How to Outsource Your Bookkeeping
A business earns and spends money. The expert says to record all these transactions. How? and When? As a small business owner, you know too well that it is easy to put it on the back burner when you are tired. So what is the solution? Outsource bookkeeping?
Yes, multitasking owners prefer to outsource their bookkeeping to third-party bookkeeping services. Delegating this time-consuming task to virtual bookkeepers can reduce your workload. It saves time, effort and resources.
Alternatively, you can handle the task on your own if the number of transactions is very small. You can also set up an in-house accounting setup to take care of the task. Both these options are costly.
Reasons to Outsource Bookkeeping
Bookkeeping is an essential but non-core compliance task. However well you execute it, it generates no revenue for your business. So you have to be careful about how much you invest in it.
Bookkeeping is also a resource-intensive activity in terms of time and mental focus. And a business owner is always short on both these commodities. You are better off using them judiciously to get more customers and revenue. Focusing on finding new growth opportunities is your real task.
When you outsource bookkeeping activity, it costs. However, it saves time and gives you mental space to explore your options. Trusting expert bookkeepers to update your books and taxes reduces your stress level and anxiety associated with the business' compliance.
Experienced bookkeeping services providers update your book using the latest accounting software. The digitised data can be processed for various purposes: to prepare balance sheets, income statements, cash flow statements, or tax returns. These documents assist you in taking effective business decisions.
When to Outsource Bookkeeping
Things don't happen suddenly. There are always signs that point to mismanagement. You have to hire a bookkeeping services provider if you find that:
Bookkeeping on your own is taking too much of your time
- Your books are rarely updated
- You failed to claim tax exemption
- You paid more in taxes
- Your cash flow is disturbed
- Tracking accounts payable and receivable is an issue
How Outsourced Bookkeeping Works
Here are some tips on how to outsource your business' daily bookkeeping activities
Outsource bookkeeping to a local provider
You can outsource bookkeeping to a local bookkeeper or bookkeeping services firm.
A local freelancer bookkeeper is a lonesome professional who will work with you on a one-to-one basis. You need to check their skill levels and experience to see whether they can fulfil your business needs. This is your most affordable option.
A local bookkeeping services firm employs a team of certified experts and will naturally charge you more than a freelancer. They will assign a dedicated manager to you. They work as a team and will need access to physical receipts and invoices to complete your work on time and accurately.
Seek feedback from a few of their clients to know more about the quality of their output and customer service. Sign a contract with them stating the scope of services you need, prices, etc.
Outsourcing to virtual bookkeeping services
A virtual bookkeeper takes care of your business' books online. They use the latest accounting software to update your books. Hire them if you:
- Use online/net banking
- Ready to pay flat monthly fees instead of hourly rates
- Prefer to save your data in the cloud
- Want to access data from anywhere for decision-making
- Can communicate with them using chat or phone
A virtual bookkeeping services provider will assign your work to a dedicated team. They update your books and prepare financial statements for you. You do not have to submit any receipts to them.
Your accountant can analyse the documents to provide you with financial insights for decision-making or to file your business' tax return. If you need their advice, schedule a phone call or chat.
These firms connect with your bank account and download the necessary transaction data through online banking and merchant processor. You need to get a clear vision before hiring virtual bookkeeping services.
Knowing your preferences about data security and business accounting needs will help you decide whether to hire a local freelancer, bookkeeping firm or virtual provider. Contact us to know our bookkeeping solutions to you.