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A Comprehensive Guide to Outsourced Bookkeeping Services

A Comprehensive Guide to Outsourced Bookkeeping Services

19 Sep 2023 A Comprehensive Guide to Outsourced Bookkeeping Services

As your business expands, the more time your bookkeeping tasks take. As a business owner, you may find your team spending hours categorising transactions, checking receipts, and compiling detailed reports. Perhaps filing tax returns becomes tedious because of the unorganised spreadsheets. Although accurate bookkeeping is crucial for your business, you prefer increasing sales to doing administrative tasks. This is where outsourced bookkeeping services come to the rescue, saving time and maintaining smooth regulatory compliance.

Difference Between Bookkeeping and Accounting

Bookkeeping includes the basic steps of processing financial transactions. A bookkeeper collects, records, categorises, and verifies all transactions based on the list of accounts (liability, assets, capital, expenses, and revenue). In contrast, accounting summarises the transactions a bookkeeping professional recorded and organised. The financial summary can be quarterly or annual reports for tax preparation, budget planning, and other related purposes.  The bookkeeper is responsible for the details of each transaction, and the accountant is in charge of reviewing and analysing the financial data. 

The accounting professional also provides easily understandable annual financial statements. However, the year-end reports prepared by the accountants should abide by the Financial Accounting Standards Board (FASB) standards.  It is an independent non-profit organisation responsible for establishing financial reporting and accounting standards for companies and non-profit firms in the US.  Moreover, FASB provides a basic set of accounting procedures and principles called Generally Accepted Accounting Principles (GAAP). Complying with GAAP can save business transactions and result in good accounting practices. 

Understanding Outsourced Bookkeeping

Outsourced bookkeepers are third-party service providers specialising in classifying transactions and reconciling account balances. Bookkeeping professionals are tasked with back-office operations to organise the financial data. Responsibilities of the outsourced bookkeeping services include: 

  • Categorising transactions, including receipts and firm expenses
  • Tracking bills and recording revenue upon payment
  • Reconciling accounts timely and regularly
  • Preparing financial reports for investors or lenders
  • Compiling tax documents to facilitate the return filing procedure

Bookkeepers do not usually analyse any trends in financial data; accountants do analyses. However, some bookkeepers help you identify high spending or weak cash flow. 

Why Do Businesses Outsource Bookkeeping Services?

Entrepreneurs and business owners are outsourcing bookkeeping services for many reasons. Among the many perks of outsourced bookkeeping services, some of the most significant ones are cost-effectiveness, flexibility and scalability, and smooth compliance.  

1. Cost Savings and Financial Efficiency

Hiring any full-time bookkeeper means interviewing, training, and paying a handsome salary. On average, the annual salary of a bookkeeper is approximately $46,000, with additional compensation expenses like benefits, office equipment, and taxes. Furthermore, employers face a reduction in productivity during workers’ paid time off.  On the other hand, outsourced bookkeeping helps business owners save costs and enhance financial efficiency as bookkeeping companies only charge for their services, sparing the overhead expenses. You can try our budget-friendly services and improve your efficiency by 100 times.

2. Access to Expertise

The industry expertise of workers is what helps your business thrive. You need a professional team of bookkeepers to have basic skills to manage bookkeeping tasks. This is where outsourced bookkeeping services come as a ray of hope, as you can benefit from experienced bookkeepers who offer accurate reconciliations. Outsourced service providers customise their solutions according to your company’s unique needs, and you will get all your bookkeeping tasks done by individuals having industry-specific experience. Working with seasoned outsourced bookkeepers ensures accurate categorisation and account reconciliations in your financial processes. 

3. Time Management and Focus

Hiring outsourced bookkeepers ensures the smooth functioning of your business without any interruption. Rather than burdening with account reconciliations, it saves time to conduct meetings with customers or better manage your team. As a business owner, consider delegating bookkeeping tasks to team members. However, outsourcing bookkeeping services can free your employees from multitasking to concentrate on demanding business tasks. Outsourced bookkeeping services offload all your bookkeeping tasks to skilled professionals, helping the team work hard towards satisfying the customers. 

4. Scalability and Flexibility

As the company grows, so do its bookkeeping demands. If your business doubles its sales, you must hire a service provider to facilitate rapid growth. If your company experiences any seasonal fluctuations, you might need less assistance during that period. Outsourced bookkeeping service providers can scale their efforts as per your business’s unique needs. Such firms have a team of skilled bookkeepers who can seamlessly accommodate your firm’s changing demands. Their adaptability ensures your company gets the necessary attention, irrespective of its current circumstances.

5. Smooth Compliance

Outsourced bookkeepers perform account reconciliations throughout the year. This proactive approach means you can access financial statements timely, preparing for seamless payroll reports and tax filings. Rather than rushing to compile data when required, you can have current documents readily available with outsourced bookkeepers. This helps your team to respond to any payroll or audits effectively. Outsourced bookkeeping is integral to facilitating accurate and smooth business compliance.

Who Benefits from Outsourced Bookkeeping Services?

Bookkeeping is a crucial process for any business that can build its image or damage its reputation in the market. It is necessary to consider how your business should manage bookkeeping processes properly. Many entrepreneurs and business owners need clarification about how they should come to know whether to use outsourced automated bookkeeping. Outsourced bookkeeping services may be your go-to option if the below-mentioned things apply to your firm.

  • As a business owner and your team, you must gain experience reconciling accounts or categorising transactions. 
  • Process a pile of transactions every month.
  • Buy services and goods from multiple service providers or vendors. 
  • Sells various service or product offerings.
  • You and your team need more capacity to manage bookkeeping tasks.
  • Your company is expanding or focusing on the growth strategy.
  • Investors are pouring significant capital into your firm.
  • Always need help updating your books on time.
  • There is a need for more refined and accurate financial reports to get data-driven insights.
  • Are required to submit detailed and accurate financial records for bank loans
  • Need help adhering to the government standards.
  • Can hardly track Accounts Receivable (AR) and Accounts Payable (AP).
  • The DIY approach is costly or ineffective.
  • Need temporary or additional service to get help with recording and organising financial records.
  • Can not correctly monitor the firm’s cash flow.
  • Want access to the sophisticated technology that may automate accounts or help your business manage any other tasks.
  • Decide to sell your firm and want to maximise its value.
  • Begin to lose trust in your accountants.
  • Start to lose money due to continual errors whilst recording financial data.

Many other indications help you decide whether to proceed with outsourcing. However, it is important to take action immediately after observing some of the above-mentioned signs.


Suggested Read: Top Features to Look for in an Automated Bookkeeping Solution

How Can RecordMe Help?

You might be worried about managing the back office as it takes much of your time that would otherwise be used on other demanding business operations. The wise step is to hire an experienced outsourcing company; this is where RecordMe fits into the puzzle. The AI-powered Financial Bot offers you customised outsourced bookkeeping services, and that too at an affordable rate. 

Are you still confused about whether outsourced bookkeeping services are for you? Contact us; our team of skilled bookkeepers will help you decide