How Outsourced Bookkeeping Services can Help Your Startup Grow
The majority of startups fail. According to CB Insights, 38% of them fail because they ran out of cash or could not find funds. Money in hand matters, and accounting and bookkeeping services help you with it.
You cannot compete without financial resources. Startup founders have to optimise theirs to realise the business idea and stay competitive.
Outsourced bookkeeping services have experts who can provide valuable advice for cash flow management. They help a startup grow by eliminating unnecessary expenses and optimising the use of funds.
What is Bookkeeping?
Bookkeeping records the business' daily financial transactions. And accounting assists in managing its finance.
The bookkeeper regularly updates books of accounts with sales, revenue, taxes, interests, payroll, overhead costs, loans, deposits, and investments. They try to keep on top of bookkeeping tasks like:
- Payments to vendors
- Paying loans
- Payments from customer
- Tracking asset depreciation
- Preparing financial reports
Advantages of Bookkeeping Services
At the beginning of a startup, bookkeeping appears simple. However, day by day, it becomes time-consuming. In addition, you need to take care of invoices, receipts, taxation, assets, loans and investments.
Like everyone else, you have limited time at hand. And you need to use it to find customers, sell, and grow your business. It makes sense to hire outsourced bookkeeping services.
Use Technology
Today, bookkeeping services use the latest accounting software to update their clients' books remotely. All they need from you are the details about startups' financial transactions. Then, they manage the rest.
They digitise the data, prepare financial statements and reports, calculate taxes, and provide financial insights for business decision-making. The sharing of data is encrypted to avoid any data breach.
Time and Overhead Costs
Never trust your accounting and bookkeeping to a non-accounting employee. Their mistakes can cost you dearly and may take more time to correct. Let them do what they specialise in for your startup.
Accounting services know accounting and the latest changes in the field and how to apply them. They are equipped to complete the task efficiently and accurately.
Up and Downscaling of Services
Accounting services firms employ a team of bookkeepers and accountants. So, there is always someone to take care of your books. Compare this situation with the chaos if the employee who takes care of your books leaves suddenly.
In addition, depending on your needs, they can share the workload to cope with the increased volume of your business' transactions. In a slack period, they can also downscale their services to you. You pay for the services you get.
Reduce Fraud
Almost all companies suffer from financial fraud. Startups cannot afford to lose money to fraud perpetrated by their employees.
Your outsourced bookkeeping services provider works independently. Their experts can help you detect and prevent fraud and malpractices.
Access Experts at Affordable Costs
Hiring inexperienced part-time or freelancing accountants may not be the right solution for your startup. With outsourced accounting services, you pay for what you get.
Their experts know the latest trends. They have the industry-wide knowledge and experience to take care of almost all types of bookkeeping and accounting tasks. Their competency reflects in the quality of their output.
Dedicated Support
Like all other employees in a startup, bookkeepers must multitask. Your's may be unable to respond quickly and get the work done when needed.
It is not so with the bookkeeping services. They have a large team. So there is always someone available to take the extra responsibility. Your books get updated on time.
Tax Preparation
Yes, in-house bookkeepers are always prompt in filing invoices and receipts. They are also adept at coping with daily bookkeeping. However, it does not mean they can help you with the tax preparation.
You need an accountant or tax consultant to calculate taxes accurately for your startup. Relying on your bookkeeping services provider means you do not have to hire them permanently. It is why accounting services firm is affordable.
Burnout Rate
The experts advise startup founders to watch their burnout or excessive expenditure rates. Startups with limited finance cannot afford high burnout rates. Your accounting services provider can calculate it for you.
Accounting and bookkeeping are non-core tasks of your startups. To grow your startup, you must spend time on achieving its goals and not on non-core tasks. The hiring of accounting services gives you the much-required mental space.