Good bookkeeping and accounting are critical to your business for several reasons. Your books provide information about how your company is performing. The more accurate and timely the bookkeeping, the better the information. Sending invoices promptly also affects your cash flow. Good cash flow is essential to operating your business.
While you can do your own bookkeeping, your business may not run as profitably as it should if you do so. As your business grows, so will the number of bookkeeping transactions. Yet, the more the business grows, the more time you’ll need to spend on that business rather than on backend operations such as bookkeeping. Outsourcing allows you to focus on growing your business while trusting your books to a highly trained specialist who can partner with you as you grow.
At first glance, it may seem that outsourced bookkeeping is an added expense for your business. However, the truth is that an outsourced bookkeeper can actually be more cost-effective than doing the books yourself. Consider the number of hours you spend on your books and multiply that by a reasonable hourly rate for a small business CEO. Then consider the opportunity cost of not spending that time operating your business. Clearly, outsourcing your bookkeeping is a good strategy.
An outsourced bookkeeper performs the following services;
- Records daily transactions so that you can devote your time to what you know best — your core business.
- Performs monthly account reconciliations to ensure accurate reporting of your financial status.
- Provides data entry such as payroll, expenses, and taxes. Data entry can be time-consuming for the business owner.
Accountants can help you see the big picture by providing financial intelligence you can rely on to make informed decisions about your business.
An accountant provides these services:.
- Monitors cash-flow and helps your forecast your cash situation better.
- Manages financial statement preparation and distribution.
- Provides strategic business advice.
One cost-effective solution is to outsource bookkeeping to a firm that also has accounting and business expertise.
Should I Outsource?
Can you do your own bookkeeping? Of course, you can. Should you do your own bookkeeping? No.
You want to outsource in these five situations:
- When the task isn’t your primary service of business
- When there’s no competitive advantage to doing the activity in-house
- When dealing with a specialized service you don’t do full time
- When the service can be done more efficiently by another person or company
- When the costs of the service are lower than the costs of doing the service in-house.
Focus on what you know best, which is developing your business and creating and improving your core product or service. Outsourcing allows you to be free of an in-house burden, while simultaneously switching the task to a firm of financial experts. Spending a few extra dollars a month will save you time, which equates to money. You’ll also have financial insights that will create momentum to grow. Whether your business is a growth company or a fully-funded startup, outsourcing your bookkeeping can provide a scalable high-value solution.
Virtual Partners provides bookkeeping with an accountant’s (CPA) touch and a business-savvy strategic approach to helping you get organized to grow. Make a smart choice for your business and contact us today.