Key Takeaways:
- Outsourcing bookkeeping saves time and offers access to expertise & technology.
- Carefully consider your needs, budget, and security before deciding.
- Be prepared for potential issues like loss of control and data breaches.
Your business’s growth is driven by robust financial management and monitoring. Effective bookkeeping is what matters for the same. Nevertheless, Outsourcing bookkeeping is a tricky process as it translates to recording your business’s financial transactions and other information daily.
Furthermore, it’s equally time-consuming. As a result, many businesses now prefer outsourcing it to more capable hands to get enough time to focus on their other core business activities.
However, you can’t ignore the fact that outsourcing bookkeeping services aren’t ideal for everyone. Yes, you heard that right. To know whether outsourcing bookkeeping is the perfect solution for you or not, be mindful of the following points.
Keep the following things in mind before you choose to outsource bookkeeping
The following are the crucial things proposed by the industry experts that you need to remember before planning about outsourcing your bookkeeping operations.
Know what you want!
When you outsource your bookkeeping operations, it’s just like having someone outside your company handle your day-to-day books. Hence, it’s important to have clear expectations of what your outsourced bookkeeper can and should do. In simple words, you should know what you want in return from the bookkeeper.
For example, here are some standard services of a bookkeeper.
- The bookkeeper will ensure timely payment of all valid taxes to avoid penalties.
- The bookkeeper will regularly reconcile your bank accounts.
- Bookkeeper will also maintain other financial records for the accountant to timely file and pay your business taxes at the end of the year.
Hence, you should have clarity on what you expect from the bookkeeper.
Pricing is important too!
When you outsource bookkeeping, you’ll generally come across multiple payment schemes. While some firms charge on an hourly basis, others may charge every month. Thus, you must inquire about the payment terms and choose the bookkeeper that fits your budget.
Another thing is that though outsourcing is a cost-effective approach, at times, you will realise that the bookkeeper is taking longer than you thought to get the work done. Hence, you will end up paying more than your estimation. To avoid such situations, you must be sure about the delivery accuracy of the bookkeeper to save yourself from these extra costs.
The scale of different tools & technologies in use
Being tech-savvy is the first & foremost necessity to survive in the market. All accounting firms and CPAs nod to this. Thus, getting access to modern tools & technologies is another reason to walk down the lane of outsourced bookkeeping.
Inquire about what types of accounting and bookkeeping tools or systems your outsourced bookkeeper is conditioned to. It’s advisable to select firms acquainted with popular bookkeeping & accounting software such as QuickBooks, Xero, MYOB, and Sage.
Turnaround time for the service(s)
Above all the above-mentioned aspects, the main thing to consider while outsourcing is the turnaround time for the service(s). One of your main motives for outsourcing bookkeeping is the timely completion of tasks. Your company can’t progress if there happens to be needless delays and backlogs from your bookkeeper.
Any delay or backlog will not only lead to late tax return filing, but will leave no or very little time for you to go through the books. Hence, look for a company that’s ready to remain on its toes for the timely completion of your work.
Ensure that the outsourcing company is using platforms licensed to you
While outsourcing, you must also ensure that the company is using the platforms licensed to you. This will also ensure 100% security of the key financial data you’ll share with the bookkeeper, besides helping you stay GDPR-compliant.
Note: Being a business owner, you must have sufficient knowledge about GDPR.
Prepare yourself for the common issues after bookkeeping
Yes, you heard that right. Though outsourcing mostly associates with advantages, it does have its issues. For example, you lose some control over how the tasks are being monitored and performed.
Since you’ll share your business’s financial data with the outsourcer, any problem at the latter’s end might prove costly to your business. Similarly, there are other issues you’d prepare yourself with while outsourcing.
Conclusion
Outsourcing bookkeeping has surely turned the tables for many businesses across the globe, as proved by these facts. However, it’s equally correct that outsourcing may not be an ideal solution for you. Hence, you must be sure about the above things before making your mind for outsourcing bookkeeping.
We, at Outbooks, take immense pride in introducing you to our Xero-certified bookkeepers who hold sound experience with the industry’s modern tools & technologies to take your bookkeeping to a whole new level.
