We need to identify our core strengths and focus on them. For every function that is indispensable for our business like bookkeeping, we need to do a cost-benefit analysis. If the benefits for any purpose like bookkeeping don't justify the cost, then it would be prudent to outsource bookkeeping. When outsourcing bookkeeping, we need to identify the right bookkeeping firm which has the required expertise. This will help us with the right kind of inputs concerning areas which need more attention. When this vital function is well managed, we will be able to take our business to the next level.
The Top Reasons Why We Need to Outsource Bookkeeping Services
To stay ahead of the competition, we need to constantly work on improving our products and services to get a larger market share. We also require to keep an eye on areas where expenditure needs to be reduced and where more investment is required to ensure higher profitability.
If we decide to have a bookkeeping department, then there are expenses associated with employees which will be extremely high. These are the reasons for which we need to outsource bookkeeping.
Having a separate department for bookkeeping means we need to dedicate a particular space in the office for it. We will also have to invest in office supplies like stationery as well as furniture. We need to factor in electricity costs for that department. An important cost associated with all offices today is an investment in computer hardware and software which will need to be constantly upgraded.
When we outsource bookkeeping, these hassles are taken care of by the outsourcing firm as the staff is on their payroll and we don't need to worry about these expenses. The firm that we outsource the services to will have all the software, hardware and trained professionals to take handle the job.
Having employees on our payroll means the statutory taxes, benefits as well as health insurance. The laws relating to employees are continually changing, and we need to comply with these laws as non-compliance will result in substantial penalties. The advantage of outsourcing bookkeeping is they have the expertise regarding the latest regulations and the statutory costs relating to the staff will be borne by them.
One of the significant problems we face with in-house staff is absenteeism, and the reasons could be illness or maternity leave. It is challenging to find an immediate temporary replacement. When bookkeeping is outsourced, the onus of delivering the goods lies with them, and they will make sure that the updated accounts are available as required.
We should focus on our core strength, and if bookkeeping is not our core area, then outsourcing bookkeeping is the best decision. Focusing on the core strength will improve business profitability, and we don't need to worry about updating our accounts.
With a dedicated bookkeeping firm, we are guaranteed the accuracy of our records as seasoned professionals are maintaining them.
As business owners, it is essential to know where we stand vis-a-vis cash flows so that we can plan our expenditure more efficiently.
Future projections are critical to understanding where we want to be, say 5 years from now. When we outsource bookkeeping, forecasts concerning revenues and expenses are readily available so that planning can be done right away.
With increasing volumes in business, there will be an increase in accounts receivables and consequently time and effort required for their realization. The bookkeeping firm will follow up customer payments to ensure that we get paid either through credit card or QuickBooks.
Easier return processing
Our books of accounts will be updated regularly, so when our tax returns need to be filed our CPA can process our returns promptly.
As the outsourcing firm will maintain a schedule of our accounts payable, we will be prompt in settling their dues and earn their trust.
Profit From Accounting Outsourcing
There are numerous benefits of outsourcing our bookkeeping, the most important one being higher business profitability. With professionals handling our accounting, we can manage our businesses better.