income) Statements, cash flow statements, and a balance sheet
  • Understanding your financial statements and other aspects of your bookkeeping
  • Providing investors, tax preparers, and anyone else who needs access to complete and accurate financial reporting.

It’s up to you to work out the details with the person or service you choose. Ensure your expectations are aligned with their offerings before signing up by asking questions up front.

Why You Should Outsource Your Bookkeeping

Every business needs accurate, complete financial records – but managing them doesn’t have to consume all of your time and patience. Taking the back office off your plate is worth the investment if you would rather spend time growing your business.

This way, you can be certain your books are accurate and get back to what you do best.

 

Payroll Outsourcing: How it Can Help Your Business

Even though payroll is time-consuming, it plays an essential role in every operation. Businesses of all sizes opt to outsource their payroll functions to professionals rather than managing payroll functions in-house with manual bookkeeping.

What Exactly is Payroll Outsourcing?

Outsourcing payroll functions allows businesses to save money, time, and effort by outsourcing all payroll functions to an external manager. Comparatively to in-house payroll management, outsourced payroll solutions provide a higher level of accuracy since they are prepared, analysed, and evaluated by qualified professionals.

Ideally, payroll outsourcing achieves three key goals –

  • It allows businesses to focus more on core tasks by freeing up both time and resources.
  • The costs and risks associated with it are reduced.
  • Ensures businesses have access to the latest payroll technology and expertise.

Let us discuss these benefits in more detail and understand what they mean for businesses.

Benefits of Outsourcing Payroll

The following advantages can be gained from outsourcing your payroll process to a qualified service provider.

  • Enhanced Productivity/Time Saving

The process of managing payroll processing in-house is extremely time-consuming and requires a great deal of resources, manpower, and attention to detail, resulting in lost productivity. Furthermore, the time spent on accurate payroll management, involving a great deal of data, diverts time from core business activities.

Businesses and HR departments can devote more time to other important tasks for business growth and expansion by outsource payroll.

  • Reduced Costs

Time is the most important commodity for any business owner. It is linked to the revenue that the business generates from tasks that it handles. Time is money, so the more time they save each day, the more money they earn.

There is a huge value when it comes to calculating employee hours, paid time off, deductions, leaves, printing and distributing paychecks, and completing tax returns.

The outsourcing of payroll processing allows you to ensure all aspects of the payroll process, including handling payroll inquiries, calculating payroll taxes, and filing statutory documents, are handled efficiently and effectively. By outsourcing payroll functions, you can save a lot of money when you compare how much time is spent in-house managing payroll, versus how much you would have paid for those services if you did it internally.

  • Advantage of the Latest Technology

The rapid advancement of technology has led to an increase in global payroll companies using cloud-based systems to manage their business data, give better visibility and transparency to payroll processing, and maintain robust data integrity.

With outsourcing payroll, you can also take advantage of emerging technologies, such as RPA, used by specialist payroll service providers to optimize payroll processing, improving the accuracy and timeliness of the process. Many of the latest payroll technologies are used by professional payroll providers such as UptoDate Bookkeeping to manage payroll outsourcing seamlessly.

  • Compliance

When it comes to handling complicated government tax regulations related to payroll, many small business owners struggle. It becomes difficult to process salaries and reimbursements of every employee in an organization due to a variety of complex rules, employee benefit mistakes, multiple bylaws, PF percentages, and taxes. It is important that businesses avoid mistakes that can lead to audit irregularities and penalties.

Professional payroll service providers, on the other hand, have the required expertise and are always abreast about the latest compliance regulations, and tax rate changes. They also have dedicated staff to help companies meet all the regulatory updates.

  • Enhanced Data Security

Managing payroll in-house entails a number of risks, including the safety of the server/network and embezzlement. There is also always a risk of data mishandling when increasing numbers of employees are working from home these days.

Providers of outsourced payroll services use highly secure cloud-based servers and encryption technology to keep your sensitive information safe.

Conclusion

Despite not directly affecting the business, payroll is one of those critical business functions. However, if it is not done in an efficient manner, it can negatively impact the overall business.

Providers of payroll services specializing in payroll management typically provide many services including compliance, complexities of regulations, tax calculations, and human resource management. UptoDate Bookkeeping, powered by a strong technology backbone, has achieved >99.8% accuracy in managing payroll for our clients. With such trained professionals handling payroll functions, business productivity can be enhanced, and you can focus on the growth of your company.

