Reasons To Outsource Bookkeeping Services for Small Business

As a small business owner, you know first-hand how much goes into running your business. There is never enough time in the day between managing your employees, keeping up with stock, and ensuring your customers are happy. That’s why it’s important to consider outsourcing your bookkeeping.

Whether you are a sole trader, partnership or Limited Company, you may feel it’s easier to handle their finances in-house; hiring a professional bookkeeper can save you time, money, and stress. In this blog post, we will discuss seven reasons why outsourcing your bookkeeping is an intelligent choice.

Below, I’ve explained the top 8 reasons to outsource your bookkeeping, as well as advice for finding a bookkeeper and completing bookkeeping yourself.

1. Focus On What You’re Good At

The main reason why you should outsource bookkeeping services is that it allows you to focus on what you’re good at. Everyone has their speciality, and letting someone else take care of the bookkeeping gives you more time and energy to put into yours.

In most cases, that won’t only be less frustrating for you but also help you grow your business. This is because every part of your business will have a specialist working on it. This will increase efficiency and productivity, ultimately resulting in higher profits.

You work on what you’re good at, and a bookkeeping specialist keeps the books. It’s like having an extended team to complete some of the tasks.

2. Scalability

Your energy is limited. You can’t do everything in your business.

That’s why, to scale, you must outsource bookkeeping or hire an internal team to work on it. Otherwise, other business areas will lose out, and you won’t be able to scale.

However, hiring staff is usually not the best option for small business owners.

3. Staff

If you don’t want to outsource bookkeeping, your other option is to hire and train staff. However, this requires an incredible amount of effort from you, but it can often be quite costly and inefficient.

This is because you’ll have to hire someone for a certain amount of hours which usually ends up being more than you need. You’ll also have a lot of additional supervising responsibility compared to if you were to outsource your bookkeeping.

That being said, for very specific types of businesses (which we’ll talk about later on), hiring an internal team may be the right option.

4. It Provides Access to Expertise – Credibility

A qualified bookkeeper will have a professional accounting body membership, which has standards that they must follow. They will also register under Anti-money laundering. When you take on any bookkeepers or accountants, check their registration with accounting bodies.

Bookkeepers have a unique understanding of accounting and tax laws that many small business owners do not possess. By working with an experienced bookkeeper, you can benefit from their knowledge, expertise and precise records.

5. It Increases Security and Privacy

Sensitive financial information needs to be kept secure, which can challenge small businesses with limited resources. By outsourcing your bookkeeping to a professional, you can ensure that your financial information is being managed in a secure, centralised location. This can help prevent data breaches and other security issues.

6. Outsourced Bookkeeping Increases Accuracy

Bookkeeping requires high accuracy, as even minor errors can have significant consequences. By outsourcing your bookkeeping to a professional, you can trust that your finances are being managed with great attention to detail, which can help prevent costly mistakes.

7. Outsourced Bookkeeping Saves You Time

One of the most significant advantages of outsourcing your bookkeeping is that it frees up your time to focus on other areas of your business. Bookkeeping is a time-consuming task that requires a high level of attention to detail. By handing this responsibility to a professional bookkeeper, you can trust that your finances are in good hands and have more time to focus on growing your business.

8. It saves you money.

If you outsource bookkeeping, you can also save money in the long run. By hiring an experienced bookkeeper, you can ensure that your finances are being managed properly, which can help you save money on taxes and avoid costly mistakes. Additionally, outsourcing can eliminate the need for an in-house bookkeeping department, saving you money on salaries and benefits.

These are our top 8 reasons for outsourcing bookkeeping, but you may have other reasons as well.

Why You Might Not Want To Outsource Bookkeeping

To give you the full picture, I also wanted to explain why you might choose not to outsource your bookkeeping.

Privacy – Although privacy was also on our list of reasons to outsource, it can also work vice-versa. If your business works with private clients and provides a confidential service, you may not be allowed to share their names or details with other organizations. In this case, you may need to go for an internal solution. However, you may also be able to discuss with your clients and add it to your terms to share some information with your bookkeeping company.

Control – If you use an internal solution for keeping your books, you have more control over them. If that’s important to you or for your type of business it would make sense to avoid outsourcing.

Communication – Another reason you might want to avoid outsourcing bookkeeping is that communication may be limited compared to an internal option. For example, if you work with a 3rd party accountant, sending an email and getting a response may take a couple of days. On the other hand, if you have an employee, you can communicate with them much faster.

FAQ

Should I Outsource Accounting Services Separately?

There is a difference between bookkeeping and accounting services. A bookkeeper will complete the day-to-day transactions and produce reports. An accountant will use these reports to produce year-end accounts, complete a tax return, offer financial advice, and strategic planning, and perform a complete range of accounting functions.

If you want both services, it may be worth outsourcing them separately to get the best service from each area and be more cost-effective. However, outsourcing bookkeeping alone can still provide significant benefits if your small business does not require complex accounting services.

Check on the bookkeeper’s experience to see if they can offer tax advice and submit tax returns. Outsourced accounting can be an excellent option for businesses that need more comprehensive financial services.

How Do I Choose the Right Bookkeeping Service?

When looking to outsource your bookkeeping, it is essential to consider factors such as experience, qualifications, and reputation. Look for bookkeeping services with experience working with businesses similar to yours and a proven track record of delivering accurate and timely financial reports.

It may also be beneficial to read reviews and ask for referrals from other company owners who have outsourced bookkeeping services.

Can I Manage My Own Bookkeeping?

While it is possible to complete your own bookkeeping, it can be a time-consuming and complex task. If you choose to handle your own bookkeeping, ensure you have a good understanding of accounting principles and stay organised to avoid costly mistakes.

The best way to complete business bookkeeping is to use accounting software. It will help keep all the financial information in one place and make it easier to track income and expenses.

However, for many business owners, outsourcing bookkeeping is more efficient and cost-effective, allowing them to focus on other business areas. Whether or not to outsource bookkeeping will depend on individual business needs and resources. So, weigh the pros and cons carefully before making a decision.

How Much Does Monthly Bookkeeping Cost in the UK?

How much a bookkeeper will cost varies based on your requirements.

Some of the factors that decide how much a bookkeeping service would cost include:

• Experience of the service provider
• How complex your business is
• Your turnover
• Location

For example, if you own a freelancing business that usually provides a service to the same clients with little cost, your bookkeeping needs would be quite basic. On the other hand, if you own a national store with a high turnover, lots of expenses, employees, etc., it would take the bookkeeper much longer, meaning the costs would be higher.

Generally, in the UK, the costs can range anywhere from £30 per month to £1000 per month. It all depends on the turnover, transactions, etc. Outsourced Accountants are usually more expensive than bookkeepers, so it is worth checking the services you require from each provider.

Where Can I Find a Bookkeeper?

There are several options when you are looking to outsource accounting or bookkeeping, including:

• Accounting software – most provide a directory like QuickBooks certified bookkeepers
• Recommendations – Speak to other businesses that have outsourced their bookkeeping for a recommendation
• Directories – Check local and national directories and then look at reviews
• Google Search – find local bookkeepers in your area
• Job boards like LinkedIn – Look for experienced freelancers offering accounting and bookkeeping services.

Conclusion:

Using outsourced bookkeeping services is a wise decision that can help you save time, money, and stress while also providing access to expertise and increasing accuracy and security. By working with a professional bookkeeper, you can rest assured that your finances are in good hands, allowing you to focus on growing your business.

If you’re considering outsourcing accounting and bookkeeping, look for a reputable provider with experience working with small businesses in your industry. With the right partner, outsourcing your bookkeeping can be a game-changer for your business.