- April 5, 2021
- Posted by: Simply Finance
- Categories: Accounting, Outsourcing
Instead of building an accounting department, the company would be better suited to scale if you outsource your bookkeeping and accounting. This also ensures that your most important asset, your staff, will concentrate on core tasks that support your customers and add value to your overall company.
We frequently meet a large number of clients at a critical juncture in their growth. Company owners who have hit the elusive million-dollar annual sales mark (though they might arrive at our virtual door a little later) and are unexpectedly feeling the pressure of handling their own bookkeeping catching up to them.
It doesn’t take long for a new business owner to realize that keeping reliable and up-to-date financial reports is critical to a company’s success. Simultaneously, the regular activities needed to manage these records often slip to the bottom of an owner’s priority list.
After all, business owners didn’t start their company to become bookkeepers, and the importance of time spent on bookkeeping and accounting translates to a hefty hourly rate!
One solution to the problem is to employ a bookkeeper to manage the accounting duties in-house for the company, but this isn’t always the best solution. Here are five compelling reasons to hire a bookkeeper:
1. Confidentiality: Internal financial reports are one of the most tightly guarded assets in any organisation. This is data that the owner wishes to keep private and safe. Finding someone you can trust to do a good job, remain with the company for a long time, and keep your details private is difficult—especially when a local bookkeeper is aware of your personal financial situation. By eliminating the possibility of a member of their group having access to their financial records, outsourcing to a virtual bookkeeping service with good client references will offer an owner peace of mind.
2. Scalability: Scalability is an important consideration. Growing companies often begin with fewer requirements, but quickly expand to include a full range of bookkeeping services. Hiring an outsourced bookkeeping firm with controller supervision and a full service offering allows you to scale the service to meet your needs without having to recruit or train new employees.
3. Training and Management: Most business owners are unable to train or manage bookkeeping workers, owing to the fact that their bookkeeper is likely to know more about the subject than they do. However, having a bookkeeper who is up to date with the new Quick Books features and has a thorough understanding of state tax laws and reporting methods will make a significant difference in the standard of bookkeeping.
4. Make the most of your resources: When business owners want to save money by doing their own bookkeeping or delegating it to a key employee, they are wasting time and resources that could be better spent growing the company. They are able to spend more time doing what they do best when they outsource their bookkeeping and accounting services. CFOs, office managers, and other non-accounting staff should not be employed on the books.
5. Financials that are Tax and Audit Ready: Using competent bookkeeping services to prepare financial reports makes accountants, the IRS, and banks satisfied. There are no concerns about the accuracy of the books or the integrity of the financial data. Outsourced bookkeeping and accounting services can help a business owner provide financial statements to the bank, satisfy investor feedback, or exchange details with the IRS.
6. Lower Employee Costs: When you outsource your accounting processes, you will save up to 40% compared to hiring an employee because you won’t have to pay for benefits, training, or supplies, and your insurance could be cheaper. It can cost up to 150 percent of an employee’s annual salary to hire a new employee. As a result, outsourcing could save you a lot of money. The less money you spend on recruiting and running your accounting activities, the more money you have to reinvest in the company or take home.
7. Reduce Fraud: Employee bribery is a major issue, and it is unlikely that any company of workers can be entirely free of theft. We’ve previously discussed how employee theft can impact your company, but those figures didn’t involve fraud in general. According to statistics, businesses with less than 100 workers are the most vulnerable to fraud, losing an average of $155,000 a year. Outsourcing your accounting will help you detect fraud in your business.
8. Peace of Mind: You and your leadership team will have peace of mind with the help of a trained and professional accountant. You should be assured that the financial management is in good hands, and that when you attend meetings, the financial details will be correct and delivered in a manner that everyone understands.
Finally, you can rest assured that when you bid on government contracts, you have the requisite financial management in place to adhere to any requirements or constraints imposed by the government. Getting this information prior to bidding would also help you stand out during the application process and bring you ahead of rivals who haven’t considered it yet.
Keeping up with accounting activities is important, if a company needs current financial statistics to present to a banker or simply needs to keep track of cash flow; a simple alternative is to outsource bookkeeping to a professional service.
Do you want to hear more about how you can outsource your bookkeeping? For more details, please contact us!