Monday, August 19, 2013

7 Best Reasons to Outsource Your Bookkeeping

If you are like the typical business owner you probably already consider the accounting function as a necessary evil. Yes you want the reports that accounting can provide but you probably consider the data entry, accounting rules, tax planning and all the rest a frustrating time waster. When it comes to your company's accounting you really have only three choices. You can hire an accountant on your staff and accept the cost and liability of brining on an employee, you can do it yourself which almost always ends in disastrous results, or you can outsource the function to a professional bookkeeper service. Of the three options, outsourcing probably makes the most sense for most organizations.
1. Peace of mind at tax time
Actually tax time is an all year long event and the tax planning strategies that a bookkeeper can provide and implement will assure you that there are no nasty surprises when you actually file.
2. Higher profits through better analysis
While counting beans is at the heart of bookkeeping, it is the information gathered from that process that the bookkeeper can use to develop management controls and detailed analysis of financial performance. You may discover that new customer who has been buying like crazy isn't really that great a deal because he's 90 days in arrears. Or you may discover that certain product lines or services are far more profitable and decide to shift your marketing focus.
3. Create added value for clients
It's generally accepted that a business should focus resources on those activities that add value to a client relationship. Most clients don't care how you do your accounting so long as their invoices are correct. Not having to spend hours on the bookkeeping function means you have more time to do what you do best....focusing on the client.
4. Instant access to financial data
Thanks to the technology known as application server provider (ASP) you can have a secure connection to all of your reports anytime anywhere. Bookkeeper services almost universally use this technology that allows clients to view their reports anytime they wish just the same as they would if they had an accountant in house doing the work.
5. Real cost savings
Generally Bookkeeper services bill by the hour or market specific packages. On average, their services will run 10% to 20% less than the base wage of an in house accountant. That may not sound like a huge savings but when you toss in the savings on benefits and payroll taxes that number can move from 10% to 50%.
6. No employer employee issues
When you outsource this service you also absolve yourself from any employer liability as well. Also gone are the management worries about training, discipline, salary negotiations, firing, hiring and other time consuming activities that are non-income producing. Your bookkeeping service assumes all of those headaches.
7. No loss of control
Some business owners worry about losing control over their finances if they let an outside firm take charge. The fact is you can custom design a program where the service only does the high volume grunt work and you retain the responsibility for preparing reports from the data. With online banking added, the business owner can be the only person who approves payment to anyone. The service can be as comprehensive or as bare bones as you desire.
With these benefits and more, it's not surprising that nearly 30% of all large businesses outsource to bookkeeper services. Smaller organizations can take a lead from the bigger guys and operate more effectively and competitively by doing the same.

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