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Why Outsourcing Your Accounting Could Be The Right Solution For Your Small Business

Let’s do a quick exercise, okay?  How much do you, as a professional, charge for your time?  That answer might be easy if you’re an attorney or a doctor, but what about if you own a restaurant or a small marketing agency?  Then it is a lot tougher.  You, as the founder and owner, likely are the last one to get paid and, for a lot of companies, whatever profit there is simply flows down through the company until it shows up on your tax return.

Stop it!  If you own your own business, no matter what it is, you are an expert at it and that means that your own time commands a premium.  Is that $30 an hour?  $50 and hour?  $200 an hour? THAT I don’t know, but I know that companies routinely pay managers well over $25 an hour for their time, so why should you, as the founder and owner, command any less for your time?  You took the risk, you opened the doors, start to value your time! When you look at your time in this way, doesn’t it make more sense to outsource some of the costs of doing business?   How about outsourcing professional needs like bookkeeping and accounting?

Time is Not Your Friend

If there is one thing that we’ve learned over the years, it is that “time” is the one thing that most small businesses and entrepreneurs never have enough of.  One of the first things we do when an owner has finally decided to outsource their bookkeeping is to ask them how they have traditionally handled the bookkeeping tasks and inevitably, the answer is, generally, “as an afterthought.” Sad but true, the one task that intimately involves profit, loss, and taxes and most owners aren’t able to take the time necessary to handle the task on a basic level.  We’re not saying that to be mean, or mock small business owners, but handling the books, even with great digital products like QuickBooks or Xero, is often portrayed as “easy” or an afterthought to doing business. 

The truth is, bookkeeping and accounting are tasks that are critical to your company’s success and having professional assistance – even part-time – can be a powerful tool for your financial success.  In our experience, many small businesses and entrepreneurs aren’t ready to hire a bookkeeper full time – or even part-time, but those tasks can still be hired out with great success and far less costs than most owners ever thought possible. 

Bookkeeping in the Digital World

The reason that we’ve been able to build out a virtual model for bookkeeping is simple – the vast majority if small businesses are using software for their books, and since our team is familiar with all the bookkeeping suites available, we designed a simple system for our clients to outsource all their bookkeeping AND spend less time than they ever have before to get their financials together. 

Remember when we mentioned that most owners “do the books” at the last minute and as an afterthought?  We did too, so we designed a process that didn’t make business owners spend any more time than they already were doing but gave them great results.  The fact is, outsourcing bookkeeping and accounting tasks really is not an expensive proposition, but it is a very sound business practice. 

Just as importantly, the connectivity we enjoy today allows owners to outsource bookkeeping to nearly anywhere in the country (yes, you could outsource worldwide, but then, there is the question of security and the contractor’s understanding of bookkeeping rules and U. S. Tax Code). 


Fixed Rates Equal Fixed Costs

One of the biggest challenges with hiring even a part-time in-house bookkeeper is the costs.  Generally, these employees are paid either a salary or hourly and, as employees, have certain rules that employers must follow.  As a company grows, that salary grows, too, until, at the C-Level, a Chief Financial Officer is easily a six-figure expense. By contracting out your bookkeeping, many companies, ours included, charge a flat rate for monthly services.  Usually, there is a setup charge as well to make sure that you and your company’s systems “speak the same language” and that the books and financials are clean, but after that, outsourced bookkeeping is charged as a fixed cost, one that can be easily projected and budgeted for every month.

Automatic Notifications

Traditionally, in-house bookkeepers run the financials and then either present them or submit a report.  How many times have you, as the owner, been in a rush and had to make a critical financial decision based on a conversation with your bookkeeper in the hallway while you were running to a meeting? Do you think you might have missed some information?
We did too, so when BookkeepWithUs designed our systems, we built in monthly reporting as an automatic notification.  Our clients can review financials at their leisure and, when they have a question, simply reach out to us to discuss any challenges.  For companies where the principals travel or are constantly on the go, the benefits of outsourcing bookkeeping and accounting tasks into a system like this are clear – the information you demand and the “face time” you need – but only when you need it.

There’s another, less obvious, benefit to the outsourced bookkeeping model we’ve built – plenty of months in the year end on weekends.  If you handle all your bookkeeping in-house, then you may not get accurate financials due to your staff not being at work. You guessed it – automation and outsourcing these responsibilities means that all the financials you need are sent out at the same time, month after month.  Our system is based on automation, but it’s not automatic.  Nonetheless, our standard supplies our clients with all their financials at the same time each month, allowing them to easily compare data without that is not skewed due to slow reporting.

Automating and Outsourcing to Save

The trends in small business today are all digitally based and accounting and bookkeeping is no different.  As we have built, modified, and tested our own systems to meet the needs of our clients, the data in our studies has piled up.  To put it simply, outsourcing saves money, saves time, and yes, it saves companies.  As an owner and a founder, you have bigger challenges than learning accounting and bookkeeping software and, when you factor in how valuable your time is, it’s critical that you take a page from Michael E. Gerber’s book The E-Myth Revisited and “work on your business, not just in it.”


By: Chris Groote

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