5 Benefits of Outsourcing Your Bookkeeping With GoStravo

Introduction

Bookkeeping is a task that seems simple enough, and with the passing of time, the expenses mount up. The hundreds of receipts from different clients, the reconciled balance of the bank account, the bills you need to pay, and the accounts to be reconciled will tie you down and tie you in knots before you know it. This removes hours of your business owner's time that could've been spent managing the core operations of the business.

For instance, if you are a small business owner, you need to take out some time to ensure that your revenue is properly handled. In addition to other duties like working with customers, sales, and employees, these extra tasks could be a strain on an already busy schedule.

The reasons for avoiding external bookkeeping assistance are as valid as those for considering outsourcing. While the idea that it would be cheaper to do it yourself crosses the mind of many business owners, many others fear the idea of sharing their financial information with outsiders. Nevertheless, keeping bookkeeping in-house might not be the best option.

Outsourcing means delegating specific tasks relating to accounting and financial record-keeping tasks to other parties. It entails hiring a third party to handle any or all of a company's accounting and bookkeeping duties depending on the requirements of the service contract. Some examples of these duties are invoice preparation and processing, recording and analyzing financial data, bookkeeping, and report generation.

However, outsourcing bookkeeping duties can benefit companies beyond providing well-maintained financial records. It can provide advantages such as time-saving, cost-saving, higher accuracy and efficiency, access to experts, and scalability.

Therefore, it is no surprise why many businesses are embracing the aforementioned idea. In the following five points, you'll find some of the benefits of outsourcing your bookkeeping.

1. You Can Save Time and Focus On Running Your Business

Time is the most valuable asset of any small business. That is why any hour that is not working on the development of your venture is an hour that you lose. You might need that additional time to talk with some customers, make more sales, develop your current goods or services, or even create a plan for the future development of your business.

The fact that bookkeeping needs to be done does not necessarily mean that you have to do it yourself. By delegating this task to another person or organization, you will save a considerable amount of time that you would spend on it anyway.

It might not seem like much, but in the end, if you calculate how many hours per month or even per year you spend on bookkeeping, you will realize that it is quite a considerable amount.

For example, if you spend about four hours per week on bookkeeping, it means that every month you will have 16 hours of additional time and over 200 hours at the end of the year. These are all hours that you can spend on something significantly more important and profitable than on the bookkeeping tasks. It is important to note that in the report from BILL the time-saving aspect is also mentioned as one of the main advantages of outsourcing accounting.

As stated in the article, by using external professionals, such processes as reconciliations and other recurring tasks can be transferred to them, which will give you more time for your own work and development of the business.

However, it should also be noted that while delegating your bookkeeping tasks to others you are not entirely freeing yourself from responsibility for your finances. You should always have a general understanding of your numbers and know what amounts of money are involved in your business on a regular basis.

The only difference is that you will not spend hours and hours a week or even a month entering your data into journals or programs.

2. Outsourced Bookkeeping Helps Reduce Business Expenses

Many small business owners think that getting bookkeeping assistance from outsourcing will incur higher business expenses. What these people fail to realize is that the opposite is true in many cases. Think of the expenses that will come with hiring someone internally. Besides the person's salary, there are recruitment, onboarding, benefits, payroll, software, equipment, training, office space, management, and other costs. And do not forget the need itself for someone to start with.

If you are an expanding company that often needs bookkeeping assistance but does not have enough work for a full-time employee, you can use outsourcing to buy the particular degree of assistance you need. Centri Consulting underscores cost efficiency as one of the prime reasons businesses choose to outsource their accounting needs. It mentions companies can save by avoiding the costs of unutilized headcount and enjoy the benefits of the technology stack that an external provider has already implemented.

BILL further suggests considering costs when deciding whether to use an external bookkeeper. In the guide, it notes an in-house accounting employee would bring additional benefits, such as salary, paid time off, onboarding, and training, on top of the direct costs. Of course, when it comes to expenses, outsourcing is not always a cheaper option. Still, it will require you to thoroughly research the market and compare prices.

When doing so, it is important to reframe the question.

"How much will it cost to hire an outsourced bookkeeper?"

"How much will it cost me to maintain bookkeeping services in-house?"

This will give you a more realistic idea of the price you are paying.

For instance, if you have accounting software that requires training, employee time to input information, and the possibility of errors that need correcting by an accountant, these costs combined together may well be steeper than simply hiring an external agency. In this instance, an outside provider would offer bundled solutions that make bookkeeping more predictable and, therefore, more cost-efficient. This will free up funds for other priorities, such as marketing, employee training, technology, and growth initiatives.