It doesn’t take long for a new business owner to understand that accurate and up-to-date financial records are critical for keeping any enterprise running smoothly. Many small-business owners attempt to keep track of their accounting; however, most owners don’t have the time, desire, or expertise to painstakingly keep track of their financial records – especially if their company is growing rapidly. Therefore, most business owners rely on accountants and bookkeepers to keep track of things for them. Traditionally it was common for business owners to hire bookkeepers to work in-house, but with modern technology maintaining a local accountant is often unnecessary. Most businesses can benefit from outsourcing their accounting and bookkeeping. For most companies, maintaining a local in-person bookkeeper is a waste of time and money. We argue that most businesses can benefit from using an online bookkeeping service. Below, we list some of the many advantages associated with outsourcing your accounting:
Many small-business owners attempt to keep track of all their financial records themselves. Most will soon find that there are many subtle nuances associated with keeping track of financial records, and most business owners don’t have the time (or patience) to learn how to keep accurate financial records best. Instead of becoming bogged down and frustrated with bookkeeping, it’s usually best to outsource the work to a professional accountant. Hiring an expert will help business owners save time in the long run, and can also save money by helping businesses avoid major accounting blunders (that are often all too easy to make). Further, relying on experts (rather than yourself) will help guarantee that tasks such as payroll, taxes, and invoicing are conducted on time.
Adaptability and Scalability
If you’re running a business – especially a small/new business – you’re going to want to have the flexibility to scale significantly up (or down) the size of your operations without suffering a profit loss. If you choose to maintain in-house accountants, a sudden drop-off in revenue (even if it’s only temporary) might force you to lay off an employee or unnecessarily keep them on the payroll. One of the most significant benefits of outsourcing your bookkeeping is that you can radically scale your operations up or down without impacting the personnel directly employed by you. This flexibility is particularly important for new businesses or businesses that operate in unstable markets.
Keeping extra personnel in your office inherently generates more human capital costs. More employees in your office mean more desks, computers, coffee filters, office space, etc. Trying to maintain a fully furnished office is expensive, and for businesses that aren’t generating multiple millions in revenue, keeping an additional office is costly and unnecessary. Further, employees require sick time, vacation leave, retirement accounts, and other benefits. Managing additional personnel takes more time out of your day, and inherently puts more pressure on a company’s human resources; plus, there are many steps involved in maintaining employees – recruiting, hiring, firing, replacement costs, etc. – that can be avoided by outsourcing to professional remote bookkeeping firms. Outsourcing allows managers to stay focused on growing their business, without getting bogged down in the details associated with maintaining additional personnel. For small and medium enterprises, outsourcing is one of the easiest ways to drive down overhead costs.
It’s no longer necessary for businesses to be fixed to any single location. Many companies do their best to embrace a “digital nomad” lifestyle that allows them to operate remotely and with mobility. By outsourcing accounting, your business becomes less tethered to any single location. This allows for greater flexibility in where and how you manage your business. With a remotely located bookkeeper, it doesn’t matter if you’re operating your company from a Wall Street office or the beaches of Mexico.
Privacy & Security
The biggest privacy/security risks associated with running a business is not associated with how data is stored (such as password protected computers etc.). Security breaches most commonly occur because of individual disagreements between bosses and employees. Bookkeepers and accountants are trusted with some of a company’s most important information. Maintaining a local bookkeeper involved placing a significant amount of personal trust into that individual that you hire, and you have to continue to place trust in that personal relationship regardless of personal of managerial disagreements that occur between the bookkeeper and other individuals in the office. There are many benefits associated with outsourcing your bookkeeping. For a small business, outsourcing is a fantastic way to cut costs associated with maintaining personnel. This frees up time and money for business owners to focus on increasing their profit margins, rather than getting lost in the details of managing people and paperwork. Further, outsourcing removes many of the stresses associated with operating a small business – such as meeting tax, invoice, and billing deadlines. Finally, outsourcing your accounting allows for a sense of freedom and flexibility that is not allotted by most traditionally managed businesses.