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You’ve created a business, made some purchases, and reported sales; now it’s time to keep track of everything. We understand if the prospect of keeping track of all your transactions makes you cry, but you’ll never have to worry about it if you outsource bookkeeping services.
The question now is how to ask someone else to keep all of the records. What types of tasks can a bookkeeper assist you with? Why should we think about outsourcing bookkeeping?
This article will provide you with all the information you need to make crucial decisions about outsourcing your bookkeeping.
Consider that your company is expanding, and you are constantly bringing in new clients. As a result, you’ve opted to outsource bookkeeping to a third party. Hiring an outsourced bookkeeper to do all of your business’s bookkeeping obligations is known as outsourced bookkeeping.
In essence, outsourced accounting entails contracting an outside individual or team to handle your company’s bookkeeping needs. Outsourced bookkeeping service providers are companies with area-specific competence in managing their clients’ bookkeeping needs.
You can either engage an outsourced bookkeeper to work with your software or entirely outsource the task; in that case, they will use their software, and you will only have to pay for the service.
Nobody begins a company to do their bookkeeping. Outsourced bookkeeping frees up time for you to focus on running your business, exploring new development prospects, or simply relaxing and unwinding from the demands of entrepreneurship
You also receive access to the crucial reports and financial statements that every business owner should be aware of with outsourced bookkeeping: balance sheets, income statements, and cash flow statements.
Aside from day-to-day operations, having a professional handle, your bookkeeping speeds up the tax filing procedure.
The processes needed in using an outsourced bookkeeping firm will vary depending on your company’s needs. Furthermore, the complete procedure will differ based on the service you select. For example, if you engage a professional bookkeeper, the bookkeeping procedure will be different from if you choose the hybrid option.
A robust approach will be in place for established outsourced bookkeeping specialists. It usually works like this:
To begin, you schedule a meeting with your preferred bookkeeper. The bookkeeper’s first task will be to figure out what you’re already dealing with. That is, he takes the time to learn about the software and tools you use to record and store your financial activities. He will then proceed to set up integrations so that he may continue working on the platforms you use while also doing all of your bookkeeping responsibilities.
The next stage in the process is to collaboratively create a scope of work. It is the manager’s responsibility at this moment to properly communicate the needs and intended outcomes from an outsourced service.
Based on this conversation, the outsourced bookkeeping firm can recommend the type of team hired to complete the tasks and meet the client’s needs. Working with an outsourced bookkeeper has the advantage of allowing you to scale up as your company grows. The bookkeeper will assume command and begin working with the program they were previously acquainted with.
He will keep track of your financial transactions and categorize them in an orderly manner. He will then conduct a reconciliation process to check that everything is in order and there are no discrepancies.
If necessary, the outsourced bookkeeper will allocate a team of bookkeepers based on the client’s needs. This group of professionals will be equipped with the knowledge and experience needed to assist the client. The team that will be employed is usually determined by the type of activity and the timeframe.
The bookkeeper will keep you informed by delivering your financial statements as frequently as you request. He can, for example, provide your financial statements every month so you know where your company stands in comparison to where it should be. The bookkeeper will guarantee that the transactions are accurate.
The bookkeeper is accessible to you if you have any queries or worries about bookkeeping. This allows you to collaborate with the bookkeeper, ensuring that you, your staff, and the bookkeeper are all on the same page.
After the team has begun working on assigned tasks, the only thing left to do is set up a review and feedback method. The client can use whichever review method they want, and the outsourced bookkeeper will follow it.
Between bookkeeping, accounting, and taxes, it turns out; there’s a lot of grey space. Your bookkeeper’s precise set of responsibilities varies from person to person. So, if you choose to outsource your bookkeeping, what exactly does that entail?
Any of these responsibilities can be handled by an outsourced bookkeeper or bookkeeping service:
● Bookkeeper imports financial data from bank statements, credit card statements, payroll records, and invoices.
● The bookkeeper categorizes and reconciles those transactions to ensure that everything is in order. This procedure entails comparing your company’s bookkeeping records to those on your bank statement or bank account. Every organization needs bank reconciliation because it protects them from fraud, allows them to balance their books, makes auditing easier, and identifies irregularities.
● Keeping track of bills and unrecognized earnings (accounts payable and receivable management)
● Keep your books up to date and accurate at all times. That work is likewise delegated to an outsourced bookkeeper, who guarantees no errors. If he discovers any inaccuracies, he informs you as soon as he finds them.
● On a monthly or quarterly basis, the bookkeeper provides you with accurate financial statements at the end of the month, including Profit & Loss (Income) Statements, Cash Flows, and a Balance Sheet.
● Giving investors, tax preparers, and anybody else who needs access to thorough and accurate financial reports.
Because the cost of outsourced bookkeeping varies depending on various circumstances, it isn’t easy to give an accurate figure. According to experts, the cost of outsourcing bookkeeping typically starts at $500 and can rise to $2,500 each month, equating to $6,000 to $30,000 per year for a company.
However, the cost varies depending on whether you want a software package in addition to a bookkeeper or only a bookkeeper. If you need financial reports regularly, the cost of outsourced bookkeeping will be more than if you need them occasionally.
Businesses that don’t want to invest in a bookkeeper, software, or both often outsource bookkeeping. Even if you’re a startup, keeping track of your finances is critical since it helps you make important business decisions. On the other hand, the hassle might be overwhelming, which is why you might be inclined to try outsourced bookkeeping.
