Bookkeeping can be a headache for any business. That’s why 46% of business owners claim it as their least favorite task. In order to sustain, organizations have to keep a close eye on expenses. In doing so, many business owners or associations do bookkeeping themselves in software like QuickBooks or look over the shoulder of their bookkeeper to keep an eye on the finances.
But which is the better approach here? Is it DIY? Is it hiring in-house? Is it outsourcing? Well, the answer depends on your situation. The progress of your business and its size decide how many members/hours are needed in your accounting department. Roles like staff accountant, bookkeeper, accounting manager, CFO, etc, require salaries, plus the cost of benefits, PTO, IT, overhead, and overtime as well to run the accounting department of your business. Additionally, there are other benefits too that you have to give employees without question. And while you’re in this process, you must account for a straightforward fact. A good in-house bookkeeper is probably better in some cases than an outsourced bookkeeper, but outsourced bookkeeping is much better than a bad in-house bookkeeper. Let’s see why.
A Bad Accountant/Bookkeeper is Bad For Business
While in-house accounting has been the traditional form of business bookkeeping around the world, companies are increasingly shifting to outsourced accounting solutions. The primary reason is quiet quitting, which has surged as a trend in many industries.
If hiring is done incorrectly, then a business might end up even losing money due to wrong bookkeeping and accounting. And while there’s no lack of options if you want to hire an accountant, not all accountants are good accountants. A recent case in Wakefield, Nebraska, highlighted how an accountant stole more than $109, 000 from a church.
Outsourcing your bookkeeping and accounting helps remove the burden of hiring, managing, retaining, and staff training. Additionally, many businesses see it as a smarter, cost-effective, efficient, and viable alternative to in-house accounting.
When is Outsourcing a Good Idea
Most bookkeepers only handle sales taxes, billing, deposits, collections, payroll, bank account reconciliation, etc. As a business grows, a business owner is no longer involved in every aspect of it, that is when your needs increase more than just bookkeeping. At this growth stage, businesses need both financial and management reports for their company. A bookkeeper simply cannot deliver what a business owner really needs in such a growth stage: management accounting. That’s why when you reach a point when a bookkeeper is no longer sufficient for business needs, it’s the right time to start outsourcing your work. Although, some of these triggers might also result in this,
- Get more out of QuickBooks than just billing and collections
- Employing eight to ten people
- Need for more sophisticated financial reports for an informed data-based decision-making
- Accepting capital from an outside investor(s)
- Entering the accelerated growth stage of the business lifecycle
Benefits of Outsourcing Accounting Services
While saving money is one reason many businesses outsource their accounting function, it is certainly not the only one. Here are a few other benefits you must account for.
- Access to Finance and Accounting Expertise:
As most businesses have a fluctuating need for a bookkeeper, accountant, controller, and CFO levels. They can’t hire all of these as it’ll demand additional cost. Outsourcing accounting and finance allows you to receive services as needed, and at a cheaper price.
- Time Savings for Business Growth:
In the growth stage, businesses often find themselves spending more time managing their money and less time scaling the business. Therefore, by outsourcing administrative tasks like bookkeeping and accounting, you get to focus your time, energy, and resources on creating business strategies and driving business growth.
- Gain Flexibility To Meet Business Needs:
Most accounting and bookkeeping service providers are charging on an hourly basis. It means you can scale up or scale down the hours without any interruption.
- Round-the-Clock Service Access:
Outsourcing accounting and financial activities to a firm help your operations run 24/7 and in some cases, with a time-zone advantage. This way you get to easily avoid turnover problems and staff time off issues. Resulting in all major tasks being completed on time.
Is There a Need For an Accountant If You Use QuickBooks
There was a time when keeping books meant paper ledgers, sharp pencils, and a lot of record-keeping. But now with technological advancement, things have changed. Softwares like QuickBooks lets you manage work effectively and within a few clicks. As you can easily download and categorize financial information as needed. But that’s not all, any accountant provides strategic advice and support that enables you to run your business, which any software won’t be able to do.
In all, QuickBooks is an enabler in the process and not the one-stop solution.
Keeping your books clean and accurate is an integral part of running a business. In reality, you don’t always need an accountant for them, but if you run a business, you should certainly have one. Even if you don’t think you need an accountant, 89% of small businesses surveyed by Intuit say they are more successful with an accountant firm by their side and advising them with growth insights. Now that is a significant number and something worth considering when making your decision, regardless of your situation.