(When) Should You Outsource Your Bookkeeping?

You’re a busy small business owner concentrating on the daily challenges of managing and building your business. It can be overwhelming differentiating your product or service from the competition, turning prospects into paying customers, and nurturing the ones you already have. Not to mention planning for the future. But you still need to communicate with clients, find new ones, make products, and provide services.

Let’s face it. You probably hate numbers. The last thing you want to do is look at them and trying to figure out what they mean. You only keep the books because you have to. And you do have to. How else will you know how your business is doing? Not to mention paying the tax guy. The frustration and anxiety of this task can not only affect your business, but your personal life as well.

If this sounds like you, you should consider outsourcing your bookkeeping to a qualified expert. What makes an expert qualified you may ask? They should be able to do all the following.

SAVE TIME……

Studies have shown that outsourcing bookkeeping can save business owners approximately 60 hours a year, or 5 hours a month. What would you do with an extra 5 hours a month? Finding more customers that bump-up the top line is a better use of your time than trying to do something you’re not an expert in and doesn’t do anything to boost revenues. How about building your brand? Recruiting high-quality talent? Focus on what you do best and do those things that build your business.

…AND MONEY

Those same studies also show that outsourcing your bookkeeping and can save small business owners an average of $7,500 a year. By hiring an independent contractor, you’re not responsible for paying for benefits and payroll costs like social security and unemployment taxes. With more accurate books, you can be assured you’re paying the least taxes payable under the law.

ACCESS TO EXPERTISE

Entering a partnership with a skilled professional not only ensures you’ll have the most accurate numbers for your business but can have other benefits as well. For example, many bookkeeping professionals are skilled in finance and can not only provide you with accurate numbers, but also offer input on what they mean so you can make sound business decisions for your business going forward. Some have other skills like marketing, employee development, and have a network of professionals that can assist in areas where either you don’t have expertise or with other problems causing bottlenecks in your firm. Ultimately, you’ll know where your revenue is coming from (and which products and services contribute to the top line, and which do not), if those revenues are turning into earnings, and if those earnings are generating cash flows.

TECHNOLOGY

Technology can be a positive or negative, depending on your point-of-view. For accountants and bookkeepers, it’s a definite positive. Using a cloud-based application like QuickBooks Online saves your information in the cloud, meaning you don’t have to save any paperwork, back-up files, or add security software. By using a cloud-based accounting application, you and your bookkeeper can access the books simultaneously. No need to lock up your computer system or freezing up another one because your bookkeeper must remote in. In addition, there are many types of Apps that can streamline processes, thus saving time and increasing productivity.

CONCLUSION

The question isn’t really should you outsource your bookkeeping, but when should you do it. When you’re first starting out, you can handle the books yourself. Once you start to find yourself falling behind on your books because your business is growing and your focus is not only finding new clients, but servicing your current ones, it’s time to hire a professional. Typically, this happens around $75,000 in revenue per year. Time is a finite commodity. Once it is gone, you can never get it back. You can’t be in two places at once or do more than one thing (productively) at a time. Focus on what you do best, which is servicing your clients with your awesome product or service and outsource the rest to a skilled professional.