Outsourcing Bookkeeping Services, Is It Worth It?
The importance of efficient bookkeeping
Many organisations around the globe, both big and small, have found that outsourcing bookkeeping services are extremely helpful as they grow or expand. But to understand how it happened, we must first understand the importance of bookkeeping in a business.
In general, bookkeeping is the process of tracking, recording, and tabulating all the daily financial transactions of a business. Bookkeepers keep and manage information that can indicate performance and provide crucial insights for better strategic decisions and efficient cash flow management.
Efficient bookkeeping allows businesses to budget accurately, keep track of business targets, ensure compliance with existing regulations, and even prepare for tax filing. Without bookkeepers, budgeting and making business decisions will all be a matter of guesswork.
Knowing this, organisations have made bookkeeping an integral part of business. However, there is always a point where a company expands on a scale that requires more hands and brains to handle all the ledgers. This is the point where companies consider outsourcing.
How outsourced bookkeepers can help your business
There is a wide range of benefits that outsourcing bookkeeping services can give, and it always depends on why the company outsourced in the first place. Some businesses outsource to support their expansion, some outsource for expertise, while others outsource for access to talent.
Outsourcing providers source people from countries with a lower cost of living. This means companies can hire bookkeepers or even a whole bookkeeping team for a much lower cost, allowing them to save more resources that can be spent wisely on other parts of the business.
Moreover, many businesses look at outsourcing bookkeepers as a more practical and efficient solution when they need additional manpower because outsourcing not just provide talent, but also all the needed support for the team, such as office, HR, and IT support.
Partnering with an outsourcing provider means getting access to talent, support, technology, and infrastructure – a package deal that’s not too bad when the main goal is to get more savings that will enable your business to grow.
Skills and expertise
Outsourcing talent may come at a lower cost, but it does not mean that the quality is low as well. In fact, outsourcing providers specialise in finding certified bookkeeping professionals who will fit in perfectly with your requirements.
Experienced outsourcing providers maintain talent pools, allowing them to navigate the market and find professional experts with all the credentials, certifications, training, tool proficiencies, and even personal qualities and cultural compatibility that you need for the role.
In the Philippines, for example, where over 175,000 certified public accountants join the workforce every year, outsourcing providers have placed tested strategies to ensure their clients will only get the top bookkeeping candidates.
Time and focus
Many companies outsource bookkeeping services simply because it is not their expertise and they need skilled and certified professionals to do the job for them so they can focus on the core aspects of their business.
For example, by leaving the ledgers to outsourced bookkeepers, an e-commerce startup would have all the time and focus on logistics, marketing, customer engagement, and most importantly, drafting strategies that will allow its business to grow.
Imagine clocking in for work with all the financial statements already at the table waiting for you and your core team to make some analysis. Imagine making everyday business decisions with financial data prepared by a team of certified professionals.
Minimal errors, higher accuracy
Bookkeeping is a huge responsibility that needs attention to the slightest details, something that can be difficult to do if you are a startup juggling too many tasks with just a lean and mean team of finance professionals.
The risk of making errors is high in these kinds of situations. But with an outsourced team of professional bookkeepers handling your ledgers, you reduce the chance of committing errors that can otherwise have huge negative repercussions to the business.
On the flip side, having a dedicated team of bookkeeping experts focused on tracking all your financial transactions will give you data with much higher accuracy. When you reduce errors and maximise accuracy, handling day-to-day operations will be much easier.
Modern outsourcing models give companies much-needed flexibility in terms of internal finances and in terms of personnel — two things that are quite crucial when you are in an industry that needs to constantly adjust on a regular basis.
An accounting firm, for example, might land a big project that needs an extra team of bookkeepers, it would be much more financially practical to outsource than onboard new hires from scratch, as recruitment takes a lot of time and resources.
Outsourcing providers also offer flexible service level agreements that allow you to scale up and down as needed in terms of personnel. You can even customise how your outsourced team will work, from shifting, work arrangements, to even expanded functions when needed.
The outsourcing world is an industry that progresses alongside technology and partnering with providers will give you access to the best technologies and systems available in the world of finance and accounting.
When you outsource bookkeepers to experienced and reputable, you also get state-of-the-art facilities, hardware, software, and IT security that will boost your team’s overall productivity and give you a level of work at par with the giants of the industry.
Outsourcing may even improve your current systems and provide a more streamlined and centralised way to store, secure, and access information, such as cloud-based platforms that lets authorised members of your company access data wherever they are, whenever they need it.
With all the benefits of outsourcing bookkeeping services, even startups and medium-sized businesses can improve their business to the point that they can deliver services at par with their much bigger rivals in the industry.
Even just in terms of access to talent, especially now at a time of global talent shortage, having an outsourcing partner gives you a competitive edge because it allows you to tap into the global workforce when you need to look for niche specialists.
Bookkeeping roles you can outsource
A bookkeeper works on a lot of tasks that can sometimes overlap with the work of accountants. Generally speaking, the core duties of bookkeepers include data entry, reconciliation, and writing financial reports.
In certain instances, some bookkeepers may be required to calculate pay and deductions for payroll, do accounts payable and accounts receivable, tax filing, year-end reporting, and even creating budget recommendations based on data.
There are many advanced bookkeeping roles that you can outsource, but here are some functions that you can start with:
Outsourcing bookkeeping services may help you stay competitive in your industry, but it is not a one-time, solve-all magic solution to the pain points of a business. Instead, it is an investment that pays off with time, transparency, and effort from both the company and the outsourcing partner.
When finding an outsourcing partner, make sure to look for a company that has a good track record with its clients and a company that will listen intently and collaborate closely with you in providing business solutions.
If you have already found one, make sure to provide all the necessary details when it comes to your pain points, timeline, and requirements, so the outsourcing provider can come up with a plan that is tailor-fit to address your specific needs.