Outsourcing bookkeeping services is becoming a viable solution in the business world. It involves hiring external bookkeepers to manage your financial records and accounting tasks. This approach is cost-effective, ensures accuracy, and allows businesses to focus on their core operations.
In this article, we will discuss the importance of bookkeeping, outsourcing services, what to expect from it, and how to choose a provider. By the end of this article, you can decide whether to outsource bookkeeping services for your business. Let’s begin!
Why Outsource Bookkeeping Services: 3 Main Reasons
Let’s begin by discussing why outsourcing bookkeeping services is better than hiring in-house staff or a freelancer—some of the more common choices business owners like you have for bookkeeping and accounting.
Reason #1: Cost-Efficient Accounting Services
Prime among the reasons you should partner with an agency is cost-efficiency. With an agency, all you need to worry about is paying the monthly fee. You can skip the added work and costs of training, and you do not have to worry about employee incentives and benefits. The agency handles all this.
You can also save time and effort on recruitment.Agencies have qualified bookkeepers and accountants, though you can check their credentials if you want to.
Reason #2: Get Insights From Experts
Two heads are better than one, they say. When partnered with an agency, there will be a dedicated team to manage your account. A bookkeeper will make sure to use the latest bookkeeping and accounting tools. From QuickBooks and Xero, tax software like Avalara and Taxomate, to document management software like Hubdoc—agencies have all these tools to ensure your books are up-to-date and organized.
If you aren’t trained in accounting, a dedicated accountant will create easy-to-understand reports. They also have the skill to explain the charts and statements in detail for you to understand your business finances. Most of all, they can give live insights and advice on how to run your finances. Nevertheless, you get the final say.
Reason #3: Time for Other Essential Business Tasks
Last but not least, among the reasons outsourced bookkeepers and accountants are the way to go is that you get more time for other essential business responsibilities.
While you go about your day-to-day business operations, financial management and other bookkeeping and accounting must-dos are handled simultaneously by a dedicated bookkeeping and accounting team. As the business owner, all you have to do is make it a habit to check the accuracy of the details in the books; the rest can be delegated to your partner agency.
Bookkeeping, Outsourcing Services, and What To Expect
Outsourced bookkeeping services are ubiquitous, and you’ve probably already considered them for your business. To tip you over, here are the services you can expect when you partner with a third-party bookkeeping and accounting firm.
Outsourced Bookkeeping
As a business owner, you have a lot on your plate. While it is manageable to do the books on your own in the beginning, your business transactions will grow as you scale your business. After signing up for a virtual bookkeeping service, you won’t have to worry about tracking your business financial transactions independently.
The agency will handle your books. Depending on the offer, the agency can track month-to-date income and expenses even if you sign up later in the year. From then on, all your business transactions will be monitored.
Utilization of Accounting Software
The best outsourced bookkeeping has the best accounting software to perform their tasks efficiently. Accounting firms invest in the following technologies to optimize their operations:
- Optical Character Recognition (OCR) Tool: This tool ensures that bookkeepers do not have to input details from receipts and documents manually. All they need to do is take a photo of the document, and the details will be automatically converted to computer text.
- Tax Software: Taxes differ in every country and even at the provincial and state levels. Tax software ensures that tax computations and sales tax rates used for your business are always the most updated.
- Bookkeeping and Accounting Software: An outsourced bookkeeping firm also invests in the latest bookkeeping and accounting software to streamline data collection and organization.
When looking for a firm to partner with, check the different software they use to manage your business finances.
Business Planning and Forecasting
Business planning and forecasting is another essential task covered when you partner with an agency. This data will help you create business plans to maintain the numbers you have or scale earnings to grow your venture further. They will make the most of the historical and recent data that you already have to foresee how your business will look in the future.
Keep in mind that these forecasts aren’t 100% accurate. They are subject to change, but they will still give you an objective view of your finances on a future date.
Payroll Management
Of course, once your business grows, your team will also expand as you need expert minds and hands to help you with your day-to-day operations. Ensure that your employees are compensated correctly and are paid on time by delegating the task to an outsourced bookkeeping service.
Through their software and expertise, they can track the time rendered by employees, project costs, benefits, incentives, and taxes to come up with the computation of the final payment.
Your workers will automatically receive their salaries, too, as the software is connected to payroll apps or banks that can deposit money straight from your account to theirs.
Tax Management
Taxes are one of the most dreaded tasks of business owners. The reason behind this is the complicated tax rates that change from time to time, especially when it comes to sales taxes. When it comes to taxes, bookkeeping, and accounting, inaccuracy is a mortal sin. Not having the correct numbers defeats the purpose of the task and keeps business owners as you blinded to the actual financial status of your venture.
But with proper services, all the income and expenses of your business will be tracked, so computing your gross income on a tax rate basis will be easier. Agencies are also equipped with updated tax tools containing the latest sales tax rates, so the amount you’ll charge to customers will always be correct.
Ecommerce Bookkeeping Solutions
More and more business owners need ecommerce bookkeeping and accounting. You can also get this industry-specific assistance from a bookkeeping and accounting agency.
While you can expect the professionals who handle your account to be skilled in bookkeeping and accounting, they are also well-versed in how different ecommerce platforms—like Amazon, Shopify, Woocommerce, eBay, Etsy—work.
These ecommerce platforms already have a data center. But the agency will integrate the platform’s collected data into your main accounting system.
Financial Reporting
All the data in the bookkeeping and accounting software will be put into good use through the generation of these valuable financial reports:
- Balance Sheets/Statement of Net Worth: Get a glance at your business assets, liabilities, and equity through this financial report
- Income Statements/Profit and Loss Statements/Statement of Revenue and Expense: This report can give you insights into how well your business is performing financially.
- Cash Flow Statements/Statement of Changes in Financial Position: This report shows how money moves in and out of your account, where you are spending your money, and from where you are earning income.
- Statement of Owner or Shareholder’s Equity/Statement of Changes in Equity: This is the statement to check if you want to see the profits your business has made, retained profit, and how much is distributed to shareholders or given to you as the owner.
Virtual bookkeepers will ensure the data you need for these reports are complete. At the same time, remote accountants will create reports and give you suggestions and assistance on decision-making.
Bookkeeping Services by Unloop
Outsourcing bookkeeping services is a wise choice for businesses of all sizes. This cost-effective practice ensures accurate financial records and allows businesses to focus on their core activities.
We hope the common services offered by agencies mentioned above give you an idea of what you are investing in. In the end, opting for outsourced bookkeeping services instead of hiring in-house staff or freelancers will depend on what you need for your business.If you are wondering how to outsource bookkeeping services, call us here at Unloop. Our experts can handle your books. Talk to us today!