Should I outsource my bookkeeping? If only we have a dollar for every time we’ve been asked this question.
Let’s face it. It’s a very good question. If bookkeeping is not your strong point, then our unwavering answer is: Yes!
Even if you are good at accounting, do you want to spend your time managing financial transactions, checking the accuracy of reports, preparing documentation for tax returns, and shifting through paperwork when you have other pressing matters to attend to?
Your primary focus should be on your business - selling and taking care of your customers’ needs.
Bookkeeping is also important because, without it, you haven’t got a clue about whether you’re profitable and what you need to do if you’re not. So, it does have a tremendous impact and value.
The question is not so much “Should I outsource my bookkeeping?” but rather, “What’s the value of keeping clean books for your business?” Once you have that answer, you’re ready to make your decision.
If you’re ready to sign on the dotted line now, schedule an appointment with Hall Accounting Company. We have dedicated bookkeeping services for small businesses that include tax planning and preparation. Our team of skilled accountants will take care of your books while you do what you love.
Let’s take a look at what outsourced bookkeeping services are, what benefits they hold for you, the various options you have, and how much you can expect to pay for professional accounting services.
The 4 biggest benefits of outsourcing bookkeeping
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1. The monthly bookkeeping will get done!
You would be surprised how quickly things can get away from you. One minute you intend to capture financial data in your accounting software, and the next, it’s been six months and you haven’t done anything. Now you’re faced with a backlog, finding documentation to support your financial transactions, and possibly a looming tax deadline.
You know you’ll be spending hours catching up once everyone else has gone to bed and probably losing a few weekends as well. It’s added pressure you just don’t need.
If you use an outsourced bookkeeping service this scenario simply won’t happen. Why?
You’ll send your documentation to the accounting firm, and they will take care of the data capture, cross-checking financial information, reconciling your bank accounts, preparing financial reports, and tax preparation.
Bookkeeping is about more than generating invoices, getting paid, and logging the payments in your bookkeeping software. You can make any number of mistakes while you do these simple tasks and a qualified bookkeeper will spot mistakes straight away. They will also know whether you are claiming allowable expenses and doing anything the IRS would reject.
Save precious time by outsourcing your bookkeeping. Give Hall Accounting Company a call.
2. Accurate financial reports
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Monthly bookkeeping is the cornerstone on which accurate financial statements are built. You make business decisions based on these statements and other financial reports, but you can’t do any of that if you don’t pay attention to your bookkeeping process.
How profitable are you?
For instance, you need an accurate cash flow statement because it breaks down the inflow and outflow of cash over a certain period. Cash transactions related to your company’s core business activities such as income received from sales and cash paid for expenses.
If you know when and how cash moves in and out of your business you can predict future cash flow trends and put plans in place to accommodate these trends. Also, understanding the liquidity of your business gives you the power to make decisions about inventory and investment in equipment.
Profitability is about much more than just looking at your bank account to see if you have any funds. In fact, making decisions purely based on what you can see today is sure to lead to a financial disaster at some point.
Outsource your bookkeeping, and you won’t have to deal with the Titanic going down because you’ll have listened to the sound advice of your bookkeeper based on real numbers.
Get a online quote for bookkeeping services from Hall Accounting Company.
“I entrust my personal as well as my 3 other businesses to Hall Accounting. Jeremy is by far the best CPA I have ever worked with - and he demystifies my financial quandaries with ease. He’s an incredible professional in every sense of the word. You’ll be lucky to work with him!!”
Flip Croft-Caderao
3. Tax planning and preparation
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Tax planning - your secret weapon
Too many small business owners have faced the frustration and stress of completing a tax return and then being faced with a huge tax bill. They haven’t made any use of proper strategies for reducing their tax liability and they find themselves in hot water and unable to pay their taxes.
We can only look on in sympathy as they relay their woes to us, and assure them that they’ve made the right decision to outsource their tax planning to our accounting firm.
A CPA firm that also offers bookkeeping services is the ideal way to prevent this kind of thing. They will not only keep your monthly bookkeeping up-to-date but also know how you can reduce your tax liability. Wouldn’t it be better to benefit from these reductions yourself or plow the money back into the business than give all your hard-earned profits to the IRS? This is exactly what tax planning services are about.
With quarterly projections, you can adapt your tax strategy before it’s too late. No more nasty surprises during tax season.
Tax Preparation
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Many of our SBO clients love this service. The tax filing process becomes easy, and some even look forward to it—if you can believe that!
Here’s what they have to say:
“Wonderful experience at Hall Accounting. Jeremy was awesome. He’s very knowledgeable, organized and efficient. He was prompt with responses to all of our questions and got our taxes done in a very timely manner. Would highly recommend Jeremy for all of your tax needs- big or small!”
