As a small business owner, you devote most of your time to managing your company’s day-to-day activities. You probably take pride in doing most tasks yourself, including your bookkeeping.
But at the end of a hectic day, crunching the business’s financial numbers may be the last thing you want to tackle. In addition to the daily bookkeeping tasks, there are the monthly bank reconciliations and reports to run. Combine these responsibilities with looming tax filing deadlines, and you can soon find yourself overwhelmed. When this happens, it’s time to look for a new bookkeeping solution.
When you should hire a bookkeeper
It’s always easier managing your books in the early stages of your business when the volume of transactions is likely low enough to keep things in check for a while.
But what are the signs that indicate it’s time to hire a professional bookkeeper? If you are experiencing any of the conditions below, it’s time to think about bringing someone on board to manage your bookkeeping needs.
- Managing your books takes more and more time as the business continues to grow.
- Your books have fallen behind, and now your profit margins, cash flow, and expenses are unclear.
- You’re unable to make high-level business decisions since there is no accurate financial picture of your company.
- It takes you longer to do your income taxes since your records are outdated.
If these struggles sound familiar and you’re losing valuable time each month, it’s time to hire a bookkeeper.
Getting help with your books
Fortunately, there are ways to get help if you are behind in your bookkeeping. Here are some top options if you’re thinking of getting some support:
DIY accounting software
If you plan to do your own bookkeeping, DIY accounting software is probably your best bet. Most accounting software has tools to help you organize and track expenses and income, as well as generate financial statements.
Learning how to use this software can take time, though, and you’ll still have to manage your books on your own. Without expert oversight, you can make errors in your entries, which will cause even more problems later on.
Accountants, especially CPAs, are routinely hired by larger companies who require support with strategic business planning, forecasting, financial decision-making, and tax law clarifications.
If you just need bookkeeping support, though, an accounting firm might not be the right fit. Bookkeepers generally handle more administrative duties, while accountants offer expert strategic support. They can handle your books, of course, but that expertise often commands a hefty fee, which may be unaffordable to most small businesses.
If you have enough work for them to handle, you might consider hiring an in-house bookkeeper. When you hire a bookkeeper, you’ll gain an employee who can take the day-to-day work of managing and recording transactions off your plate.
Not every small business can afford to establish an internal accounting department or put a bookkeeper on the payroll, though. In addition to salary, you’ll have to account for other costs like insurance, vacation time, sick days, and retirement benefits. Don’t forget about physical costs, either: the bookkeeper will require office space as well as computer equipment, software, and other supplies to do their work.
Outsourced bookkeeping services are often the happy medium between DIY and an in-house bookkeeper—you gain expert support without having to pay a full-time employee.
Outsourced bookkeeping services employ experienced staff that can handle all of your bookkeeping tasks. They’ll prepare your financial reports, including balance sheets, and handle all of your accounts receivable, accounts payable, and credit card transaction entries.
Why you should outsource your bookkeeping
When business gets busy, many small business owners turn to outside experts to relieve their administrative burden. Here’s what you can gain by outsourcing your bookkeeping:
1. Save staffing and payroll costs
Adding a bookkeeper to your payroll will end up costing you more in insurance, benefits, and training expenses. Even if your in-house bookkeeper works part-time, your payroll costs will be high since you still have to cover the cost of employment taxes.
When you outsource your bookkeeping, you are paying only for the work completed, whether on a weekly or monthly basis. This avoids having to pay a staff bookkeeper who may have more idle time in between busy seasons.
2. Access a pool of experts and resources
An in-house bookkeeper often operates solo, which means they can run into unforeseen delays or problems without the resources to consult for assistance. They may also lack the necessary experience to adapt bookkeeping systems that support changes and expansions you make in your business.
Outsourcing your bookkeeping to a reputable firm gives you access to a deeper knowledge pool of experienced financial experts. An outsourced bookkeeper often manages the books for a variety of clients, so they’re more likely to stay up-to-date with state and federal regulatory measures that may affect your business now or in the future.
3. More time to focus on your business
Many small business owners discover the hard way that bookkeeping is a tedious and time-consuming task. In fact, the average small business owner spends eight hours a month completing their books—that’s a full day of work!
By outsourcing this task, you can focus your attention on growing your business.
Helpful resource: The ROI of Hiring a Bookkeeper
4. Enjoy a stress-free tax season
An outsourced bookkeeper is an invaluable resource when tax time rolls around since up-to-date financials are essential when you need to file your taxes. Your bookkeeper can provide you or your accountant with the information necessary to prepare your taxes accurately and quickly.
If Bench manages your books, we can even take taxes off your hands! When you upgrade your monthly bookkeeping plan, you can take advantage of personalized tax expertise, including unlimited tax advisory, one-on-one tax strategy planning, and annual tax filings for your business. Learn more.
5. Take advantage of the latest technology
An outsourced bookkeeper’s livelihood depends on maintaining efficient processes, which means they’re more likely to invest in technology to streamline their work and keep your information accurate.
Most outsourced bookkeepers take advantage of systems that automatically import transactions, which means less input from you, the business owner, is required. Your bookkeeper is able to categorize and reconcile your books without waiting for you to supply statements or receipts. Many also work with cloud-based systems, making your information both secure and easy to access from any device, anytime, anywhere.
6. Scale your books with your business
As your business grows, so does the need for additional bookkeeping support. But what happens when your in-house bookkeeper can’t keep up with the increased workload? Hiring and training another bookkeeper adds substantial payroll costs and cuts into your profit margins.
Conversely, what happens if your business has slow periods? Your staff bookkeeper stays on the payroll, receiving the same benefits for less work. Additionally, your employee tax obligation remains the same, even with less revenue coming in.
Outsourced bookkeeping services are flexible and easily scaled to fluctuations in your business needs. This is especially convenient if your business is seasonal since the service can easily adapt to the needs of your business.
7. Reduce the likelihood of errors
When you hire an in-house bookkeeper, you’ll need to vet their experience and expertise carefully. Once hired, they will need training and time to adjust to your business’s requirements and are more prone to making errors during this transition period.
At Bench, our bookkeepers go through over 60 hours of rigorous training and must pass the training program before working with clients. Before we deliver your monthly financials, multiple bookkeepers review your books, which means errors are far less likely.
8. Guaranteed privacy and confidentiality
Your bookkeeper handles sensitive financial data, so you should be able to trust that your financial records are always secure. Hiring an in-house bookkeeper means placing a significant amount of trust in one person while maintaining an ongoing professional relationship with them.
At Bench, we take security and compliance seriously, and your sensitive financial information will always remain private. Bench employees are subject to written confidentiality obligations and are prohibited from accessing customer data unless absolutely necessary.
You don’t have to take our word for it, though—check out our long list of positive reviews.
How Bench can help
Outsourced bookkeeping is what we do! At Bench, we take bookkeeping off your hands so you can worry about running your business. Your Bench bookkeeper imports, reviews, and categorizes your transactions every month, providing you with up-to-date financial reports that allow you to make better business decisions.
Our year end financial reports make tax filing a breeze, but if you’d rather outsource that as well, we can help. Upgrade your bookkeeping with a tax package that includes tax preparation, tax filing, and on-demand tax strategy planning. Learn more.
Ready to get started?
Accurate and up-to-date financial records are vital to the success of your business. There are several ways to manage your books, from doing them yourself to hiring someone in-house. However, outsourcing this function is the most cost-effective way of ensuring they are kept updated by a staff of skilled financial professionals.