Outsourcing Bookkeeping Services: How They Help You Build a Better Business

Outsourcing Bookkeeping Services: How They Help You Build a Better Business

Understanding all aspects of your business is part of being an entrepreneur.  In the early stages, you have to get comfortable with every department.  You are responsible for juggling customer service, sales, marketing, and balancing your bookkeeping. While this experience can be helpful in the long run, it can become overwhelming and inefficient. There is a time and place to start hiring and outsourcing aspects of your business to maintain and support growth (and sanity!). These investments ultimately help you do your job better. Then, both your team and your business can enjoy your more focused attention. So how do you decide when to outsource bookkeeping? You may not realize that it might be sooner than you think. Find solutions before your finances and patience reach the point of desperation. We will review:

  • The tell-tale signs you need to outsource your bookkeeping
  • What tasks you can outsource
  • The benefits of outsourcing bookkeeping, and
  • What makes a good bookkeeping partner for your small business.

(Need a refresh on the difference between accounting and bookkeeping? Tap here to learn more) 

SIGNS YOU NEED TO OUTSOURCE YOUR BOOKKEEPING

Outsourcing Bookkeeping Services: How They Help You Build a Better Business Is outsourcing for you? Running a bookkeeping department is tedious and time-consuming, but so crucial to the success of your business. Oftentimes it takes priority over other work or some tasks just don’t get done. Then ultimately your whole business suffers. Outsourcing your bookkeeping can be a powerful tool. Imagine the positive impact of alleviating those tasks for you and your team. You may need to outsource bookkeeping if:

  • You are regularly falling behind on paying or collecting bills
  • You are unsure how to manage your annual and quarterly taxes
  • Bookkeeping tasks are taking time away from other responsibilities
  • You are experiencing delays in payroll and accounting
  • You are unable to take on new clients due to mismanagement or uncertainty
  • You are tracking everything on paper
  • You have concerns about data security or fraud
  • You have an overwhelming backlog of tasks

An experienced bookkeeper can help fix not only these issues, but also build back confidence in your finances. Your entire business can feel the effects of a healthy relationship with your bookkeeping.

WHAT BOOKKEEPING TASKS CAN BE OUTSOURCED

The bookkeeping department handles so many responsibilities. You may not even be able to realize how helpful outsourcing your bookkeeping can be. A skilled bookkeeper tackles the crucial, yet repetitive, tasks that run your business. Their job is to create smoother systems that allow you to have a more accurate view of your finances.

So what bookkeeping tasks can you outsource?

With the help of great bookkeeping solution, an outsourced bookkeeper can master these five areas:

  1. Accounts Receivable
  2. Accounts Payable
  3. Collections
  4. Invoicing
  5. Financial Reporting

One of the areas you are most likely to make mistakes in are items that need manual entries. Handing these tasks over to a bookkeeper can ensure there are no mistakes, only accurate reporting:

  1. Credit card reconciliations
  2. Special customer agreements and payment terms

A large aspect of bookkeeping, that can also be the most time consuming, is your payroll department. Bookkeepers can guarantee everyone gets paid and when they should. A big element of this is managing your cash flow and understanding your hiring process. Better bookkeeping can give you more insight into how you build your team. An outsourced bookkeeper can also take on these payroll responsibilities:

  1. Tax withholdings
  2. Employee garnishments
  3. Payroll taxes
  4. PTO
  5. Time tracking
  6. Child support withholdings & more

If tax season makes you see red, an outsourced bookkeeper can help you prepare to glide through tax time. You will be able to easily access and view all the right documentation for you, your employees, and your CPA. They can:

  1. Prepare for state and federal taxes
  2. Issue 1099s & W-2s
  3. File new hires with the state

Small and medium-sized businesses can drown in these bookkeeping tasks. In some cases, you can only outsource certain aspects of your bookkeeping department (i.e. payroll, invoicing, A/P). However, there are benefits to outsourcing all your bookkeeping. It provides the full picture of your business. This also allows a bookkeeper to integrate as a valuable resource for your business and a supportive partner for your team.

Benefits of Outsourcing Bookkeeping

Clearly, outsourcing your bookkeeping is a valuable investment for your business. It often is one of the first places that small business owners turn to get support where it matters the most.

