Robust bookkeeping is critical for any organization. Beyond tracking daily transactions, bookkeeping services can include managing the company’s cash flow, payroll, budgeting, financial reporting and tax filing. Maintaining up-to-date, accurate records can be the key to long-term success. And yet, handling the books is a time-consuming process and having a full-time bookkeeper on staff can be expensive. Outsourced bookkeeping services may be the perfect solution.
Keep reading to discover the benefits of outsourcing bookkeeping, and call CFOshare to learn how we can get your company on track for future success.
What is Outsourced Bookkeeping?
To outsource your bookkeeping operations means to hire an outside company to handle your organization’s routine accounting. That means you don’t have the expense of hiring, onboarding, and supervising a full-time employee. Outsourced bookkeeping is typically handled by one of three types of organizations:
- Independent bookkeepers. These individuals are very cost competitive, but quality varies from person to person.
- CPA and general accounting firms. These organizations often employ industry best-practices and standard procedures to improve quality of service.
- Offshore organizations. These service providers operate out of India and other low-cost countries to lower client service fees.
The Cost of Outsourced Bookkeeping Services
How much does it cost to outsource bookkeeping? You’ll discover a wide range of costs for bookkeeping services, which can greatly vary by location, the services you need, and the level of experience desired. Are you looking for a single person or a team of professionals with different areas of expertise? Some services ask for a minimum monthly rate for a small business that doesn’t need many hours of work. Others may charge an additional rate for a payroll service “add-on.” A full charge bookkeeper can handle all accounting duties, such as preparing financial statements. Small to mid-sized businesses may find that a full-charge bookkeeper addresses their needs, rather than having to hire an accountant or controller.
How much would it cost your company to hire a full-time bookkeeper, and does it make financial sense to have a dedicated person in-house? According to PayScale, the average annual salary for a full charge bookkeeper is $48,972. Adding a full-time employee to your company payroll incurs other expenses, such as the employer’s share of FICA, federal and state unemployment taxes and workers’ compensation for a fully-loaded cost of $50-60k. Compare this with the cost for an outsourced bookkeeping firm, which typically offers hourly or monthly rates.
There’s a hidden cost to bookkeeping too – the cost of untimely or inaccurate books. Many outsourced bookkeepers are weeks or months behind on their tasks, leaving business owners without numbers to rely on. Even worse is timely but incorrect books resulting from lack of knowledge around GAAP or the plethora of data systems companies use like Shopify, Authorize.net, bill.com, and Gusto payroll. Without awareness to these errors, business owners risk making poor decisions for their companies.
When Should You Outsource Your Bookkeeping?
There are certain times in the life of your business when you might want to consider outsourcing your bookkeeping operations. These including the following:
- Early Days and Budget Concerns – You have a start-up and are trying to keep costs down until your business can grow.
- Strategic Planning to Get to the Next Level – Your company is interested in long-range forecasting, and you need high quality financials to support growth decisions.
- Time Management Issues – You are spending too much time managing finances at the expense of your primary business activities.
- Lack of Dedicated Personnel – A key employee is spending considerable time engaged in bookkeeping, which is not their area of expertise.
- The Need to Downsize – During a temporary downturn (such as the COVID-19 crisis), your company may be forced to lay off staff, but you still need quality bookkeeping services.
What is Included in Bookkeeping Services?
A good bookkeeping organization should tailor their approach to fit your business. Basic bookkeeping services can be as simple as keeping records of day-to-day transactions—or you may need help with payroll as well as your company’s tax filing, financial reporting and forecasting. In fact, that’s one of the advantages of hiring an outside specialist to do your bookkeeping — the ability to choose exactly which services you need at any given time, with the flexibility to add services as your business grows.
- Transaction entry & cash reconciliation
- Payroll accounting
- Accounts payable/receivable management
- Collections management
- Routine payroll and/or sales tax filings
- Full accrual based accounting
- Complete balance sheet reconciliation
- Maintenance of balance sheet schedules such as:
- Deferred revenue
- Inventory/work in process
- Accrued payroll liabilities
- Fixed assets and depreciation
- Tax assets/liabilities
- Monthly financial reporting
Benefits of Outsourcing Bookkeeping
The advantages of outsourcing your bookkeeping include:
- Free up business owners and key employees so they can focus on their business.
- Save money vs. hiring full-time, since there are no training costs.
- Be setup for scale by paying for exactly what you need, when you need it, with the ability to ramp up at any time.
- Have guidance from a team of professionals with years of financial expertise.
- Rest well knowing records are accurate and well documented for taxes and potential audits.
- Feel confident you have business continuity without the worry of losing expertise if an employee leaves the company.
Outsourced bookkeeping services save you money, time and effort.
Discover the Difference of CFOshare Bookkeeping Services
CFOshare offers expert bookkeeping and accounting services that are tailored to fit the needs of your business. You may choose from a wide range of financial services, including bookkeeping/accounting setup and support, cash flow management, budgeting, forecasting, gross margin analysis, capital strategy, and many other small business financial services.
Having your books kept up-to-date and accurate by accounting experts gives you the critical knowledge you need to develop your company and make smart financial decisions for future growth. Contact us today to learn more about our services.