Why you should outsource your bookkeeping?
As a mid-sized business, you are always under time constraints and budget pressures. You have to worry about generating a product that will sell while reducing costs. You may feel that controlling every part of your company is impossible, and your bookkeeping is no different. But, what can you do, hire a bookkeeper, continue to do it yourself? You could, however once your business has reached $1 million in revenue, it's time to consider outsourcing your bookkeeping.
You may be thinking - I’ve reached a $1 million in revenue, but do I really need to outsource my bookkeeping?
You need expertise.
Having dedicated professionals who can provide you with accurate and on-time financials is crucial.
Outsourcing your bookkeeping gives you access to executive financial knowledge without having someone with that knowledge on the payroll. Placing your bookkeeping into the hands of highly trained and experienced consultants who understand how to apply best practices makes your job easier.
Stop wasting time figuring out your financials and engage someone who can explain them to you quickly. Gathering a high-level review of your financials is imperative to your company's success. The greater the transparency in your numbers, the better. Not understanding your burn rate or your exact client margins can kill your profits. The more insights you have into what is driving your bottom line, the more effective your decisions will be.
You need efficiency.
It's hard to be highly efficient when a part-time person is managing your books. You may think this is all you need as your business is only at $1-2 million in revenue, but this is not efficient or practical long term. There are many advantages of having a team of outsourced bookkeeping professionals versus an individual. Your goal is to create checks and balances, and only having one person on your team doesn't allow for that. You don't want the same person doing payroll and accounts payable and reconciling your bank statements. By outsourcing your bookkeeping, you get a team of specialists who check the work to ensure that you are receiving accurate information and appropriate recommendations.
You need scalability.
When the economy is strong and business is good, you may think you have the funds to hire an in-house team, but what happens when the leads stop coming in or the economy drops off? Now you must face the challenging task of having to let people go. Outsourcing your bookkeeping provides you with the ability to scale up or scale down your team based on your needs. Smart business owners are using outsourcing to build flexibility and scalability into their businesses and to gain top talent in the market. Hiring a top-notch team through an outsourced bookkeeping firm will allow you access to quality employees without having to pay their massive salaries.
Besides scalability, outsourcing your bookkeeping allows you to focus on your business's core competencies, which is something needed to help your business grow from $1 million to $20 million.
The bottom line is that outsourcing your bookkeeping can save you money by cutting costs of wages and direct overhead for full-time or part-time employees. You also save on lost productivity costs that come along with hiring employees. In addition, with an outsourced bookkeeping firm, you only pay for what you need. You retain the professional resources required for your business and work towards more profitable outcomes.