Lauren Kelling
“ I honestly can't leave a great enough review. I've used Turbotax for the past several years and have gotten their top packages. I thought that was the gold standard for making taxes easy. After using Hall Accounting, I can say I have never had an easier or more fluid experience and this is now my gold standard by far. I think I may be looking forward to the next tax season for the first time in my life.”
- DCL Curations
Tax compliance will become much easier when you hand it over to a bookkeeping and accounting firm. They will worry about new tax laws and regulations, and if you do have an outstanding IRS dispute, they can negotiate with the IRS on your behalf.
Each state has different tax regulations, and if you have an e-commerce business that transacts across multiple states and even internationally, they will make sure your accounting software can charge the appropriate sales tax. All you need to keep your eye on are your business objectives.
Hall Accounting offers small business owners tax planning and preparation services. You can sign up for these when you outsource your bookkeeping to us or use it as an ad hoc service. Call us for a consultation.
4. High level expertise
Even if you hire an in-house bookkeeper, that still doesn’t give you all the expertise you could have if you outsource bookkeeping to an accounting firm. They have bookkeepers, tax experts, and CPAs, to name a few. Their combined knowledge and experience will be available to you. So it won’t matter what financial challenge you are facing; you won’t have to do it alone. That’s comforting, isn’t it?
Types of outsourced bookkeeping services available
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There are many types of services available to suit every SBO’s budget. Here we discuss the three most common services.
Collaboration between client and bookkeeper
Many times this takes the form of an online bookkeeping service where the SBO and the bookkeeper have access to the accounting software and input financial transactions. It might look something like this:
Small Business Owner | Bookkeeper |
Creates invoices | Reconciles invoice payments to bank statements |
Receives payment and marks invoice as paid | Closes off open vendor bills |
Scans receipts, bills, and other documents into the accounting software | Adjustment entries and checking the accuracy of transactions |
Receives inventory and makes adjustments | Reconcile bank statements to credit cards and main bank accounts |
Creates new accounts in the chart of accounts | Manages documentation |
Views financial reports via the dashboard | Creates financial reports |
Authorizes complex transactions | Processes complex transactions |
The pros and cons of this type of outsourced bookkeeping service are varied and depend on the nature of the business transactions and the knowledge of the business owner.
A pro for you as the SBO is the level of control you have over the financial transactions and data generated. But on the downside, you still have to get involved, and one of the challenges for the bookkeepers is managing incorrect information and postings. Also, you would need to agree on the software you will use to give access to the bookkeeper. Many SBOs use a platform like QB Online because it is cloud-based accounting software and provides 24/7 access to accounts.
If you have a small number of basic financial transactions, a freelance bookkeeper providing a virtual bookkeeping service could also be a good option.
Want to collaborate with us? Book a free initial consultation now.
Total handover of financial transactions
This is where the bookkeeper has total control over the bookkeeping process from A-Z. As an SBO you may have access to the accounting software so that you can authorize transactions and view financial reports but you do not enter any information. You will likely also scan all documentation into the system, allowing the bookkeeper to have it on record and work with your financial information when it is suitable for them.
Ad hoc accounting and taxation services
Perhaps you have all your business finances under control after all but need someone to sign off your financial reports, or you want to use tax preparation services. Accounting firms do offer these ad hoc services, especially during tax season.
How much does outsourcing cost?
The question you’ve all been dying to hear an answer to, right?
The answer is that it depends on the type of service and pricing model of bookkeeping firms. Some common ways of charging for bookkeeping services are:
Hourly - work charged per hour.
Fixed fee - a fixed monthly fee based on a pre-agreed set of bookkeeping tasks.
Outcome-based fees - a fee is charged when an outcome is produced eg. when a balance sheet is produced.
A hybrid of one of the above options
Further reading: Cost to outsource accounting functions
It’s not always easy to establish a set amount for services for an outsourced bookkeeper. Most bookkeepers or accounting firms want to meet with clients to establish what type of services they want and the nature of their financial transactions. The more work involved and the more complex it is, the higher the fees will be.
In conclusion
Why should you, as an SBO, outsource your bookkeeping? Simply, you can’t afford to deal with the repercussions of not outsourcing.
When you consider the benefits of having a bookkeeping team that is dedicating their time and energy to ensuring your financial information is accurate and sound, it becomes the only reason you need to hand over this work.
The peace of mind you will get from knowing someone competent has it all under control and you can go ahead and focus on business objectives is much better than sleepless nights, don’t you agree?
Accountants love messing around with numbers; it makes their day when your books balance - so let them have their kicks, and you can get yours from the sales numbers.
Everyone wins. If you can find an accounting partner that will get as excited as you about your business successes you’ve found a real winner - stick with them. At Hall Accounting Company we’ve been pretty excited about small business all along. When you meet your business goals, we’ll make sure to celebrate with you, but let’s first get those books up-to-date, shall we?