For any business owner, staying on top of all that company paperwork is important. Keeping track of financial records is critical when it comes to understanding cash flow and tax filing. An outsourced bookkeeping service can not only save time and money but ensures that, as a small business owner, you stay on top of all financial matters.
Outsourcing bookkeeping is an increasingly attractive option for businesses of all types. While employing someone in-house has its benefits, it can be the least cost-effective way to operate, especially for small and medium-sized businesses.
Outsourcing accounting services gives you access to high quality expertise and can save money in the long-term. It means you keep your financial records records up to date at all times but are able to focus on the most important thing – running your business and making it a success.
What is bookkeeping?
Bookkeeping is the systematic keeping of records relating to your business or organisation, mostly including financial records. It is the daily detailing of incoming and outgoing assets relating to your business such as invoices, accounts payable and payments to suppliers.
Bookkeeping is different from accounting which has a much wider remit in helping business owners to see how their company is doing at any one particular time and the financial data and insights and tools they have at their disposal.
Can I do bookkeeping myself?
Many small business owners do manage their own bookkeeping and there is a wide range of useful accounting software available today that makes this much easier. Accounting tasks, however, can be quite time consuming and, depending on the type of small business that you run, could well get in the way of much smoother operation.
How do you outsource bookkeeping?
One of the easiest ways is to sign up for an online bookkeeping service. These are becoming increasingly popular and offer various different services at affordable prices. That means you can tailor the service to your own business needs, ensuring you have complete tax compliance and all the information you need when it comes to completing your returns.
You can either decide to hire a freelance, local bookkeeper or work with a bookkeeping service that operates online. Using a larger accounting firm may well give you access to much more expertise as well as helping keep the costs down.
Benefits of outsourced bookkeeping services
Many small business owners are beginning to see the benefits of outsourcing their bookkeeping services to a professional team. Apart from potentially reducing staffing and operational costs, benefits also include:
1. Access to expertise
One of the major plus points of outsourcing your bookkeeping services is the access to a higher level of expertise. Most business owners will often struggle with the nuances of financial statements and cash flow because they are not trained accountants.
It can mean that mistakes get made which cost the business money, either because the person in charge of accounts doesn’t have the right skill set or simply lacks time to do a proper job. Outsourced accounting services give you immediate access to the skilled professional service you need to make sure that all the bases are covered.
Hiring experts who know what they are doing means that invoices are input on time, payroll goes through smoothly and, when it comes time to do your tax returns, everything is there for you.
2. Flexibility and scalability
As we’ve all seen in the past couple of years after the pandemic, businesses can suffer serious setbacks and coping with these is very challenging. With an onsite accounting department, if there is a sudden fall in revenue for whatever reason, you may have to lose some staff to make things economically viable.
With outsourced bookkeeping, you don’t have this problem. Most services are designed to be flexible to your needs and can be scaled up or down depending on the circumstances.
For example, if you are looking to expand your business into other areas, you don’t have to also look to grow your inhouse staffing levels for the accounts department. Instead, you simply approach your outsourced bookkeeping service to expand delivery.
3. Fewer staff needed onsite
There’s no doubt that office space and staffing can be a challenge for any new business owner. Because the accounting service is delivered by a third party, you don’t have to worry about who you have in place in your office or who you might need in the future.
You also don’t need to worry about obligations such as sick and holiday pay, paying National Insurance contributions or sorting out payroll for staff. It can all be handled by the company you choose to partner with. This provides a significant cost and time saving for your business and less effort spent occupied with menial tasks.
4. Greater security
When it comes to accounting, if you are employing someone locally you are also putting a good deal of trust in them. Most security breaches for small businesses come not from software and online threats but people working within the environment. Most outsourced bookkeeping services are highy secure and use the latest state-of-the-art accounting software.
Frequently Asked Questions About Book Keeping
When should you outsource accounting?
Outsourcing your accounting can have numerous benefits but opting to move your financial transactions and tax preparation to a third party can be a big decision. Whether it’s to free up your own time or reduce your dependence on an inhouse accounting team, it can also be a turn-key moment for your business.
What is the difference between accounting and bookkeeping?
Accounting covers all the financial information relating to your business from invoicing and paying bills to filling out that all important tax return. Bookkeeping services are part of accounting but are more about recording and organising finanical details than anything else.
Accounting is much broader and gives you the chance to gain insights into how your business decisions are working and helps you make the most of your operation.
What can a bookkeeper not do?
Bookkeepers are limited in what they can do and generally are only involved in recording and organising financial information for your business such as noting invoices and calculating profit margins.
They do not provide advice about business growth or how to reduce your tax burden each year as an accountant often does.
When you outsource your bookkeeping, there are several benefits, not least helping you to spend more time on running your business while potentially reducing the cost of employing someone in-house and improving productivity.
If you’re interested in seeing what a professional team of accountants can do for your business, contact the team at VW Taxation today to find out more.