Everything You Need to Know About Outsourced Bookkeeping

February 16, 2023by Engin Kunter0

To help navigate your options, we’ve put together a guide to outsourcing bookkeeping. Bookkeeping can be outsourced to a freelance bookkeeper or an established outsourced bookkeeping firm, which may often be part of a larger accounting firm. Working with an outsourced CFO offers business leaders the opportunity to access this financial expertise at a fraction of the cost of hiring a full-time CFO to work for their business. That means you won’t get to spend as much face-to-face time with your accountant as you would if they were your employee. If you’re bringing in an outsourced controller to help manage your existing team, it’s necessary to carefully consider what this relationship will look like.

  • An outsourced bookkeeper tracks your day-to-day business operations and takes care of essential financial statements and reports.
  • This might include a knowledge of tax strategy, insights as to how you should structure your personal compensation to be tax-efficient, and more.
  • Even pre-revenue businesses require bookkeeping, and consistent recordkeeping is invaluable as you start to grow your business.
  • Everything your accounting firm needs to scale, increase profitability and spend time doing strategic work that results in sustainable business growth.

Enter some basic information about your current accounting needs and we’ll send you up to five customized quotes. With Bench’s Catch Up Bookkeeping services, a Bench bookkeeper will work through past months of disorganized bookkeeping to bring your accounts up to date. If your background isn’t in finance, a virtual financial assistant can help you make sense of financial documents and reports. Though not on the level of analysis a consultant or accountant will provide, they can explain terms or provide useful context.

Top 300 Accounting Firms

You can hire local bookkeepers or a bookkeeping team located near your company. The main benefits of such an approach include meeting with the bookkeeper face to face, using physical records, and relying less on online payment and banking systems. Many business owners hire full-time in-house bookkeepers, but this isn’t the most cost-effective solution. Outsourced, virtual bookkeeping can cost as little as $150 per month and as much as $900 (or more) per month. Some companies charge by the number of accounts you need them to manage, while other companies charge based on your company’s monthly expenses.

However, they usually offer some “assurances” that solo bookkeepers can’t. And, in the event that someone handling your books has to take a leave of absence, another bookkeeper can take over, so you don’t have to worry about service gaps. Outsourcing bookkeeping is cost-effective and will save your company money. Experienced bookkeepers are often better at finding overdue clients and cuts your company could make to increase overall profit. Plus, having an outsourced bookkeeper is more cost-efficient in the first place, since you’re not technically their employer. You won’t have to worry about their insurance, benefits, or training.

Transform Financial And Accounting Solutions With Partner Specialists

Bookkeepers are responsible for keeping record of all financial statements and transactions made by a business. They perform the preliminary functions needed in order for the accountant to do their job at the end of each period. Partnering with an outsourced bookkeeping service streamlines accounting and finance across every element of your business. Unsurprisingly, this leads to several clear benefits that add up to a significant value unlock for your business as a whole. At the same time, bookkeeping is a relatively manual, labor-intensive process that takes up a significant amount of time.

A CPA’s Guide to Sourcing Stellar Accountant…

For most business owners, one of the primary benefits of working with an outsourced bookkeeper is the cost savings compared to hiring an in-house bookkeeper. Outsourced bookkeepers work on a fractional basis, providing services as needed. By leveraging sophisticated accounting technology and well-developed processes, outsourced bookkeeping firms are able to deliver superior performance at a fraction of the cost of hiring in-house. The work of a bookkeeper is very important but it is primarily made up of relatively straightforward data entry tasks. Bookkeeping is regarded as an entry-level position, but the cost of hiring a full-time bookkeeper can still be expensive for small businesses. The average full-time bookkeeper in the U.S. earns approximately $45,000 before bonuses and other benefits – a key reason many businesses are exploring outsourced bookkeeping services.

Tax Season 2024: How Tax Preparation Outsourcing S…

If your company can’t afford an additional salaried team member, it pays (literally) to outsource your bookkeeping. The biggest advantage is that it removes a time-consuming yet critical business task from your plate, giving you more time to focus on mission-critical tasks and opportunities for growth. Assuming you find a good bookkeeper or bookkeeping service, you’ll no longer need to worry about things like inaccuracies or falling behind on your books. Suppose you have decided against outsourced accounting and have opted to tackle the financial responsibilities of your small business yourself.

