Most small businesses don’t need a full-time bookkeeper working a 40-hour week just to manage the books. Often, business owners make the mistake of trying to do it themselves, or delegating it to an all-purpose administrative assistant as an additional duty.
Neither works well. When an owner or partner tries to do it themselves, it takes valuable time away from the critical tasks of prospecting, selling, serving customers, improving services and products, training employees and growing the business.
When it’s delegated to an assistant as a part-time duty, bookkeeping often suffers, because most general administrative staffers, however well-meaning, are not bookkeeping professionals. They aren’t up on the technology, or the standard ‘best practices’ within the profession.
Here’s how to know when you should hire a bookkeeping service, rather than try to do it in house:
1) You want to control expenses
Full-time employees are expensive. If you don’t need a full-time bookkeeper, there’s no advantage to paying for one. You can use that money to hire someone for productive core business functions that cannot easily be outsourced.
By outsourcing, rather than using your own employees, you can accomplish the following:
- Reduce benefit and compliance expenses.
- Reduce taxes such as CPP and Employment Insurance.
- Eliminate the need to pay vacation pay while employees are unproductive.
- Reduce expenses on office space and supplies.
- Reduce the risk of employment discrimination or harassment lawsuits.
We find that even very small businesses can save thousands of dollars every year by outsourcing bookkeeping services rather than paying the costs of a full-time employee directly.
2) You want to protect your partner relations
Often, the bulk of the bookkeeping and accounting work in a closely-held business falls on one partner. We’ve seen many situations where an honest mistake in data entry by a partner causes a major row that threatens to disintegrate the partnership.
There have even been a few cases where one partner manipulates the books to benefit themselves at the expense of the business and the partners.
By outsourcing to a neutral third-party remote bookkeeping services provider, you can lower the risk of infighting among partners. You can also be confident that your records are not biased or tilted in favor of any individual partner.
3) You want an unbiased financial opinion
When you hire an employee in house, the temptation is very strong for the employee to tell you what you want to hear rather than what you need to hear. An outsourced bookkeeper who doesn’t work in the building will be less vulnerable to having his or her perspective skewed by office politics, confirmation bias or wishful thinking.
4) You want improved data security and privacy.
In-house bookkeepers sometimes “leak” sensitive information, such as salary and payroll information, to favored co-workers. This is a violation of the trust placed in them by their employers, but it happens anyway, because of human nature.
Offsite, third-party bookkeepers are unlikely to reveal confidential information to anyone outside of channels.
Outsourcing to a virtual accounting firm also involves upgrading data storage to the Cloud, where data is constantly backed up to multiple offsite locations, accessible via any Web-enabled device, and protected by state-of-the-art security and encryption.
This is a vast improvement over the usual methods employed by in-house bookkeepers, who frequently store information on local servers, backed up only occasionally and rarely off site, and which are vulnerable to floods, fires, employee theft, vandalism, or simple hard-drive crashes.
LedgersOnline provides affordable bookkeeping services for any business anywhere.