Why Outsource Bookkeeping – 5 Good Reasons

As an accounting firm, you face plenty of challenges throughout the year, not the least being a perennial shortage of time. It might seem you are scrambling to meet demanding deadlines all the time, with the tax season being the toughest of the lot. Firms who find themselves short of resources to scale their services quickly can take the help of outsourcing services. You must be able to use the best-outsourced bookkeeping services for small businesses if you are a small firm but have big dreams.

But before you think about outsourcing, you must know the challenges you want to address with outsourced bookkeeping. You must see outsourcing as critical to your accounting firm and something that offers a strategic and long-term benefit. Otherwise, this move won’t deliver the results you want

Challenges that Outsourcing Aims to Solve:

1. Clients Who Expect More from Less

You must have heard the saying ‘less is more’ – well, in the accounting industry, your firm can face a different iteration of this saying, wherein clients demand more but are unwilling to pay more. In a world that is just trying to find its economic feet after suffering through the pandemic, many firms cannot say an outright no to clients who expect more services but aren’t willing to pay for them.

The result is that they are forced to undercharge their clients; this impacts revenue generation by a long way, and more importantly, they are investing a whole lot of resources into the proceedings, which they don’t have enough of. Therefore, firms must build resilience and look for options to derive more value from tasks like bookkeeping. The solution is outsourcing.

It will help you address downward pricing pressure. Something that we need to take into consideration is that your customers will always be looking for a value deal. They will put pressure on you to lower your pricing structure. With outsourcing, this pressure is pressure no more.

1. New Skill Sets Needed

The world is evolving, and so are client demands. This evolution demands new skillsets, and this is the #1 challenge for accounting firms. According to a Hinge Marketing study, more than 47% of firms recognize the need to walk in step with the marketplace’s demands through using new technology and implementing business best practices. However, it is essential to remember that any laxity on this front will mean that competitors who are continually adding to their skill sets will march ahead. Conversely, a firm that doesn’t will remain behind.

However, training existing teams becomes a challenge. Something else that can be done is hiring accountants with the necessary skillsets, both tech and otherwise, that can help your firm align to the marketplace’s needs.

But this is easier said than done. Smaller firms or even mid-sized firms might find it challenging to make the required investment in technology or people. This is where the ‘why outsource bookkeeping’ enters the picture. If you want to add skillsets to your firm without breaking the bank, outsourcing is the way to go, wherein you will benefit from the skillsets talented offshore accountants bring to your firm.

2. Time Management

If you are an accounting firm owner reading this article, take your mind back to the busy tax season. The scramble to meet tax season deadlines is always hanging on your head. A feeling of getting overwhelmed with tax work is pretty standard, and everyone in your firm finds it challenging to keep heads above tax preparation tasks. In this scenario, think of a client who also wants you to handle bookkeeping work.

What do you do? You are occupied in the tax season, and in the ordinary course of events, there is a perfect chance that you will say no or ask for some more time till the tax season is out of the way.

In this case, there is a chance that the client might move to some other firm that can take care of their bookkeeping requirements. Again, the problem here was the want of time. You did not have the time to take up more work.

Outsourcing comes in to help you with two solutions – you can outsource tax preparation or work with outsourced bookkeepers to manage bookkeeping work. The equation is straightforward – if you want more time on your hands to not say no to clients, you need to free up your time. Choosing the best-outsourced bookkeeping services for small businesses is a good idea.

3. Moving from Low Value to High-Value Services

The focus of businesses is moving toward leveraging value-rich services. 54% of buyers prefer a bundled accounting services package. The question is – is your firm able to offer a bouquet of services, or is it only offering a specific service like bookkeeping or tax preparation? There is an easy way to add to your services portfolio. Yes, you guessed it right – outsourcing. You get in touch with accounting outsourcing services providers with expertise in business advisory and forensic accounting to add these services to your portfolio immediately, or you can outsource bookkeeping and free up time to focus on value-added services.

But it’s not just about adding value services to your list and showcasing the expertise of your in-house team; it is also about adding more services to your list. This helps your firm explore new growth avenues.

This is again the answer to this question –why to outsource bookkeeping – you do it to add services that will be seen as a great value add by your target customers.

1. The Scalability Advantage

Nothing beats the scalability advantage that best-outsourced bookkeeping services for small businesses bring to the table. There is always a chance that you want to scale up quickly to build immediate capacity. For example, say your marketing campaign delivers the results you are looking for, and a business wants your firm to take care of a range of accounting tasks, right from tax preparation, to bookkeeping and a lot of stuff in-between. The only problem – is you can’t take up all jobs because you don’t have the necessary team strength. But you don’t have much time to hire new resources and don’t know whether this will turn into a long-term association with the client on the said tasks.

What do you do? It would help if you had the flexibility to scale up or down. Again the answer is bookkeeping outsourcing, wherein you work with an outsourcing partner who can help you immediately scale your team. In this case, the offshore team will act as a seamless extension of your in-house team. If the amount of work goes down, you can scale down your team. This is the kind of flexibility you get with outsourcing bookkeeping.

How to Outsource Bookkeeping?

If the five reasons have convinced you to outsource your bookkeeping tasks, the next question is how do you go about this. What is the process? Well, the process is straightforward. First, search for an outsourcing services provider with focused US accounting expertise and ensure they know what they are talking about. What’s more, they need to deliver on data security to ensure whatever data you share with them is safe and secure. You should also go through their client references and, if possible, ask clients how they are faring (or fared) with the bookkeeping outsourcing services provider, you are planning to partner with.

Last but not least, understand their engagement model and evaluate the kind of flexibility their models offer. Ask for a custom model that perfectly aligns with your needs and requirements if needed. And what of the cost? We are not discussing the cost-benefit of outsourcing because all outsourcing providers will deliver a cost-benefit. But, the question to ask is – what is the value they bring to the table?

Conclusion

We hope the question – ‘why outsource bookkeeping?’ has been answered in its entirety. There are, of course, many other benefits that outsourcing brings to the table. Also, it would help if you consider many other outsourcing aspects comprehensively to maximize this potential. Subsequent articles will discuss bookkeeping outsourcing threadbare to ensure you make an informed decision.

Do go through our guide on outsourcing bookkeeping to ensure your bookkeeping properly, considering each aspect that will help deliver the best ROI.