5 Signs It’s Time to Outsource Bookkeeping Services
Understanding Financial Ratios for Small Businesses: A Comprehensive Guide
Financial statements provide essential information about the company’s financial health and performance. However, the use of financial ratios enables us to analyze different aspects of the business, which are not evident by simply looking at the business’s financial statements.
It takes efficient and diligent financial management to successfully run a business, and bookkeeping plays a vital role in this aspect. However, that’s easier said than done. Managing your business’s in-house bookkeeping functions can not only be a hassle that requires too much hands-on effort but can also burn through your resources. Whether it’s bank statement reconciliation, invoicing, inventory, or budget reports, bookkeeping can become a headache for business owners.
Many businesses (especially small to medium businesses) need help in determining whether they need to outsource bookkeeping to handle their bookkeeping or handle it internally. It’s important to remember that each business’s needs vary from another. However, there are common telltale signs that indicate when you should start looking into outsourcing bookkeeping services. It’s important to learn these common indicators to determine whether hiring professional bookkeeping services is the right choice for you.
Top Five Signs It’s Time to Outsource Bookkeeping Services
You might have been receiving late payment complaints from your employees. Or perhaps your invoice records don’t match up. Either way, you’re suspecting that something is going wrong in your bookkeeping. Here are the top five signs that mean it’s time to hire bookkeeping services for your business:
- Bookkeeping Has Become Too Time-Consuming
If you’re spending late hours in your office to take care of your daily bookkeeping needs, it’s high time you need some expert help. Running a business requires your attention on more priority tasks and something as mundane as daily bookkeeping tasks should not be taking up all that time. Outsourcing bookkeeping services from a firm can take that load off your shoulders.
They can not only handle all your daily bookkeeping operations but also provide you with crucial KPIs (key performance indicators) to measure your productivity. Professional bookkeeping services are equipped with industry expertise and relevant insights that promote your business’s growth rather than eating away your time, efforts, and resources. So, if you find yourself fiddling with numbers and statements, then maybe it’s time to seek external bookkeeping support from professionals.
- You’re Ready to Scale Your Business
Maybe after a successful start-up or a period of stagnancy, you’ve decided that you’re ready to scale up. This is an indicator that now might be a great time for you to hire bookkeeping services. When you’re scaling your business, you need to focus on strategies, investment acquisitions, and business planning, and not on gaps in your bookkeeping.
Allow yourself one less thing to worry about during this crucial time. Business scale-ups are the perfect time to outsource bookkeeping to free up the time your priority tasks require. Outsourcing your bookkeeping while scaling your business allows you to concentrate your efforts on company growth, boosting revenue, prompting your brand image, strengthening customer relationships, and meeting company objectives.
- You’re Often Stressed About Audits
Your payroll data, invoices, and other financial paperwork are all piled into a filing cabinet and collecting dust and cobwebs. Are you sure you’d be able to find the relevant documents easily if you were to receive an IRS audit? If the answer’s no, then it’s time for you to consider outsourcing professional bookkeeping services. Your financial records should be organized and up-to-date at all times for you to always be prepared for an audit.
Disorganized financial records can lead to serious issues such as missing, stolen, or changed documents, which exposes you to penalties or serious implications. Bookkeeping services not only just organize your financial records but allow you easy access to them whenever you need it. If an IRS audit has you needing your bank statements from 5 years ago, your outsourced bookkeeping service will be able to provide the exact data you need when you need it.
- Delays in Payroll Have Become Normal
You might be finding yourself at your wit’s end with constant employee complaints and feedback about delayed payroll. Maybe it’s because you’re short-staffed or your team is lacking in productivity. Regardless, if you backslide on your payroll all the time, you require serious external support.
Your employees look up to receiving timely and accurate payouts for them to perform optimally to promote your business’s growth. Not paying enough mind to this issue can create difficulties for both you and your business’s growth. The solution is to outsource some or all of your bookkeeping needs.
Depending on your situation, you might not need to outsource all of your bookkeeping, as many firms offer partial bookkeeping services to work alongside your in-house team for payroll. By ensuring that invoices and paychecks are always paid on time through outsourcing, you can avoid dealing with unsatisfied employees or legal issues.
- In-House Bookkeeping Is Raising Your Expenses
An in-house bookkeeping team can surely keep your bookkeeping needs satisfied. The expenses of keeping an internal bookkeeping team, however, are high and include office space, software and tech, training, benefits, and salary.
If you don’t wish to spend all your funds on keeping in-house bookkeeping, switching to outsourcing bookkeeping will provide you with substantial cost savings. With external bookkeeping services, you only pay for the services you receive, cutting down all the excess costs otherwise required from an in-house team. This approach saves you time and money and redirects your resources to your other vital business operations.
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Tips to Choose the Best Bookkeeping Services for Your Business
If you’ve made up your mind about outsourcing your bookkeeping, you might need help in determining the right bookkeeping service for your business. Follow these tips below to help you make an informed decision to select the best bookkeeping services for you:
- Identify Your Needs: To evaluate your bookkeeping requirements, outline the level of support you need in tasks such as invoicing, payroll, financial reporting, etc.
- Define Your Budget: The pricing structure of bookkeeping services varies according to firms, services, and level of the enterprise, so defining your budget will narrow down your options.
- Review Service Scalability: Check to see whether the services they offer are scalable, which you might need as your business grows.
- Assess the Range of Services: Review the range of services provided by a bookkeeping firm and see if they satisfy your requirements.
- Check Industry Experience: Check for qualifications, certifications, and industry experience in a firm when hiring their services to determine their credibility.
- Observe Client Reviews: Look for client reviews to gain insights about the firm’s credibility, service quality, and flexibility to determine if they’re a right fit for you.
Take A Step Towards Streamlining Your Bookkeeping Processes
Delayed payments, stress from an audit, or too expensive in-house bookkeeping are all common indicators that you require professional help from an expert bookkeeping firm. Although delays and errors in bookkeeping are common sometimes, an increase in them can jeopardize your business’s growth. Outsource your bookkeeping and leave these tasks to the professionals. Proper bookkeeping means that the supporting pillars of your company will always be intact enough for it to continue growing and prosper.
