If you’re a business owner handling the bookkeeping in your business, the following may sound familiar.
Bookkeeping isn’t your specialty but there’s no one else in the business to manage it for you. The burden of having to balance your books is taking its toll, with you constantly feeling like you’re playing catch up. You’re doing the bare minimum when it comes to your finances and aren’t getting a sophisticated picture of your cash flow or profitability. You’re spending less time on what you’re good at and on your strategic business goals.
On the other hand, you may have an in-house resource to manage your bookkeeping, but are still experiencing problems. Here’s another scenario we see play out regularly.
You’re paying a part-time or full-time employee to manage your business’ bookkeeping and payroll, but you’re not convinced your bookkeeping tasks require that much time. You don’t feel like you’re getting value for money by investing in an in-house resource. You can only afford to hire a junior resource and are missing out on more sophisticated financial management and advice.
In both of these scenarios, it may be time to start considering outsourcing your accounting and bookkeeping services.
What are outsourced accounting and bookkeeping services?
Outsourced bookkeeping services refers to an arrangement where your business engages a bookkeeper or bookkeeping firm to handle your business’ bookkeeping. Instead of managing your finances in-house, an expert or team of experts is contracted to take on your business’ bookkeeping tasks on your behalf.
What does an outsourced bookkeeper do?
While it will depend on the nature of your agreement an outsourced bookkeeping service may handle:
- Recording financial transactions and balancing the books
- Bank reconciliations
- Monthly reports
- Accounts receivable including creating and sending invoices, and following them up
- Accounts payable including paying bills
- Lodging BAS
- Preparing tax returns
- End of year reporting including profit and loss statements and balance sheets
- Creating budgets and forecasts
What are the benefits of outsourcing your accounting and bookkeeping services?
There are several benefits to outsourced bookkeeping services including:
If you or another time-poor colleague have previously managed the books in your business, contracting out this responsibility will immediately save the business precious time. This will allow your team to focus on your top business priorities while leaving the finances to the experts.
The costs of outsourcing bookkeeping are typically lower than the costs of employing a bookkeeper in-house as you only pay for what you need. An outsourced arrangement will usually involve a monthly retainer or hourly rate below what you would pay for wages, superannuation and entitlements for an employee. It also won’t contribute to your overheads through computers, devices, furniture etc.
If you’re weighing up whether to shift from handling bookkeeping yourself to investing in a bookkeeping or accounting firm, you should think about what your time is worth. For example, if you’re a consultant in Sydney that charges $250 an hour, an investment of $150 an hour for bookkeepers or accountants in Sydney is more cost effective. You gain back time that you can dedicate to revenue-generating work.
When you outsource your accounting and bookkeeping services, you gain greater flexibility. You can scale up and down as needed. As your business grows, instead of needing to increase headcount, you can easily scale up your bookkeeping requirement on a moment’s notice.
If you’re unhappy with your firm, you are also able to easily end the arrangement. It’s much harder to get rid of an in-house employee compared to an outsourced bookkeeping firm in the event that things aren’t working out.
With tax, superannuation and payroll regulations changing regularly, it’s difficult to stay on top of these changes, on top of everything else. An outsourced bookkeeping service will be across any changes and have extensive industry knowledge so your business can remain compliant.
Team of experts
If you choose to work with a bookkeeping or accounting firm, you will generally benefit from having a team of people working on your account. That allows you to tap into multiple experts, at a lower cost. This is just one advantage of choosing to outsource to a bookkeeping or accounting firm rather than outsourcing to a freelancer. Another advantage is that firms will tend to have better quality assurance measures, technology and processes - all which are a value-add to your business.
More sophisticated financial governance
One of the major benefits of outsourcing your bookkeeping to the experts is that you can take your bookkeeping and financial management up a notch. A great outsourced bookkeeping service will not just manage your books, they will also help with budgeting, forecasting, cash flow and profitability. This level of sophistication in your financial governance is invaluable when it comes to reaching your business goals.
Signs your business may be ready for an outsourced bookkeeping service
- You’re falling behind on bookkeeping or aren’t happy with your in-house resource
- Your finances are becoming more complex
- You’re not confident that your financial data is accurate
- You’re worried you don’t have a complete picture of your finances
- You’re experiencing issues with cash flow or profitability
At Keeping Company, we’re not just accountants, we’re business people too. With our counsel, your business can reach its full potential.
We have a team of experts; Cloud Accountants, Business Advisors, Finance Specialists working together and ready to help, contact us today.
For all media enquires please contact Tracy Miller, CMO, Keeping Company 0414 898 452.
The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.