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As a small business owner, you’ve likely got a mile-long list of tasks to complete, from working with clients to marketing and billing. With all of your duties, it’s natural that you’d want to look for ways to take a few off of your plate. Enter outsourced bookkeeping.

Outsourced bookkeeping can save you time and headaches by contracting out your bookkeeping work to a third party. Use this handy guide to learn more about outsourced bookkeeping and how it might work for your business.

What is Outsourced Bookkeeping?

Outsourced bookkeeping puts your business’ day-to-day financial tasks in the hands of an experienced third-party professional. Unless you’re running an expansive enterprise with large numbers of clients, the bookkeeper will likely work on a part-time basis.

Note that there is a difference between a bookkeeper and an accountant. Bookkeepers record financial transactions and produce reports related to those transactions. These duties may include:

• Creating customer invoices and balance statements
• Paying invoices from vendors and other suppliers
• Recording payments that come into your business
• Reconciling bank account and credit card statements
• Processing payroll
• Producing monthly income and cash flow reports

Accountants, on the other hand, perform higher-level duties that are focused on maximizing your business’ profit. Some of the things accountants do include:

• Complete income tax returns to legally minimize your tax liability
• Help with financial planning and business strategy
• Provide advice on cost management
• Give expert advice on new investments or debts
• Perform audits
• Assess the overall financial health of your business

If you’re just looking for someone to handle the everyday financial tasks of your business, outsourced bookkeeping may be the solution you’re looking for. If you need a higher level of service, a third-party accountant may be more appropriate.

Why Should I Outsource My Bookkeeping?

The biggest advantage of outsourced bookkeeping is, of course, the time you save! Outsourcing your bookkeeping allows you to spend less time recording transactions and more time working to improve your business.

Other benefits include:

Lower staffing costs. There are many costs that come with hiring an employee. Even if they’re just part-time, you’ll still need to spend money on employment taxes, office space, and computer equipment. The employee will likely want to work a set number of hours each week, regardless of how much bookkeeping work there is to do.

When you outsource your bookkeeping, you only pay for the time it takes to complete the necessary work, and the bookkeeper can work in their own space, with their own computer — a win all the way around.

Reduced errors. If you choose a reputable firm for outsourced bookkeeping, they’ll provide expert staff who will be able to get up to speed quickly on your business’ financials and perform accurate work. This makes it less likely that transactions will be overlooked or entered incorrectly, either by yourself or an inexperienced employee.

Up-to-date books. No more ledgers that are weeks (or months!) behind. Hiring a third-party bookkeeper ensures that your books stay current and that you always know how much money is coming in and going out. You’ll be able to make better, more-informed business decisions.

Scalability. Hiring a part-time in-house bookkeeper limits the bookkeeping hours that you get. As your business grows, your bookkeeping needs will grow with it. This may mean switching your part-timer to a full-time role or hiring someone new altogether.

But when you hire a third party to do your books, getting more bookkeeping time is a much simpler task; it usually only takes a brief phone call or email.

What Should I Consider When Outsourcing My Bookkeeping?

When you’re seriously thinking about outsourced bookkeeping, it’s important to be aware of a few crucial factors. This will make sure that your relationship with your outsourced bookkeeper goes as smoothly as possible.

Questions you should ask yourself include:

Which bookkeeping services do I need? You may need your bookkeeper to perform a full range of tasks, including payroll, invoicing, and accounts payable and receivable. Or you might want just a few limited services, like entering transactions into accounting software and reconciling bank statements.

Before you begin shopping around, make sure you’ve got a good idea of what you need your bookkeeping firm to do, so you can choose an appropriate level of service right from the start.

What does my bookkeeper need to know? Even third-party bookkeepers need an onboarding period to get familiar with a business and its processes. This onboarding might include giving the bookkeeper your invoices and receipts, providing bank statements, and explaining any financial processes specific to your enterprise. Consider what they’ll need to get started, and begin gathering that information as soon as possible, so your updated books aren’t delayed.

How will I provide my financial information? Most bookkeeping firms will have a prescribed process for giving them access to your books. But in general, it’s easiest if you already use a cloud-based accounting software like QuickBooks or Zoho — simply add them as a user and you’re set.

However, if your program is desktop-only, you may need to create a file with the information and send it to them. Once that’s taken care of, you’ll need to provide access to your banking and credit card accounts. If you don’t need your bookkeeper to pay invoices or process payroll, it’s a good idea to set them up with read-only access, which allows them to see your financials but not spend any funds.

How Do I Choose an Outsourced Bookkeeper?

The idea of granting someone access to your business’s finances can be intimidating, so it’s important to choose a third-party bookkeeper that you’re comfortable with. You can find many outsourced bookkeepers online, but your best bet is to ask friends, family, and business associates about firms that they’ve been pleased with. Try to find a company that has multiple bookkeepers under one roof, rather than just a one-person operation. If you choose a solo practitioner, make sure they have the requisite bandwidth to reliably handle your needs.

Haven Financial is proud to offer expert bookkeeping and accounting services for all types of businesses. Start by telling us about your current bookkeeping needs.