 

Benefits of Outsourcing Bookkeeping Services

The challenges of owning a small business are unique. By outsourcing your bookkeeping services immediately, you can free up time and brain power. It can be especially brutal to run a small business. You’re probably working around the clock to run a small business. Fortunately, there are resources that can ease your workload. In order to keep your books in order, a small business owner should hire external bookkeepers.

1. The Benefits of Expertise

Probably when you started your business you didn’t intend to manage your books yourself or with the help of a part-time cashier. Your chances of being an expert on it are slim, because you have no experience with it. An outside bookkeeping agency is a necessity in this regard. Your financial records will be organized by professionals whose sole purpose is to make your life easier. It will be a relief to have an accountant who knows how to deal with tax returns, audits, and government remittances.

2. Power in Numbers

When you outsource your bookkeeping, you don’t just hire one person to do the work. Our team of experts crunches the numbers for you.

3. Cost-Effectiveness

If you are tired of doing your own bookkeeping, the usual solution is to hire someone. Small businesses with limited cash flow may not be able to afford this. We offer services like ours where you only pay for what you need, when you need it. There is no need to hire an accountant* on a retainer or pay for health insurance for a new employee.

4. They’ll Scale with You

Even if all goes well, the financial needs of your business will grow too big to handle by one individual. A bookkeeping company, however, can grow with you.

5. Increased Focus

You’d most likely rather use your time improving the things that your customers care about if you were the face of a company. You can now put the time and money you would have spent crunching numbers towards improving your product or service. You can work on improving employee training, improving customer service, or adding a new business department to your business. You can concentrate on what matters to you when you outsource your bookkeeping.

6. Better Tools

Many tools and software programs can make your bookkeeping much easier, even if you’re doing it on your own. However, they are often too expensive for small business owners to afford.

7. Less Stress

Outsourcing your bookkeeping can lead to less stress at the end of the day. Being clear-headed and well rested is important for a successful business. With a thousand things on your plate at once, reaching that mental state is impossible. You can eliminate your financial concerns and IRS challenges by outsourcing your bookkeeping needs, and you’ll be free to do what you like.

 

Find Your Perfect Bookkeeper with Outsourced Bookkeeping

bookkeeping services near forest lake mn

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.

 

Bookkeeping Consulting Services

Bookkeeping Company Minneapolis

Your job as a business owner is to get things done. So you do exactly that. You manage payroll and keep your accounts receivable updated. You reconcile your bank payments and deposits to ensure you have enough money to pay all of your bills.

You even prepare your own business tax returns and take on hundreds of other tasks both small and large. You work very hard. You always do whatever needs to be done, and you rarely ask anyone for help. This is why you need to have a bookkeeping consultant.

It’s about money sometimes

When you have limited cash flow, it is critical to save money wherever possible. This can mean no bookkeeper, no office manager, and no marketing department. When you do everything on your own you will have money that can be invested into your business. That is a sure way to ensure that your business continues to grow. It is also a very easy way to overlook things that are critical.

It’s about control sometimes

As the main investor, CEO, owner, and the person who has the most to lose or gain, you take on many important tasks. It can make sense to want to do things yourself if you are worried that somebody else will mess everything up. Of course, this means having to spend long hours at your office and being able to take few vacations, if any. However, if you want to have things done exactly your way then it is best to do it yourself.

This is why you need to have a bookkeeping consultant

Things could still get messed up unless you are very experienced in every task you are handling yourself. You may not want or need full-time administrative staff. However, getting solid professional advice is still something you can greatly benefit from. A consultant can provide you with this.

A bookkeeping consultant will not do all the things you do in your business. They will just help you keep everything on track. This is accomplished through becoming familiar with your business and provide you with advice on management, financial, and organizational strategies. A consultant can implement solutions and provide services that will help your business continue to grow and succeed.

We Provide Consulting and Bookkeeping Services

We are dedicated bookkeepers. However, we also provide small and medium-sized businesses with professional consulting services. You can outsource your work o us so you don’t need to pay for a full-time professional. Our services are conducted remotely so we will not be invading your office.

