Accounting has changed a lot in the last few decades. Long gone are the days when everything would be done by hand, marked down in a series of ledgers by an army of bookkeepers and their helpers. Now, things are done mostly online, with a variety of software systems available to help businesses manage their accounts and keep track of their finances.
You might be thinking that if you have access to QuickBooks and its great options for accounts management, you no longer need a bookkeeper. Tread carefully! Software is helpful, but it may not be enough to replace the hard-earned expertise of professionals in the field. Once you take a look at the facts, you'll soon realize outsourced bookkeeping is the way to go.
Do I Need a Bookkeeper if I Have QuickBooks?
Going It Alone? Mistakes May Happen!
Imagine you're at home when suddenly a household appliance, let's say your refrigerator, breaks down. Water is leaking all over the kitchen floor and you need it repaired fast. Sure, you could call a professional repair company to come out and do their stuff. But then you think to yourself that you have the same tools as the professionals, so you can save money by doing the job just as well!
Now things are much worse. Your refrigerator is leaking noxious gasses and may need to be thrown out. Now, you'll have to pay for a new refrigerator, as well as the services of a specialist cleaning company, costing you many times more money than if you'd simply hired a professional in the first place. The same applies in business. Just because you have the same tools as the professionals doesn't mean you'll be able to do the same job.
QuickBooks Limitations
There's no doubt that QuickBooks is a great tool. But it isn't a magic bullet capable of dealing with any bookkeeping challenge that may arise. That's why professional bookkeepers make use of a variety of specialist software to help them manage your finances. Much of it will be highly specialized and complicated, used only occasionally for specific, important tasks. If you are a small business owner you probably already encounter these types of problems.
You likely don't have the other complementary tools needed to make the best use of QuickBooks. An outsourced service will have invested in all the specialist tools they need to thoroughly rake over your records and document all the intricacies of your finances and inventory. If you tried to take the task on yourself, you'd have to go without and miss out on crucial elements of the process or shell out on expensive software you might use once a year.
Ensuring Long Term Success
If you're working to build a robust business that can stand the test of time, finances are incredibly important. After all, you won't be able to build for the future and invest in new staff and facilities without strong finances to back you up. When your finances are improperly managed, it can leave you without the resources to hire new staff or purchase new equipment to increase your revenue streams.
Quality bookkeeping will help you ensure your enterprise stands on a firm financial footing by giving you the resources to ensure healthy, sustainable profits, as well as the ability and confidence to build up further, expanding your business and your profit margins as a result. You'll avoid slips, meaning you can focus on more important things and you won't have to spend time worrying or trying to fix complicated problems.
Attracting Investment
When it comes to growing a business, one of the most important things anyone can do is attract outside investment. But any investor worth their salt is going to want to conduct due diligence on the business they're investing in, checking out your records and financial backing. Only once they've seen you have a strong record of profitability, or documentation showing good projected profits, will they be willing to part with their own money.
Having accounts laid out by a professional bookkeeper is much more appealing to outside investors than a set of documents you've prepared yourself. Not only will financial records from outsourced bookkeepers give a comprehensive overview of the financial development of your company, they'll show you're committed to doing things by the book and sparing no expense when it comes to earning financial success. But an investor might be put off if your bookkeeping is done by an amateur.
An Extra Pair of Eyes
Outsourcing your bookkeeping also gives a much-needed fresh perspective on your finances and an extra pair of eyes. Often, people who are around a business all day, every day, maybe even thinking about it long after they've gone home for the night, can get a little set in their way, or become absorbed in the company culture. Even with the best will in the world, this can lead to complacency and mistakes being made.
Let's say there's a hole in the finances due to a simple case of human error, perhaps the failure to document the sale of a certain product. The people who look at the books routinely every day might not notice it, but a fresh pair of eyes from outside the company can help to spot these routine errors and alert you to their presence before they become a major problem.
Hiring Pitfalls
While it may be tempting to hire an employee specifically to manage bookkeeping, this is often a bad idea for small to medium-sized businesses. Many companies only require one or two hours of bookkeeping per day, and so it's not cost-effective to hire a bookkeeper yourself. Hiring part-time isn't a solution either, since you'll likely have to shell out on training, vacation, health benefits, and everything else, costing you more than you bargained for.
Outsourcing companies operate at scale, with their well-trained employees working for multiple companies. This means savings for you, as the economy of scale means outsourcing is significantly cheaper. You'll also benefit from the expertise and talent of an entire company with solid infrastructure behind it, so it's far more effective than attempting to maintain your own bookkeeping department.
Hidden Complexities
The world of business finance can be a scary and confusing place. Maybe when you started out, you only thought of bookkeeping as a simple process, mostly involving the basic recording of everyday sales. And how hard can it be to run these basic numbers through a computer? But you've likely found out as you walked along the path of business ownership that things are rarely this simple.
Taxes, financial management, record keeping, and everything else that comes with bookkeeping can be incredibly complicated, full of twists and turns. There's a good reason professionals in this field spend years studying and training to navigate the complex world of business finance. There are so many little intricacies that the average person wouldn't come across, so it's always a good idea to have a little outside help.
Awesome Outsourced Bookkeeping Benefits
When you outsource your accounting, there are plenty of hidden benefits which you may not have considered. One of the key advantages is time management. Spending hours every day laboriously poring through your records, ensuring everything is up to date, can be extremely time-consuming. As the old saying goes, time is money, so it's an excellent investment to have someone else manage your books, allowing you to focus on other matters to keep your business going strong.
Sometimes, this approach may yield unexpected financial benefits. Since professional bookkeepers have a wealth of financial knowledge at their fingertips, they may be able to suggest ways you could save money or tax laws you can take advantage of. Or else, it can help you organize your storage and logistics more efficiently. When your bookkeepers can help you streamline your income sources and lower your overheads, it's a great investment for your business.
Do It Yourself Downsides
The potential ramifications of poorly done books or accounts can't be overstated. If things go wrong, it could have a huge impact on your business as well as your personal life. Not only could badly organized finances have serious repercussions for your business, costing you money and damaging your reputation, but they could also even lead to legal trouble.
Bad finances could lead to improperly filed taxes, resulting in an inspection from the IRS, or even a court date. This may result in needing to hire additional accountancy staff to sort through the work, or even paying huge amounts for legal help. It's much better to leave these important matters in the reliable hands of professional bookkeepers.
Get It Done Right the First Time
Just like many other walks of life, bookkeeping is a task that should be handled by experts. There really is no better way to ensure your business is well taken care of than outsourcing your bookkeeping. The benefits are endless and so are the many pitfalls you'll avoid.
Looking for quality service to manage the bookkeeping for your business, allowing you to focus on the day-to-day realities of business? Contact Pro Outsource Solutions today for a range of quality bookkeeping services.
