Do you know the 5 biggest benefits of outsourced bookkeeping services as a business owner? Before we look at these benefits, I want you to think back on some of the financial decisions you have made in the past. Did you make those decisions based on the information that was actually shown on your financial statements? Or, did you make these decisions based on what you think your financial situation was?
Outsourced bookkeeping services is a well-known fact to small business owners who are so busy executing what they love doing, that they often do not pay the attention to what they should to their businesses financial situation. And that is a mistake that may cost a lot of money in penalties, overdraft fees, and interest payments.
Therefore we are not surprised when business owners ask us if outsourced bookkeeping services would help them to:
1. Understand their financial position better
2. Save money on late fees, penalties and interest payments
3. Make better financial decisions.
Have you heard the quote: “What gets measured gets managed?” Or, you may have heard it in a different variation such as “You can't improve what you can't measure”.
Consistently managing your business finances is one of the most important management activities that you have since no business can function without capital to invest in essentials such as material, people, and technology - to name a few. In other words, having correct and up to date financial statements (and understanding them) could help significantly to manage your businesses financial resources.
Therefore, if bookkeeping services are not the core element of your business in terms of bringing in revenue and winning customers or you do not have competent people to manage it, then it’s imperative that you at least consider the benefits of outsourcing this function.
Bookkeeping/Accounting is necessary in every venture, business, company and even project. And, though it may not add direct value to your specific product or service, it should clearly show where money has been spent and what liabilities or assets remain. So, let’s look at the primary benefits of outsourced bookkeeping services.
Accounting is often synonymous with the company wallet. However, many business owners, business professionals or managers believe if they don't control accounting, they will lose control of the company itself.
This is simply not true. You can easily outsource the accounting function and still maintain a clear picture and control of expenditures and cash flow. Using outsourced bookkeeping services have the following benefits:
5.1 Freed Up Staff/Personnel
We frequently find that the bookkeeping / accounting function becomes a “hand down” activity. In striving to personally manage their businesses and finances, business owners becomes overwhelmed with all their activities and responsibilities. The easiest thing to do is “delegate” and before you can say “bookkeeping”, the business owner’s personal assistant is also the new business bookkeeper….
Your people don't have to be tied down trying to reconcile monthly statements and ledgers that they have not been trained to do. Employees were recruited to fulfill specific functions, tasks, or activities such as producing or selling or maintaining a product and/or service. Yet, many get tied up in administering the bookkeeping services. Outsourcing the bookkeeping function allows business owners to utilize employees for the tasks they were recruited for.
5.2 Enhanced Expertise
Outsource bookkeeping services to professionals with expert knowledge and experience in bookkeeping and accounting allows for more accurate and up-to-date financial statements. That means not only better documentation both for internal records and taxes, but also access to more in-depth interpretation of financial statements such as the Balance Sheet and Profit and Loss Statement and advice on financial decisions.
5.3 Second Set of Eyes
Providers of outsourced bookkeeping services have many years of experience in many other and related industries and often spot issues and ask questions that may get missed by those close to the activities. It is well known that outsourced providers are key in detecting and catching fraudulent and questionable activities early on so a company can stop an issue before it has a chance to become a major problem.
5.4 Professional Tax Representation
Frequently outsourced bookkeeping services can do much more than just regular bookkeeping and accounting services such as preparing Profit and Loss statements, journaling all financial activities, managing accounts receivable and accounts payable. These professional providers of bookkeeping services are often qualified to also prepare and submit a company’s annual taxes, represent businesses with the IRS during an IRS audit, or help with their annual financial planning, budgeting and tax preparation services.
5.5 Meeting Reporting Deadlines Timely
reporting deadlines are critical for businesses as missing them often goes
hand-in-hand with penalties or interest payments. Employing the services of an
experienced bookkeeping service goes a long way to ensure that the right
bookkeeping principles, policies, procedures, and deadlines are applied to the
accounting function. This ensures that your financial reporting deadlines are
met in a timely and consistent manner.
businesses bookkeeping and accounting actions do not have to be a burden. Asking
the right questions and checking past experiences could help to identify an
outsourced bookkeeping services provider that complement you and your business.
Stephanie Horne is an experienced bookkeeper and Enrolled Agent. She is the owner and founder of Horne Financial Services in Rohnert Park, California along with this website and has over 20 years of in person, virtual and outsourced bookkeeping/accounting and tax preparation experience with businesses of all sizes.
Her love and passion is to work individually with business owners and families to help alleviate any financial stress or concerns by helping them to understand and have better control of their income, expenses, cash flow, and tax liabilities. She can be reached through her Horne Financial Services Facebook page as well.