Outsourced Bookkeeping: What is It and Is It Right for My Business?

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As business owners face more and more pressure to sustain through a shaky economy, many are realizing their current bookkeeping strategy is not longer tenable. Whether you need to outsource a portion of your bookkeeping, need expertise on growth or debt reduction, or need to transition out of DIY accounting, we’ve got you covered.

Let’s walk through the benefits, why businesses outsource their bookkeeping, costs, and how to get started:

Benefits in Outsourcing Your Bookkeeping

There are a few key upsides to outsourcing some or all of your bookkeeping, and they all come down to one thing: Increased Productivity and Value at a Reduced Cost.

When you work with a bookkeeping firm (and, typically, a CPA firm), you’re getting greater expertise, better service, and a team of professionals with more resources. This is where you get the most out of your investment.

Is Outsourcing Bookkeeping the Right Choice for Your Business?

While this is a unique choice that makes a different impact for every business, there are a few common scenarios when outsourcing is the right choice for you:

Transitioning from DIY Bookkeeping to Professional Bookkeeping

If you’ve been using DIY bookkeeping, or managing it yourself without a finance degree and you’re reading this article, you’ve probably reached the point of realization that you can’t manage books and successfully run your business at the same time. This is one of the most common reasons people turn to outsourced bookkeepers.

Looking for Specialized Skills or Industry Expertise

One of the most common reasons for outsourcing bookkeeping is the advantage of getting specialty skills, greater expertise, and more experience for a fraction of the cost. Most business owners prefer to work with bookkeepers and CPAs who have clients in their shared industry (whether it’s real estate, crypto, or e-commerce).

Growth Mode or Looking for Cost-Savings

Typically, when a company reaches a point where they need to identify growth or cost-savings avenues, getting the expertise of an outsourced bookkeeper can make a major impact. Getting the insight from a team that has helped other businesses in this scenario can be of major benefit.

You Have A Bookkeeper, but They’re Overwhelmed or Error Prone

It’s a common misconception that everyone who outsources their bookkeeping outsources 100% of their bookkeeping services, and though it is common, it’s not always the case. There are many instances where a portion of the needs will be outsourced to a professional bookkeeper. Common instances include:

  • Facing an audit
  • A need for specialized skills (i.e. financial statements, bookkeeping cleanup)
  • Industry expertise
  • Your bookkeeper is overwhelmed
  • Reconciliation and checking
  • Task-heavy needs, like importing financial information or reconciling the balance sheet
  • and more

There’s no limit to the instances when you might outsource a portion of your bookkeeping. Just know that it is absolutely normal to lean on external bookkeepers for a portion of your tasks or even for a short period of time.

You Don’t Need to Outsource All Bookkeeping Services

Many business owners don’t realize that you can outsource a portion of your bookkeeping needs. One example is if you’re happy to manage invoicing and payroll, but need help with reconciliation and reporting. The great thing about outsourced bookkeeping is that you can mix and match services based on your needs, and if your needs ever change, there’s always room for expansion.

Costs: In-House vs. Outsourced Bookkeeping

A common question is whether outsourced bookkeeping costs more than in-house bookkeeping, and the answer truly is that it depends. Having a full-time employee with benefits can be expensive, particularly when you factor in management hours as well. Longterm, an outsourced accounting service typically costs less and is more cost-effective, as a team of accountants functions more efficiently than a single, in-house staff.

Type of BookkeeperMinimum Hourly CostKey Benefits
Full Time$25-50+/hour, minimum 40 hours per week– In-House
– Committed to Your Business
– Only Works for You
Outsourced$150+/hour, no minimum– Better Value for the Money
– Greater Expertise
– Flexible Relationship

Note: these are estimates based on broad data. It’s important to remember that outsourced bookkeepers are typically hired for less than part time hours, and that the more expertise and experience your outsourced bookkeeper has, the higher the cost is likely to be.

It’s also important to note that with outsourced bookkeepers, you only pay for the hours you need However, most statistics indicate that outsourcing can save you 40-60% on accounting.

Understanding Rates

Each CPA firm organizes their rates differently. Two common practices are an hourly rate (sometimes with a minimum), or a monthly flat fee. During your consultation, your potential bookkeeper can walk you through the rate structure, what is included, and answer any questions you have about the cost and process.

How to Outsource Your Bookkeeping

Outsourcing your bookkeeping can be a challenging process, but it’s all about finding a firm that understands your business, offers the services you need, values customer service, and feels like the right fit. You can learn about our services here: Outsourced Bookkeeping Services.

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