Reduce Strain and Stress

Your small business will see a return on investment in many areas. But one of the most important is reducing the strain and stress on your already tight resources. When you and/or your bookkeeper are under heavy pressure, you are prone to making costly mistakes. Some of these mistakes (forgetting taxes, delayed payroll, or uncollected invoices) can cause serious harm to your business.

Onboard New Clients More Easily

With the help of outsourcing your bookkeeping, you will also be better prepared to onboard new clients. Managing growth is one of the most exciting aspects of your business. You can’t grow if your bookkeeping department is so overwhelmed that they can’t tell if you actually have the resources to add another client, you won’t be able to grow. Better bookkeeping habits support your ability to smoothly bring in new work or add new products.

Promptly Collect Payments

In a perfect universe, all invoices would be paid immediately upon receipt. However, that is not the case. As work continues to grow it can be easy to lose track of invoices that have been sent, those that are still unpaid, and those that are far past due. Promptly collecting payments on existing work and sending regular reminders on outstanding invoices is an integral part of better bookkeeping.

Better Cash Flow Management

Bookkeeping helps you get answers to pressing operational questions surrounding your business. Can you make new hires? Can you invest in new equipment? Can you open a new location? Outsourced bookkeeping can provide valuable insights into your cash flow management by supporting your accounting department with financial data. Without better bookkeeping solutions, your accounting team has no accurate information to make the big picture decisions that affect the future of your business.

Prepare for Tax Season and Audits

Does tax season send you into a series of anxiety-driven panic attacks? Outsourcing your bookkeeping can better help you prepare for tax season and audits. Too often, we see small business owners and entrepreneurs scrambling to find what they need for their CPA. It becomes a tireless back and forth with their accountant, and they likely miss out on valuable tax deductions due to a lack of records. Outsourced bookkeeping can ensure that everything is carefully tracked and documented so that tax season floats by and you don’t even break a sweat.

Bring Focus Back to Your Role

Finally, if you are spending your time fussing over your bookkeeping, your business and your team are missing out on your full attention. You understand the importance of bookkeeping and that’s why you spend your time there…BUT you and your business will flourish if you are able to bring focus back to your role as CEO, founder, and leader, and remove stress by outsourcing your bookkeeping. Outsourcing Bookkeeping Services: How They Help You Build a Better Business

CHOOSING OUTSOURCED BOOKKEEPING SERVICES

Sharing your finances can be scary.  It can feel like a vulnerable disclosure of your success. Choosing a bookkeeping service should be more than transactional. They should be a valued and trusted partner that understands you and your goals. You can choose a bookkeeping service that has ample experience with your current software. If you are seeking new solutions, ask prospective bookkeepers for their expertise and what solutions might work best for your business. Sometimes a simpler bookkeeping software (lessaccounting.com) can provide your business with everything you need while also saving you money.

Bookkeeping Certifications

There are a few bookkeeping certifications out there, but they are completely optional (unlike a CPA which is mandatory). Here are a couple of the bookkeeping certifications that you might see: Certified Public Bookkeeper (CPB) or a AIPB which is a certification from the American Institute of Professional Bookkeepers (AIPB). Both of these certifications mark one or more years of experience (or thousands of hours) in bookkeeping and require an exam. While they are marks of a good bookkeeper, they should not be the only determining factor. Many bookkeepers work successfully for years without the need for certification. The best option is to meet with and discuss your business goals with those you are considering outsourcing your bookkeeping. A high-value bookkeeping service is one that meets these requirements:

  • They work with a software that functions well for your business
  • They are communicative and supportive with your team
  • They provide additional assistance that helps you understand your finances
  • They are prompt and organized
  • They are professional and knowledgeable

A dedicated bookkeeper can help you understand your tax prep, cash basis, business’s financial health, profit and loss statement, plan smarter and make better tax predictions for your small business. During tax time, accurate books will ensure that you will get the full benefits of your deductions, including tax planning, payroll tax and business tax. Deciding to choose outsourcing bookkeeping services is the first step in helping your business reach its full potential.

Why LessAccounting?

LessAccounting is an online bookkeeping platform that provides both DIY and full-service bookkeeping solutions. We believe that less is more and that your bookkeeping does not need to overwhelm or intimidate you. LessAccounting was created for entrepreneurs, freelancers, and small business owners like you. Our full-service bookkeeping option gives you access and support from a certified public accountant that can make sure your accounting needs are being met and supported by our bookkeeping team. To learn more visit lessaccounting.com and start a free 30-day trial

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