Elevate your hiring process with Job Description Generator – a tool to create customized, compelling job descriptions, attracting the right candidates effortlessly. An audit is an appropriate and genuine way to identify the current financial status of a company that further helps in its growth and increases its credibility for… Our team has proficiency across all the major software used by CPAs in the US. In tax season or other busy periods, we enable US CPAs to quickly scale up with us to meet staffing shortages. US CPAs can eliminate operational bottlenecks & streamline workload through our quick turnaround time and 2 stage review process. Sales, production, and employee retention are all extremely important.

Then you can turn to accounting firms and tax professionals for just tax preparation, reducing your overall costs. Virtual and outsourced bookkeeping and accounting services are a happy medium between do-it-yourself software and pricey in-house bookkeeping. If that description fits what you’re looking for, one of the nine best virtual bookkeeping providers can save you time, money, and stress. Where outsourced bookkeeping services focus on granular, day-to-day data, accounting uses this data to analyze the big picture. Accountants often deal with tax preparation, audits, compliance, and high-level account analysis. Unsurprisingly, about half of the businesses that outsource include financial services in their outsourced tasks.

Whether you’re hiring remotely or within your area, someone working in Boston is bound to charge more than somebody in Omaha. Seamlessly hire global talent and teams via our vetted freelancers, traditional outsourcing, and direct placement–all while staying 100% compliant. All users of our online services are subject to our Privacy Statement and agree to be bound by the Terms of Service. Outsourcing a task that includes your financial information can be particularly daunting and a potential business risk. Develop contingency plans to address potential risks and challenges. Be prepared for unexpected events that could disrupt the outsourcing relationship.

Outsourcing your bookkeeping to an accounting firm ensures that your business’s financial data is organized according to best practices. Outsourced accounting firms tend to use cloud-based bookkeeping technologies that provide business owners with a real-time overview of their business’s financial position. When it’s time to pay taxes, an online bookkeeping service can offer you a year-end financial package. This will include all the financial statements the accountant needs to file the small business tax return. Virtual, outsourced, and online are often used interchangeably when referring to bookkeeping and accounting. However, a virtual bookkeeper or virtual accountant can sometimes refer to accountants or CPAs who work out of their homes and contract out their services individually.

One of the primary benefits of outsourcing your bookkeeping needs is the potential for cost savings. As great as it is to talk about potential bookkeeping costs and get estimates, we know that seeing an actual average for your state can yield excellent value for you as a business owner. Please see the chart below with data pulled directly from the US Bureau of Labor Statistics 2022 data to learn more about the average salary and hourly rate for bookkeeping. There is no magic number to know when you’re ready to take on a bookkeeper for additional support. Instead, it’s more of a holistic view of time, resources, and the ability to become more efficient that will make or break your decision.

That said, most outsourced bookkeepers won’t be able to advise you on the finer points of legal compliance, especially if your industry is subject to complex government regulations. An outsourced bookkeeper can assist you with tax preparations or filing for various industry-specific requirements, but there are limits to what they can do. Generally speaking, they can prepare data for you beforehand, or accomplish certain forms, so that the submission process goes more smoothly. You can’t run a business without managing finances; that much is true. Though that doesn’t mean you have to enjoy it⁠, and many business owners don’t.

Finally, make sure you’re prepared to share your financials with a third party. We know that can be scary, that’s why it’s important to choose a top-tier outsourcing service. That’s why we want to take a moment to outline not only the benefits but also the drawbacks and challenges of outsourcing your bookkeeping. When you outsource your bookkeeping you can rest assured that you’ll have all of the correct information to provide to an accountant or EA. Additionally, when you have accurate books, you can qualify for write-offs that will save you money when you go to file your taxes. With all of this talk about finances and financial reporting, taxes come to mind.

With the right partner, it’s possible to mitigate these downsides entirely, but to do that, you need to be aware of what to be on the lookout for. These are all expenses that go into hiring an employee, and if you want to run accounting entirely in-house, it’s likely you’ll need more than one how bonds work team member. All outsourcing companies have unique qualities but differ in many ways. It’s best to create a pros and cons list of companies when outsourcing bookkeeping so you’ll know you’ve made the best choice. Earlier in the article, we discussed different ways to outsource bookkeeping.

Engin Kunter

Leave a Reply

Your email address will not be published. Required fields are marked *