The DIY Dilemma: When to Outsource Bookkeeping for Small Businesses

In addition to the daily bookkeeping tasks, there are the monthly bank reconciliations and reports to run. Combine these responsibilities with looming tax filing deadlines, and you can soon find yourself overwhelmed. If you decide to outsource bookkeeping, it’s crucial to partner with a reputable and reliable bookkeeping service. Look for providers with a proven track record, positive client testimonials, and a commitment to data security and confidentiality.

First, outsourcing allows you to focus on the things that matter most to your business, such as sales and marketing while saving time and money on other parts of the company. This benefits you now and positions you well for future growth because it frees up resources needed to expand into new markets or launch additional products or services. Outsourced, virtual bookkeeping can cost as little as $150 per month and as much as $900 (or more) per month. Some companies charge by the number of accounts you need them to manage, while other companies charge based on your company’s monthly expenses. Typically, the lower your expenses (and the fewer your accounting needs), the less you’ll be charged. But Merritt Bookkeeping’s most stand-out feature might be its in-depth financial reports.

How do you outsource bookkeeping?

EXL has no obligation to update any forward-looking statements after the date hereof, except as required by federal securities laws. Outsourced bookkeeping services employ experienced staff that can handle all of your bookkeeping tasks. They’ll prepare your financial quickbooks learn & support online reports, including balance sheets, and handle all of your accounts receivable, accounts payable, and credit card transaction entries. When looking at outsourced accounting solutions, the first aspect to consider is the scope of service being offered.

• While bookkeeping is seen as a set of compliance tasks, it forms the core of an accounting process.
• According to organizational consulting firm Korn Ferry, more than 85 million jobs could go unfilled by 2030 because there aren’t enough skilled workers to take them.
• Some businesses also bring in a part-time bookkeeper but assign them extra administrative tasks in order to create one full-time position.
• With the time saved, you can focus on the tasks that excite you most as a business owner.

We weighted each category equally to calculate our star ratings, and we also considered our accounting expert’s opinion and advice when ranking our top brands.

Decimal Solves Financial Operations for Your Business

This avoids having to pay a staff bookkeeper who may have more idle time in between busy seasons. As a small business owner, you devote most of your time to managing your company’s day-to-day activities. You probably take pride in doing most tasks yourself, including your bookkeeping. In the next step of the process, the bookkeeper will take charge and start to work with the software they connected with in the first step. He will record your financial transactions and then categorize them in an organized fashion. He will then also perform a reconciliation process to ensure it all balances and there are zero discrepancies.

• SLC Bookkeeping can create the financial reporting tools you need to make better decisions.
• This means tracking bills that have been generated and need to be accounted for.
• Once a business decides to outsource, they then can choose what accounting functions they would like to get help with.
• DIY accounting software

  If you plan to do your own bookkeeping, DIY accounting software is probably your best bet.

• With Decimal coordinating all the bill pay activities, you’ll have up-to-date reporting on what’s due and when.

There are also plenty of other questions to be asking in terms of reliability, and you should be asking both the team and their references about them. Again, this is the heart of the company you’re putting somebody in charge of. Whether you’re hiring remotely or within your area, someone working in Boston is bound to charge more than somebody in Omaha. Ultimately, think of this is an investment in your business, not a cost.

Costs of outsourcing your bookkeeping

All options have pros and cons that depend on what you’re looking for from your accounting service. If you’re hiring a bookkeeping company, read their reviews and ratings online to see if their services meet or exceed your expectations and needs. Check with the Chamber of Commerce or on their website for reviews to make sure they are legit. They should make sure your books are always kept up to date and that the proper technology is being used, and they should be able to provide accurate and regular financial statements to your investors and management team. Bookkeepers play the important role of tracking your finances and creating insightful financial statements to help you make more informed decisions regarding your company’s money. If you’re running a small business, it’s hard to focus on marketing, quality, customer relations, vendors, and accounting.

The outsourcing service will also provide support so that you can ask them in case of any confusion. As a rule of thumb, the more complex your financial situation is, the more outsourcing bookkeeping services will cost. Ignite Spot Accounting delivers heftier reports than many other cloud accounting providers we checked out for this piece. Along with typical financial reporting (like profit and loss reports and balance sheets), you’ll get a KPI (key performance indicator) report and profitability analysis, among others.

If you are solely choosing an outsourced bookkeeper, then the bookkeeper will get used to the software that you use so that he can continue working on that platform and help ensure the accuracy of your transactions. Many accountants offer bookkeeping as part of their accounting services or are willing to get you caught up before tax season. But the catch is that a CPA will generally charge more per hour than a bookkeeper would. They’ll typically charge their hourly rate, which is higher than a bookkeeper’s, because of the hard work in getting accredited. A freelance bookkeeper or a firm will operate outside of your business—they’re not an employee.

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For example, if you hire a professional bookkeeper then the process of bookkeeping will be different than if you chose a hybrid option which is a popular choice of many businesses. Here is an example of the process that occurs when you choose an outsourced bookkeeper. If you are a small business or a startup then you are probably not sure what all the various reports mean. The outsourced bookkeeper will explain what each report means so you can then base your business decisions upon that. The bookkeeper will go into detail so that you can understand your business’s current position and whether you need to change some things to ensure it does better than it is doing right now.

An additional benefit to small businesses is they do not need full-time employees for all of the roles in an accounting department. You either need to over-hire (wasted money) or under-hire (lacking skills). One of the primary advantages of partnering with an outsourcing accounting company as they can dial in the exact level of skill set for each role you’ll need at any given time.

We have you covered at a fraction of the cost if you were to recruit and hire several people for these roles. Every business has to go through a critical time of busy tax season when they get screwed like anything. When your business needs outgrow the solutions we’ve covered, it probably means you need to grow your accounting department and employ an in-house bookkeeper. A freelance bookkeeper works with you one-on-one to get your books done.

The solid expertise of our bookkeepers backs our bookkeeping outsourcing services, and they bring many years of US bookkeeping experience to the table. While bookkeeping is seen as a set of compliance tasks, it forms the core of an accounting process. Using our outsourced bookkeeping expertise, you don’t have to worry about your client’s bookkeeping tasks, allowing your internal team to focus on strategic accounting work. Instead of hiring a full-time employee to handle accounting and bookkeeping tasks, a company can outsource accounting work to firms that provide various accounting services. Once a business decides to outsource, they then can choose what accounting functions they would like to get help with. Some companies prefer only to have help with daily reconciliation, while others want to have the bulk of the accounting work taken care of.

Desired Services

Yes, if the firm is as concerned about the security of your financial data as you are. Work with a bookkeeping outsourcing services provider who is SOC 2, GDPR certified and further strengthens its cybersecurity posture with other certifications that prove that your data is safe. It’s up to you to determine whether your business can afford an in-house bookkeeper. Their standard pay, according to Salary.com, ranges from $39,568 and $50,577 per year—before taking into account payroll taxes and employee benefits.

At Business.org, our research is meant to offer general product and service recommendations. We don’t guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services. Want to learn more about bookkeeping before you sign up for a virtual provider? Our article on business bookkeeping basics gives you more information on how to do bookkeeping and why. Typically, you’d only get detailed financial statements like this through a CFO — which means Merritt gives you some of the best aspects of having a CFO without the high cost.

Tapping into AI and automation helps businesses streamline and strengthen their operations, while providing rich information that helps enterprises quickly predict and respond to trends and threats alike. At Bench, we take bookkeeping off your hands so you can worry about running your business. Your Bench bookkeeper imports, reviews, and categorizes your transactions every month, providing you with up-to-date financial reports that allow you to make better business decisions.