Trying to do everything yourself is never a good idea. Our bookkeeping consultant experience and expertise can provde you with the financial services and advice that you need while you remain in control of your business.

Why Maintaining Proper Financial Records Is Key

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bookkeeping services near forest lake mnAll businesses need to devote at least a portion of their attention to the topic of accounting. Regardless of the industry niche or service sector, it is vital that you have a strong awareness of your financial standing at all times so that you stay current on obligations to state, local, and federal revenue agencies. As such, there are a number of key reasons why enlisting the help of a qualified bookkeeper makes a great deal of sense.

Understanding Your Finances

There is no substitute to always knowing your company’s financial status at any given point in time, including whether you are generating profits, if you are gaining or losing clients, if you are exceeding your goals, and if you have sufficient reserves to meet all obligations. When you lack this kind of information, your business can quickly spin out of control. You must always have a firm grasp of your inventory situation, whether you need to place orders, whether your suppliers are extending the right kind of credit, and whether you are prepared to cover every type of overhead your business must pay. Without having the right detail on your financial circumstances, you also run the risk of falling out of compliance with regulatory authorities on local, state, and federal levels. The best way to stay on track is to ensure that your books are always updated and entirely accurate. In this way, you can keep tabs on cash flow, negotiate the best rates from suppliers and lenders, and stay on top of all governmental rules and regulations.

Achieving Tax Compliance

Every business must meet obligations imposed by taxing authorities on a regular basis. These duties encompass paying employee withholdings, social security and Medicare taxes, federal income tax, local sales and business taxes, and more. Filings must be timely, and quarterly payments must be promptly made. Inaccurate financial statements and books increase the chances that these duties will be neglected or done in shoddy fashion.

Benefits Of Hiring A Bookkeeper

Professional bookkeepers can reduce the pressure by assuming responsibility over many of the aforementioned functions, letting your focus remain on strengthening the enterprise. Bookkeepers possess the type of experience and know-how needed to conduct oversight over your business finances and keep your tax filings and payments organized and filed.

For businesses with a large amount of vendor payments and customer receivables, an additional clerk may be useful for processing invoices, assisting in collections, and remitting amounts due. Bookkeepers can then assist on a monthly or even a quarterly basis to ensure that all functions are being handled appropriately.

While we have referred to this type of professional as a bookkeeper, if your business is of a certain size or scope, it may be wise to hire an accountant who can keep more formal controls over your enterprise’s financials. Such an individual can also aid in crafting income and asset protection strategies. These may include flexible spending accounts, IRAs and other financial tools that can lower your overall tax liabilities and boost wealth at the same time. Regardless of the actual job title used, savvy business owners understand the innumerable benefits of having a financial professional on their side.

 

The Main Reasons 8 Out Of 10 Small Businesses Outsource Their Bookkeeping

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While outsourcing bookkeeping services was once considered reserved for larger companies with bigger budgets, it’s now become much more accessible. The modern business landscape has ultimately made this practice increasingly common and practical. Nowadays, the majority of businesses have at least a fraction of their bookkeeping and accounting being handled by an outside organization.

1. It’s More Cost Effective

A primary reason a lot of companies have started to outsource their accounting rather than keeping it completely in-house is to experience the cost savings that come with it. While professional accounting services don’t come cheap, hiring staff to do it in-house can be even more expensive. After all, by hiring your staff of full-time accountants, they will require desk space, benefits, payroll, and even equipment. When you hire an accountant that is outsourced, you will be able to get all of this built into the base pricing. Perhaps best of all, you only have to pay for it when you need their services.

2. Dedicated Team

By outsourcing your bookkeeping efforts you will be able to gain access to a variety of professionals who are experienced and who will be dedicating their time to save you money. They will be working around the clock to ensure your books are kept in order. As a business owner, you may be tempted to keep your books to yourself and under your control, but having a professional and experienced accountant is something that cannot be understated.

3. Business Growth

A lot of businesses end up choosing to outsource their accounting efforts once they have been able to sustain a level of growth. For instance, when you begin to approach around one million in revenue, keeping your books in order completely in-house can become unrealistic and improbable.

4. Outside Investment Capital

One of the other reasons businesses end up sending their accounting to another company is due to the fact they have received a lofty investment directly from an outside source. These investments typically come with their terms that outside investors place on them to ensure they are spending their money wisely.

