As a small business owner, I know how important it is to keep track of finances. But managing bookkeeping, payroll, and tax returns can be a daunting task, especially when you have limited resources and time. That's why I decided to hire an outsourced bookkeeping company. In this blog post, I will explain why outsourced bookkeeping companies are the smart choice for small businesses like mine.

Introduction to Outsourced Bookkeeping Companies

Outsourced bookkeeping companies are third-party firms that provide bookkeeping services to businesses remotely. They handle all financial transactions, including recording income and expenses, managing accounts payable and receivable, reconciling bank statements, and preparing financial statements. By outsourcing bookkeeping services, small businesses can focus on their core activities and leave financial management to the experts.

Benefits of Outsourcing Bookkeeping Services for Small Businesses

Outsourcing bookkeeping services can benefit small businesses in many ways. Firstly, it saves time and effort. Bookkeeping is a time-consuming task that requires attention to detail, and it can take up a lot of your valuable time. By outsourcing bookkeeping services, you can free up your time and focus on running your business.

Secondly, outsourcing bookkeeping services can save money. Hiring an in-house bookkeeper can be expensive, especially when you factor in the cost of salaries, benefits, and office space. Outsourced bookkeeping companies charge a fraction of the cost of hiring a full-time bookkeeper, and you only pay for the services you need.

Thirdly, outsourcing bookkeeping services ensures accuracy and compliance. Bookkeeping errors can result in fines and penalties, and it can also damage your business reputation. Outsourced bookkeeping companies have experienced professionals who are trained to handle financial transactions accurately and comply with regulatory requirements.

How Outsourced Bookkeeping Companies Work

Outsourced bookkeeping companies work remotely and use cloud-based accounting software to manage financial transactions. They communicate with clients through email, phone, or video conferencing. Clients provide the necessary financial documents, such as bank statements, invoices, and receipts, to the outsourced bookkeeping company. The bookkeepers then record the transactions, reconcile accounts, and prepare financial statements. Clients can access their financial reports and documents 24/7 through the cloud-based accounting software.

Factors to Consider When Choosing an Outsourced Bookkeeping Company

Choosing the right outsourced bookkeeping company can be challenging. Here are some factors to consider when making your decision:

  1. Experience: Look for a company with experience in bookkeeping services for small businesses.
  2. Reputation: Check the company's reviews, testimonials, and references.
  3. Services: Make sure the company offers the services you need, such as payroll processing, tax preparation, and financial reporting.
  4. Security: Ensure the company has robust security measures in place to protect your financial data.
  5. Pricing: Compare pricing and ensure it's within your budget.
  6. Communication: Choose a company that communicates effectively and promptly.

Cost Comparison: In-House Vs. Outsourced Bookkeeping

Hiring an in-house bookkeeper can cost a small business between $40,000 and $60,000 per year, including salary, benefits, and office space. On the other hand, outsourcing bookkeeping services can cost between $200 and $1,000 per month, depending on the level of services required. Outsourcing bookkeeping services can save a small business up to 50% of the cost of hiring an in-house bookkeeper.

Common Misconceptions About Outsourced Bookkeeping

There are several misconceptions about outsourcing bookkeeping services. Here are some of the most common:

  1. Loss of Control: Some small business owners fear that outsourcing bookkeeping means losing control of their financial data. However, bookkeeping companies use secure cloud-based accounting software that allows clients to access their financial data anytime, anywhere.
  2. Complexity: Some small business owners believe that outsourcing bookkeeping is too complex and time-consuming. However, outsourced bookkeeping companies handle all the complex financial transactions, leaving small business owners to focus on their core activities.
  3. Expensive: Some small business owners think that outsourcing bookkeeping is expensive. However, as we've seen, outsourcing bookkeeping services can save small businesses up to 50% of the cost of hiring an in-house bookkeeper.

Top Outsourced Bookkeeping Companies for Small Businesses

There are many bookkeeping companies to choose from. Here are some of the top companies that provide bookkeeping services for small businesses:

  1. Bookkeeper.com: Bookkeeper.com offers a range of bookkeeping services, including accounts payable and receivable management, reconciliation, and financial reporting.
  2. Bench: Bench provides bookkeeping services for small businesses, including monthly financial statements, tax preparation, and online bookkeeping software.
  3. Merritt Bookkeeping: Merritt Bookkeeping offers bookkeeping services for small businesses, including financial statement preparation, bank and credit card reconciliation, and payroll processing.
  4. inDinero: inDinero provides bookkeeping services, tax preparation, and financial reporting for small businesses.
  5. KPMG Spark: KPMG Spark offers bookkeeping services, tax preparation, and financial reporting for small businesses.

Customized Bookkeeping Services for Small Businesses

Each small business has unique financial needs and requirements. That's why some outsourced bookkeeping companies offer customized bookkeeping services. Customized bookkeeping services can include:

  1. Industry-specific financial reports: Some industries require specific financial reports. Customized bookkeeping services can provide industry-specific financial reports that meet regulatory requirements.
  2. Personalized support: Customized bookkeeping services can provide personalized support to small businesses, including consultations with a dedicated bookkeeper.
  3. Scalability: Customized bookkeeping services can scale up or down depending on the size and needs of the small business.

Bookkeeping Software Used by Bookkeeping Companies

Most outsourced bookkeeping companies use cloud-based accounting software to manage financial transactions. Some of the popular bookkeeping software used by outsourced bookkeeping companies include:

  1. QuickBooks Online: QuickBooks Online is a cloud-based accounting software that allows small businesses to manage financial transactions, track expenses, and create invoices.
  2. Xero: Xero is a cloud-based accounting software that provides small businesses with financial reporting, invoicing, and inventory management.
  3. FreshBooks: FreshBooks is a cloud-based accounting software that provides small businesses with invoicing, time tracking, and expense management.
  4. Wave: Wave is a cloud-based accounting software that provides small businesses with financial reporting, invoicing, and payroll processing.

Conclusion: Why Outsourced Bookkeeping is the Smart Choice for Small Businesses

Outsourcing bookkeeping services can save small businesses time, money, and effort. It ensures accuracy and compliance, and it allows small business owners to focus on their core activities. When choosing an outsourced bookkeeping company, consider factors such as experience, reputation, services, security, pricing, and communication. Customized bookkeeping services can provide small businesses with tailored financial solutions. And with cloud-based accounting software, small businesses can access their financial data anytime, anywhere. If you're a small business owner, consider outsourcing bookkeeping services today.

CTA: Contact us to learn more about how outsourced bookkeeping companies can help your small business.