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Outsourced Bookkeeping...It Just Makes Cents!
Outsource your bookkeeping, you may not be able to afford not to! Many small business owners do not realize the benefit they could obtain by outsourcing their bookkeeping to a professional provider.
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A lot of small business owners start out doing the books themselves. This allows them to keep control of all the details surrounding their finances. This is great for the short-term but not beneficial in the long term when the business owner should be doing the work that the business was started for and not the administrative tasks of the business. Once the business grows, most business owners find it hard to let go of all the tasks they were doing. It is critical that the business owner remain focused on his or her core strength that will help the business grow and succeed and not focus on the administrative tasks.
The business owner then finally gives in to the mounting paperwork that he or she no longer has time to do properly and most likely hires a part-time employee to assist with the bookkeeping. (In order to get qualified help sometimes full-time employee status is required.)
A part-time position or a full-time position now requires pay plus benefits. In addition, the person may need vacation, sick, and other personal time off during the course of a year. Most likely your position is the only job this person has so there is no transfer of knowledge from other current employer situations to benefit your company.
Also, if this is a business owners first employee then a host of other reporting requirements are now necessary such as workers compensation, disability, quarterly payroll tax returns, etc.
After hiring the employee, the business owner is finally free to focus on running the business. However, the employee must be trained, supervised, and given enough work to stay busy. So it is still time consuming for the business owner but in a different capacity now.
A more effective solution would be to outsource the bookkeeping function to an experienced professional. A professional knows what needs to be done and what reports/returns need to be filed when, and most likely is even more knowledgeable then the business owner in this regard. No training or supervision is required and once the work is completed the professional moves on to serve other clients needs. In addition, the professional carries with him or her a wealth of experience from other current clients and also brings up to date knowledge obtained from continuing professional education.
The fee the business owner negotiates with the professional initially may seem higher than the going rate for an average hourly bookkeeper but keep in mind there are no additional “hidden" costs such as payroll taxes, insurance, etc. and no cost for downtime or inefficiencies. If the business owner considers the cost vs benefits provided over a monthly, quarterly, or yearly time frame it should become clear which choice provides the most value to the business.
In every situation a business owner encounters it is important to collect all the relevant information and review that information in order to make an informed decision. The information provided should prove relevant in you bookkeeping decision. Please make the right decision for the success of your business!
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