How do you know if you should utilize outsourced bookkeeping services for your business?

For business owners or managers, leveraging outsourced bookkeeping services can be extremely advantageous in certain scenarios. In other scenarios, however, choosing to outsource your bookkeeping can hurt more than it helps. Here are some of the most important factors to consider when determining if outsourcing bookkeeping is right for your business.

Expertise Required for Your Financials

As an organization grows, its finances usually become more complex, even the more routine bookkeeping and accounting tasks. Organizations typically solve for this by adding more mid- and senior-level staff to the finance team. This can become costly, inefficient, and even risky, but it seems like the safer bet rather than bringing on more inexperienced bookkeepers or offshore bookkeeping staff. 

Business owners and managers shouldn’t have to choose between expertise and (cost) efficiency, though. Outsourced bookkeeping services often allow organizations to access both experienced and expert bookkeeping resources for specific verticals and niches. This allows an organization’s finance function to learn from accounting and bookkeeping professionals that have experience in their industry or with organizations that have successfully accomplished similar objectives, which allows for faster growth and alleviates some of the growing pains associated with scaling. 

In most situations, outsourcing empowers an organization to get both the expertise and efficiency they need. When the bookkeeping is run in-house, there’s a constant friction between quality, cost, and the expertise needed, and that can be remedied through outsourcing.

Time, Focus, and Energy

As a business leader, your time is best spent on strategy and core business activities, and your focus and energy is best spent on your core competencies. If you find yourself spending too much time “in the weeds” of your books either correcting errors or trying to understand certain routine bookkeeping tasks, then it is likely time to consider outsourced bookkeeping services. 

Finding the right provider can actually help you get more out of your time. A good bookkeeping outsourcing firm should have dashboards, reports, and intel that make it easy for you to make data-backed decisions faster and more accurately. 

Budget and Risk Tolerance

Budget
Outsourcing bookkeeping is often the most cost-effective way to satisfy your bookkeeping needs and requirements. Even if the fee you pay to the outsourced provider is more than you would pay a full-time equivalent bookkeeper, when you factor in the salary, training, benefits, taxes, technology costs, and other overhead associated with having someone in-house, paying for outsourced services often comes out ahead. Additionally, the cost of in-house turnover can be significant, nevermind having to “start and stop” on initiatives and progress.

Risk
Organizations often feel that having their own internal staff handle bookkeeping is less risky than outsourcing, but that simply isn’t the case. Outsourcing providers have a reputation to maintain, and any security compliance issues or similar challenges can negatively affect that reputation and thus their business prosperity. As such, reputable outsourcing providers go to great lengths to ensure they mitigate their security, compliance, and theft risks, likely far beyond what the majority of organizations do for in-house bookkeepers.

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The decision to use outsourced bookkeeping services can be challenging; however, if you can assess your true cost of ownership of conducting bookkeeping in-house, you may find that outsourcing is the more appropriate way to go. If you’d like to discuss what it may look like to outsource bookkeeping, please request a consultation here and talk to a professional that can help you discover if now is the right time to outsource your bookkeeping needs.