In today’s competitive climate, it is a massive struggle for accounting firms to balance costs and benefits at every step. Firms owners have realized that managing all operations in-house is not ideal for achieving cost efficiency and improving productivity. Between managing day-to-day tasks, paying bills, supervising operations, it is impossible to effectively manage functions like bookkeeping and tax preparation.
And that’s where the role of outsourced bookkeeping comes into the picture.
Bookkeeping is a critical function for any accounting firm; however, it’s time-consuming, monotonous, and cumbersome, making it difficult to handle in-house. And in this case, it is always better to delegate the bookkeeping tasks to a third-party provider instead of burdening your staff.
This practice helps yield massive cost savings and provides many strategic advantages that facilitate growth and expansion. So, if you are a small firm owner considering to outsource bookkeeping function, here are the top 10 benefits of outsourcing bookkeeping:
Top 10 Benefits of Outsourcing Bookkeeping
1. Lower Operational Costs, Increased Net Profit Margins
This is considered the primary driver of outsourced bookkeeping. Because of the specialized nature of accounting and bookkeeping, it takes experienced professionals to execute such tasks that generally are not easy to afford. However, when you opt for outsourced bookkeeping, you get access to highly skilled professionals without rigorous recruitment processes and save up to 50% of costs. In addition, there are no training costs, holiday covers or sick leaves, etc., that you need to take care of. You only pay for the work done with a substantial reduction in costs.
2. Save Time & Minimize Paperwork
Logging, analyzing, and reconciliation records consume a lot of time and exhaust your team members. One of the advantages of partnering with outsourced bookkeeping services is that you can buy more time for growth-centric activities – at a much-reduced cost.
By outsourcing the time-consuming bookkeeping tasks, you can focus more on the growth of your firm. You will have time to attract more clients, evaluate processes, and expand your service portfolio. Also, by eliminating this compliance task from your to-do list, you’ll be able to get rid of the physical work and get everything executed online.
3. Achieving Error Free Results
When an in-house bookkeeper manages your books, you are more likely to accept specific margin errors in the initial days, allowing them to have some buffer time making sure they settle in. However, with outsourced bookkeeping, you don’t have to go through this adjustment period. This is one of the benefits of outsourcing, accounting, and bookkeeping that helps alleviate this challenge by allowing maximum efficiency from the very first day.
When you liaise with an outsourced bookkeeping provider, you will have not one but a team of bookkeeping professionals who are trained to handle the most complex bookkeeping tasks. They have access to an automated system that increases transparency, makes everything seamless, and more importantly, works under an expert oversight to fix issues, if any.
4. Access a Robust Cloud-Based Bookkeeping System
The best outsourcing companies operate on a completely online interface, which helps streamline processes and handle everything efficiently. Since all the work is managed on a cloud-based system, you can access your data anytime and anywhere. This streamlined collaboration enables you to add your expenses/income and examine your finances efficiently.
As this data-centralized system helps keep things organized, it also helps lay a strong foundation of a structured tax preparation system, allowing your accounting firm to stay compliant.
5. Full-Service Bookkeeping and Accounting
The job of a bookkeeper is more than just managing books and tracking expenses. As you learn more about the benefits of outsourcing, accounting, and bookkeeping, you’ll find out that it’s only the tip of the iceberg. When you realize its full potential and understand the value of bookkeepers, your firm will reap many benefits and value to your firm. It’s not only a time-saving mechanism but offers strategic benefits. One example is that your accountants who are in charge of bookkeeping tasks can now focus on improving client engagement and managing client expectations.
6. Access to Detailed Financial Reports
One of the benefits of outsourcing bookkeeping is the financial insights and information that come along with it. With a click of a button, you get access to all your clients’ financial reports that allow you to dive deep into the specifics and make informed decisions. You can review your profits & losses, balance sheet, and cash flow history.
Because the bookkeepers have a defined and structured method of recording information, going through the reports becomes very easy and quick. And later on, this information can be easily shared with the stakeholders without changing or simplifying anything.
7. Make Smarter & More Informed Decisions
Great insights and instincts back the best strategic decisions – but having the numbers on your side is an added advantage. With better financial knowledge of your firm, you can make more informed decisions that yield better results. The platforms that outsourced bookkeeping professionals use allow you to have better insights about where your clients should invest more. This practice helps focus on more profit-generating revenue sources and cutting down on less profitable ones.
8. Prepare for Tax Season with Minimum Extra Effort
Tax season is usually stressful. However, when you have a well-organized bookkeeping management system, you lay a strong foundation for a productive tax season without unnecessary stress.
Outsourced bookkeepers help you maximize the potential of your bookkeeping services and also ensure you avoid the scrambling to get bookkeeping tasks done before the tax season kicks in. These highly skilled professionals will help free up your in-house professional for the tax season. And then, when the time comes, they’re able to file tax returns conveniently, optimally and accurately.
9. Scalability that Enables You to Grow
As an accounting firm, it is impossible to have a consistent flow of income throughout the year, which means that you often don’t get the right balance between bookkeeping tasks and resources. And outsourcing allows you to dodge this bullet.
Scalability is one of the best benefits of outsourcing, accounting, and bookkeeping. Hiring an offshore partner gives you options to scale with an array of engagement models like FTE, Block-of-hours, and Pay-as-you-go. Depending on the volume of work, accountants can choose the option that fits your requirements the most. During the peak season, you can scale up the outsourcing team, and when the workflow is slow, the unit can be slimmed down. Above all, you won’t have to care about holiday covers, maternity leaves, or other recruitment costs.
10. More Focus & Better Guidance
With an outsourced bookkeeping team on board, you will be focused more on growth-centric opportunities that lie ahead instead of managing internal compliance processes. The management can focus on growing the practice and retaining more clients, while the offshore team helps you focus on maintaining ‘client books’ seamlessly. Not only managing bookkeeping, but the outsourcing experts will also guide you in several aspects of accounting. Their insights can be highly beneficial to take your firm to the next level.
Start Your Outsourcing Journey Today
So, these were the top 10 benefits of outsourcing bookkeeping. We hope this article helps you make an informed outsourcing decision for your accounting firm. To reap all the benefits mentioned above, an accountant must pick the right outsourcing firm that aligns best with their firm’s requirements.
This subject, we will touch upon in the next blog. Till then, stay tuned!
Originally published Jul 20, 2021 07:07:52, updated Jul 21 2021