When running a business, you must stay on top of your finances. This financial responsibility can be challenging, especially if you’re not an expert. Fortunately, there’s outsourced bookkeeping to help you out.
Bookkeeping is a critical aspect of business operations but is time-consuming and complex. Outsourcing your bookkeeping frees up time and resources, allowing you to focus on growing your business.
Let’s take a closer look at why outsourced bookkeeping is becoming increasingly popular in the business world.
What is outsourced bookkeeping?
Outsourced bookkeeping is like outsourced payroll management—when a company or business hires a third-party service provider to handle its financial bookkeeping needs.
Instead of an in-house bookkeeper or accountant, the business owner or manager contracts an outside company or individual. These contractors manage financial data, prepare financial statements, manage accounts payable and receivable, and perform other financial tasks.
What are the benefits of outsourced bookkeeping?
Saves you time and money
It may seem counterintuitive, but paying for an outsourced bookkeeping service can be more cost-effective than hiring an in-house bookkeeper.
When you hire an in-house bookkeeper, you must provide them with office space, equipment, benefits, and a salary. These costs add up quickly and become a significant expense for your business.
On the other hand, when you outsource your bookkeeping, you only pay for the services you need. There’s no need to worry about the overhead costs of hiring an in-house employee.
Provides expertise and experience
Let’s face it, not everyone is a bookkeeping expert, and managing your own books is time-consuming and stressful. When you outsource, you leave your bookkeeping with experienced experts.
These experts are well-versed in bookkeeping principles, tax laws, and accounting regulations. You can ask them for valuable insights and advice to help you make informed decisions about your business’s financial health.
Increases your data accuracy and business compliance
No one wants to receive a letter from their tax regulatory boards calling you out for tax mismanagement. By outsourcing your bookkeeping to professionals, you can maintain accuracy and compliance in your financial reporting.
These professionals have the tools and technology to ensure books are up-to-date, accurate, and compliant with all relevant laws and regulations. They can also identify and rectify errors in your financial statements before they become bigger problems.
Provides your business with scalability
As a business grows, so do the financial transactions. Outsourced bookkeeping companies have the resources and expertise to handle increased volumes of financial transactions. This increased capacity allows businesses to manage their finances more efficiently and effectively, regardless of their size or stage of growth.
Improves security
Professional bookkeeping firms have robust security measures to ensure safety and privacy. They use the latest encryption technologies, firewalls, and data backup solutions to protect your data from cyber threats and unauthorised access.
Additionally, they have protocols to ensure that your data is handled securely and complies with industry standards and regulations.
Reduces risks and costly mistakes
Correcting financial mistakes is expensive and time-consuming. When you work with an outsourced bookkeeping firm, you benefit from the expertise of experienced professionals. Their knowledge helps avoid mistakes and ensure your financial records are accurate and up to date.
Offers flexibility
You have many options with outsourced bookkeeping. You can outsource only specific bookkeeping tasks or your entire bookkeeping function.
You’re free to select the level of service that best suits your business needs, whether it’s basic bookkeeping, financial reporting, or tax preparation. You can also opt for a customised bookkeeping solution tailored to your business’s unique requirements.
Is outsourced bookkeeping safe?
Yes, outsourced bookkeeping is completely safe if you work with a reputable and trustworthy bookkeeping firm. Outsourcing your bookkeeping tasks can provide greater security than managing your financial records in-house. More than one-third of businesses contract out their accounting services.
When you work with an outsourced bookkeeping firm, you benefit from their investment in cybersecurity and data protection measures. Reputable firms comply with strict security and privacy regulations, such as the General Data Protection Regulation (GDPR) and the Payment Card Industry Data Security Standard (PCI DSS). Robust security protocols and the latest encryption technology protect your data from cyber threats.
Be sure to do your due diligence and research your potential firms thoroughly. Look for reviews and testimonials from other businesses, ask for references, and ask about their security measures and compliance with regulations.
We hope you can take your business to the next level with this information.