5. Focus On Business

You started your business to make money by selling either a product or a service. By effectively outsourcing your accounting efforts, you will be able to place greater focus on the core elements of your business. You will be able to redirect all of you and your staff’s focus to result-producing activities within your business. It will help give you much more guidance on the overall financial health of your business which can help you maintain profitability. Any business that outsources its books will have a much better ability to focus on various result-producing activities like sales and marketing while having the assurance that your books are being handled by professionals in the field.

6. Access To Better Technology

Outside accounting services will have access to the best possible technology and equipment in the industry. After all, that is what they do. Their entire company is structured in a way to position themselves as the best accounting provider. Because of this, they will have the highest standards set forth which you can leverage as a business.

7. Gain More Control

By having your bookkeeping controlled by a third-party company, you will be able to take better control over your business. You will be able to hire them to do the job and focus on other things that you need to. You will be able to rely on having a dedicated team of accountants working around the clock on your books while you can focus on the bigger picture to ensure everything is being done the right way.

8. Make Your Life Easier

As a business owner, you are already wearing multiple hats as it is. You want to ensure that you can focus on the aspects of your business that need your attention. Running your business isn’t easy. By effectively outsourcing your accounting and bookkeeping, you will be able to minimize the stress you are dealing with and have your business running like clockwork.

Main Reasons To Outsource Your Bookkeeping

Profit First Professional

Profit First ProfessionalOftentimes, we meet with clients when they are going through a crucial growth cycle. This usually occurs when business owners reach a certain point where it becomes difficult to handle their books.

Typically, it’s not long after that point when business owners recognize the importance of maintaining updated and accurate financial records. However, being able to maintain accurate and updated records isn’t the easiest thing in the world. After all, it requires a hefty time commitment and a lot of manpower. It’s usually pushed down as a lower priority for business owners. After all, it’s not a result producing activity and that’s not how they turn a profit. Therefore, maintaining books can end up eating into time that could be better spent elsewhere in the business.

By hiring a bookkeeper to handle the tasks in-house, the problem can be resolved. However, it can be costly and it can oftentimes be a worse option than outsourcing the same task. Below, you will find some of the main reasons you should be considering outsourcing bookkeeping rather than handling it in-house.

1. Privacy

For one, you will be able to keep things much more private. The records of a business need to maintain optimal privacy and having someone outside of your organization handling it can make business owners feel much more comfortable. After all, you have to hire someone you trust to handle it inside of your organization and that is not the easiest task in the world. By outsourcing the same duties to a third-party and virtual bookkeeping service, you will be able to eliminate the chances your information gets leaked to those within your organization.

2. The Ability To Scale

Businesses that are growing typically start with much smaller needs and end up needing much more as time goes on. If you are looking to scale your business, it might be time to begin taking your bookkeeping much more seriously. By hiring and outsourcing your bookkeeping, you should be able to properly scale your efforts without needing to make additional costly hires.

3. Training

Unfortunately, business owners don’t have the experience nor the time to train their new bookkeepers to do the job properly. After all, the bookkeeper they end up hiring will likely know much more than they do. Therefore, as a business owner, you wouldn’t be best situated to make the right hire nor would you be in an optimal position to effectively manage the staff you do hire. By outsourcing your efforts to a reputable and experienced bookkeeping service, you will be able to forgo any training requirements and it can ensure that you can maintain your books as professionally as possible.

4. Get The Most Out Of Your Resources

Typically, a business owner who looks to perform bookkeeping duties on their own is looking to cut costs and save money. If you are considering delegating the task to someone in your organization, you would be effectively reducing their productivity and efficiency by asking them to handle something they are not as well equipped for. By outsourcing your bookkeeping to a professional service, you can have your employees and yourself stick to things you are good and most efficient at.

5. Tax and Audit Preparedness

By utilizing outsourced bookkeeping services, you will be able to ensure that your books are always ready for an audit. Having your records in order can ensure that you can satisfy the IRS and banking institutions that may need to see them. This can give you peace of mind knowing that everything is in order at all times.

It cannot be understated how important it is to maintain accurate and updated financial records. By outsourcing your efforts to a professional service, you can maximize the efficiency at which it is done and as a company, you can reduce the burden on yourself and your employees.