Businesses choose to outsource for a variety of reasons, the first of which is to reduce operating costs. Another reason can be to free up internal resources to be used for other purposes, and thus run the business more efficiently. An additional reason for choosing to outsource, is that the service/function is either difficult to manage or out of control within the business; it is best to outsource at the first sign of this happening, instead of waiting until later. Finally, businesses, especially small businesses, sometimes choose to go with an outsourcing service because there are simply not enough resources/employees available within the business to handle the function that is being outsourced.
Reasons for Choosing to Outsource Bookkeeping Services
Bookkeeping is a complex, and time consuming task. Not all employees are qualified, and skilled enough to manage a business’s bookkeeping needs. Outsourcing bookkeeping services allow a small business to focus on the core of the business, and to save money at the same time. Sometimes a small business will choose to contract out accounting to another company because it allows for consistent reconciliation, and is helpful when it comes to fraud prevention. In addition, hiring an outsourcing bookkeeping service provides a small business with access to the expertise of accounting specialists, and the accuracy that comes with years of experience in bookkeeping. Let us not understate the value of the expertise needed. Even seasoned professionals have difficulty sorting out the various start-up expenses, some of which are tax deductible and some not. What chance does an amateur have of getting it right? Misclassification of expenditures may either trigger an audit or cause deductions to be left on the table; both of which are costly mistakes.
How Can Outsourcing Bookkeeping Services Be Cost Effective?
Although it may seem counter intuitive, choosing to outsource can actually be more cost effective to a small business than having the work done in house. This is why. Business owners who choose to subcontract their accounting face a reduction in their employer payroll taxes. A salary does not need to be paid to a full-time accountant or bookkeeper, and no classified ads, screening interviews, or training is necessary to hire one. Business owners who choose to use outsource bookkeeping services do not have to fund retirement plans or worker’s compensation insurance for a full-time bookkeeper, either. Moreover, there are no vacation or sick days to be considered for an employee to do bookkeeping work.
In addition, the space, office equipment, and supervision that would typically be needed for a full-time employee to keep up with accounting for the business can be put towards other, more urgent projects and purposes within the business.
Why Should a Small Business Use Outsource Bookkeeping Services?
Choosing to subcontract can be ideal for businesses that find bookkeeping to be time- consuming, difficult, and hard on the business budget or resources. In addition, outsourcing can increase accuracy in accounting and give business owners access to relevant and accurate information in little time, with little effort. If a small business is interested in saving money, outsource bookkeeping services can provide expert bookkeeping services for less money than it would cost to hire a full-time employee to do the same work, freeing up capital and space within the business.