Outsourced accounting, small business bookkeeping, and outsourced controller services have become a more common solution for small businesses today. Why? The advantages, which once were only enjoyed by mid-market and enterprise companies, are becoming understood by smaller companies.
With a remote, U.S. based accounting team, CEOs and business owners have access to knowledgeable, trained staff working to help their business run better, grow faster, and make more money. Often at significant cost savings vs. building an internal accounting department.
1. Experience Is Worth Its Weight in Gold
The biggest benefit to small business bookkeeping services has to be the experience of the accountant you work with. This is all they do. Unlike hiring someone in-house who may spend half their day answering phones, gossiping by the water cooler and playing on Facebook, bookkeeping services spend all day every day providing bookkeeping. How much better do you think they’ll be at it? Hiring a specialist to perform a specific function creates a lot of efficiencies.
2. Advanced Technology and Tools
The second biggest benefit to bookkeeping services has got to be the tools. These companies are chomping at the bit to earn your business. They’re constantly trying to come up with ways to create a better financial mouse trap. An in-house employee can get stuck in a rut due to the lack of competition.
3. Excellent Customer Service
The third benefit has got to be customer service. Bookkeeping services are vendors which means that customer service is assumed in the relationship. With an employee, entitlement often creeps in which can get ugly. As a vendor, the bookkeeping service knows it needs to earn your business or it will lose the account.
4. An Agile and Flexible Business
The fourth benefit is that you have a lighter and more flexible business. When you hire an employee, they take up space, require training and a host of other things to keep them efficient. Bookkeeping services absorb all of that plus the cost of payroll taxes, HR and more.
5. Consistency is Key.
The fifth benefit is consistency. If you have an in-house bookkeeper that gets hit by a truck, you’re up a creek. Good bookkeeping services will have a system in place to deal with emergencies. For example, at Ignite Spot, we create training manuals for each client so that if the accountant is sick, another member of our staff can fill in to keep your business running. Good stuff!
6. Reduce Chances for Fraud
Fraud is an unfortunate result in many small to medium-sized businesses with one person at the helm of accounting. That’s because it’s easy to manipulate the books or have a fake expense go unnoticed for months, or even years. There are multiple warning signs that can indicate fraud and are oftentimes because of a hardship an employee’s going through, where they feel financial pressure and don’t know what else to do. Don’t just blindly trust your employee without any controls or accountability – it’s a surefire sign to leave you wide open for fraud
Potential Cons of Outsourced Bookkeeping Services
1. Loss of Control
Some business owners who have been holding accounting closer to the chest tend to worry that out of sight will mean out of mind. After all, your financial performance is a great place to uncover insights that have broader implications for your business’s efficiency.
This is why it’s good to maintain transparency with regular meetings with your accountant or CPA. We recommend scheduling a check-in each month, or at the very least each quarter. The goal of outsourced accounting and bookkeeping is to relieve you and your team from the manual data entry and report building, which is ultimately not the best use of your time. It’s not to keep you in the dark. An experienced small business accountant should be even better at identifying key business takeaways from your company’s financials and bringing them to your attention.
2. Expectation Gap
The third con has got to be the expectations gap. You’ll want to work with a bookkeeping service that knows how to manage this. With accounting, if you expect one thing to happen and your bookkeeper misunderstands you and does something else, you’re going to be frustrated. The fact that you can’t look over this person should to make sure they’re on task can get tricky.
3. Not Local
There are, of course, benefits to having an employee in-house to answer questions immediately. While an outsourced team is available, answers may not always be instant. There may be limitations from not being in the same office. But with the right small business bookkeeping service, they should have good communication policies in place to ensure your team is available and easy to reach. It’s important to weigh the options on what’s the highest priority – an instant response, or the due course taken to get the right answers.
Choosing the Right Accounting Solution for Your Business
The right small business bookkeeping provider will help your business thrive, and there have never been more options for outsourcing your accounting, taxes, payroll, and other back-office duties. Before you jump into a contract with the first business accountant you meet, take the time to research all of your different options to identify what will work best for your specific business.
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