Managing a business’s financial transactions and data can take time and effort, not to mention the funds needed to stay updated on finances and related data.
However, what if we told you that 1 smart choice could save you all the 3 (time, energy, and money) while keeping your finances in check?
One effective solution is back office outsourcing services to handle various CFO services. This will give you peace of mind and free time to focus on growing your business.
Here’s a closer look at outsourced bookkeeping and how it can simplify your daily operations while improving efficiency.
In this article, we will cover topics that include:
- What is Outsourced BookKeeping?
- Why Outsource Your Bookkeeping?
- When Should Organizations Outsource their Bookkeeping?
- Types of Outsourced Bookkeeping Services
So continue reading as we learn more about bookkeeping, its types, and the benefits of back-office outsourcing in the following sections.
What is OutSourced Bookkeeping?
A good bookkeeping system is essential for any organization or company. Bookkeeping is much more than recording daily transactions. It involves budgeting, payroll, financial data, and tax filing. This data must also be maintained in the long run, demanding both time and effort from organizations.
While many business owners hire full-time in-house bookkeepers, most consider outsourcing bookkeeping an effective method of automating accounting and scaling your operations in the long run.
Here are three ways organizations manage their books:
a. Independent Bookkeepers
Independent bookkeepers can be found on freelance websites and similar sources. These professionals work with companies on a contract basis, and their quality varies from one talent to another.
b. General Accounting Firms or CPA
CPAs and other organizations follow industry best practices and most standard procedures to remain high-quality service providers.
c. Offshore Bookkeeping Organizations
As the name suggests, these teams operate from other countries where bookkeeping is more affordable. This allows organizations to hire the best talents while significantly reducing the fees for their services.
Why Outsource Your Bookkeeping?
- More privacy: Outsourcing your bookkeeping to a reputable company or talent will give you peace of mind that your financial statements and information are safe.
- Scalable: A small business owner has so many expenses to consider. Hiring outsourced bookkeepers means you have saved a good portion of the budget you would use to grow other directions for your business.
- Management and training: You most likely can’t train your in-house team to perform bookkeeping for your operations. With an experienced bookkeeper, you can independently handle all the tax preparation, rules, and reporting methods.
- Added confidence to your business: You know you have not lost expertise in case someone decides to leave the company.
- Access to accurate records: When a professional handles your books, you can rest assured that your records are precise, well-documented, and prepared for potential audits.
What’s more? You save valuable time, effort, and money with different back-office outsourcing solutions.
When Should Organizations Outsource their Bookkeeping?
Outsourcing bookkeeping has been a sensible solution for most business owners, and rightly so. Here are some of the most common signs it might be time to consider for your business:
- Your books always need to catch up: Although keeping track of your financial records can seem impossible, you must update them.
- DIY bookkeeping consumes your time. It takes much longer than you would like to do it yourself, giving you more time to focus on the growing business.
- You need to take advantage of tax savings: You may miss out on valuable tax services or write-offs that could save you money without professional help.
- Cash flow management feels overwhelming: A constant challenge can be that you have to stay on top of incoming and outgoing cash. It can be challenging to track your financial statements: You need help keeping tabs on accounts payable, receivable, and other financial reports.
- Your financial statements need to be more accurate. Accurate financial reporting seems impossible, which may deter you from making the right decisions.
- You need a hand with inventory management: You probably need help keeping your inventory tidy and accurate.
- You are running a startup: For a new business owner, outsourcing bookkeeping will keep costs manageable while maintaining professional oversight.
- Strategic planning is ahead: Your growing business requires top-notch financial expertise to make strategic decisions.
- Employees are stretched too thin: A full-time employee hired for another role spends too much time juggling bookkeeping tasks.
- Temporary setbacks can affect your employees: You may have experienced a layoff or temporary closing, and you no longer have an in-house bookkeeper, but your accounting process must continue to run smoothly.
These are not the only indicators stating that outsourcing bookkeeping benefits your company. Generally speaking, the sooner you transition, the sooner you can get its benefits, such as saving time, reducing stress, and gaining priceless insights into your company’s financial health.
Types of Outsourced Bookkeeping Services
Earlier in the post, we looked at the different options to outsource your bookkeeping requirements. Here’s a more in-depth look at the two significant ways to outsource your bookkeeping:
Work with A Local Bookkeeper
Consider hiring a local bookkeeper or a bookkeeping team close to your organization. The key advantages of such an approach are face-to-face meetings with the bookkeeper, tangible records, and reduced reliance on Internet payments and banking systems.
For an in-house bookkeeper, you can opt for individual freelancers or firms. Freelance bookkeepers work directly with the client in matters of bookkeeping and accountancy. They can work online, at your office, or under a hybrid setup.
When you hire a bookkeeping service, you have extra assurances that solo bookkeepers do not. For example, an accounting business may use certified professional bookkeepers. If your present bookkeeper has to take a leave of absence, the business can cover the gaps with another bookkeeper.
What to look for in Local Bookkeepers?
When hunting for bookkeeping firms, look for those offering instant and secure access to financial reports. Their business should run in accounting software with which you are familiar.
Your bookkeeping service provider must be trusted. They will deal with your bank accounts, financial information, invoices, credit cards, and other essential documents.
Consult Virtual Bookkeeping
A virtual bookkeeping service is paper-free management of your finances, wherein professionals manage your books online. It combines advanced software in bookkeeping with the traditional bookkeeper’s expertise while always focusing on keeping your tabs. Virtual bookkeepers are best suited for individuals who want flat fees instead of an hourly rate, are comfortable with online banking, and want access to their financial information through a mobile app. Virtual bookkeepers prefer virtual meetings instead of meeting in person. This is convenient, flexible, and efficient for the modern business owner.
