An in house or outsourced bookkeeper is responsible for the recording of financial transactions within a business on a daily basis. They are tasked with keeping the organisation’s accounts – or general ledger – up-to-date by recording all transactions, debits (company costs) and credits (company income). They will then produce financial statements and other financial reports for managers to oversee.
For any business to be compliant and successful, it is essential to have a completely reliable bookkeeper who is adept at managing financial records and monitoring all necessary financial obligations. This can be someone who is a full-time staff member, however, many companies are finding it more beneficial to outsource bookkeeping services.
In-house bookkeeping vs outsourced bookkeeping
Depending on the needs of your particular organisation, outsourcing your bookkeeping might be a really valuable solution for your business. Here are some of the differences between the two:
- Costs – if your business requires straight-forward bookkeeping services, then outsourcing is a great solution as you will save on the costs of hiring a full-time staff member. However, if you have quite particular bookkeeping needs that require extensive time, then bookkeeping outsourcing might not be your option.
- Focus – an inhouse bookkeeper might perform other administrative duties if there isn’t sufficient bookkeeping for full-time work. This is great if you have a lot of duties to be performed, otherwise it might be a waste of money and time. An outsourced bookkeeper is trained for the profession and will focus all his or her attention on these duties.
- Time – outsourced bookkeepers will offer extended hours of service when needed, whereas an inhouse bookkeeper will probably work a regular 9 to 5 job.
- Fraud – although not always unavoidable, companies are generally more at risk of fraud with an inhouse bookkeeper than outsourced.
Risks of inadequate bookkeeping
The importance of an effective bookkeeping system in a workplace cannot be overstated. Whether you have an inhouse bookkeeper or are going for the outsourced bookkeeping option, you need to ensure you’re working with the best. Here are some risks to your business with inadequate bookkeeping:
- Incomplete bookkeeping processes and procedures.
- Inaccurate or late financial reporting.
- Fines associated with inaccurate or late financial reporting.
- An Inability to forecast or budget effectively.
- Poor or non-existent accounting technology integrations.
- Anxiety for the business owner.
- Possibility of theft or fraud.
How do you know if you need bookkeeping outsourcing?
Many small business owners might attempt to perform bookkeeping tasks on their own, and while this might work with mathematically proficient individuals or those with incredible organisational skills, it often becomes an untenable undertaking. An inhouse bookkeeper is an option, but smaller businesses don’t necessarily need a fulltime staff member which is why outsourcing is preferred. This frees up the business owners and other staff members to focus on achieving core business aims.
Why should you consider outsourcing bookkeeping?
- Downtime – while some times of the year are busier than others, you might find it unnecessary to have a full-time bookkeeper on the staff. By outsourcing, you don’t feel compelled to find other responsibilities or motivate a staff member who is bored at work.
- Business focus – as previously stated, by outsourcing the bookkeeping tasks, you and the remaining staff members are free to focus on achieving business goals.
- Professional touch – while you might have a grasp of the bookkeeping tasks, or you might hire someone for the job, it’s more likely that an outsourced bookkeeper has more experience than either of you.
- No staff-related costs – outside of the salary, an inhouse staff member requires paid leave, sick leave, time related to management and other associated staff costs.
Once you’ve fully considered your options and have come to the conclusion that outsourcing your bookkeeping is preferred, make sure you partner with an established, reliable bookkeeping and accounting company that will minimise your daily duties and maximise your profit.