In business as in life, there are tasks you enjoy doing and others that are pure drudgery. It’s safe to say that for most entrepreneurs, bookkeeping falls into the pure drudgery category.
The good news is, you don’t have to do it.
Wait. Let us rephrase that, because what we really mean to say is that while bookkeeping is required in order to properly run a business, YOU personally don’t have to do it. Instead, you can use an outsourced bookkeeping service to do it for you. Keep reading to learn more about the benefits of outsourced bookkeeping.
Why Outsource Your Bookkeeping?
You have three options when it comes to managing your bookkeeping. You can either:
- Do it yourself
- Hire an in-house bookkeeper
- Use an outsourced bookkeeping service
We’ll delve deeper into each option before explaining why outsourced bookkeeping is ultimately the best choice.
Do It Yourself
As an entrepreneur, it’s natural to want to do everything yourself, from bookkeeping to marketing to customer service. But at some point, you’ll realize that just isn’t feasible. There simply aren’t enough hours in the day to do it all on your own. It is then that you’ll need to decide which tasks to take on yourself and which to delegate to others.
One factor you should consider when deciding which tasks to take on yourself is whether or not you enjoy doing them. If you don’t enjoy the work at hand, you’re far more likely to put it off. Most business owners do not enjoy doing bookkeeping, and thus end up falling months behind on it. Hence, we usually get a ton of catchup projects just before tax season.
But even if you’re one of those rare souls who genuinely enjoys bookkeeping, you should also consider whether you have the time, resources, and skills to do it properly. In order to manage your own books, you’ll need to dedicate at least a couple hours a month to doing it, you’ll also need accounting software (like QuickBooks or Xero), and you’ll need to know how to do it. If you don’t know how to do it, you can always learn, but that will require hours upon hours of study and practice. For those reasons, most business owners chose not to do their own bookkeeping, which brings us to option 2:
Hire An In-House Bookkeeper
The main issue with hiring an in-house bookkeeper is that it’s expensive. Consider, for example, that the average bookkeeper salary as of October 28,2020 is $43,965. And that’s just payroll. Remember: there are additional employee costs, like benefits, training, insurance, recruiting, and facility or operating expenses.
Now compare that to the cost of an outsourced bookkeeping service like ours, in which we have plans starting at $199/mo. Multiply that by 12 and you get a total cost of $2,388 per year. That’s a mere fraction of what you would spend on an in-house bookkeeper!
But of course, cost is only one part of the equation. In the next point, we’ll go over some other reasons why more and more small businesses are going with option number 3:
Use An Outsourced Bookkeeping Service
One unique advantage of using an outsourced bookkeeping service is that you get access to a whole team of professionals, as opposed to just one person like you would with an in-house employee. If someone calls out sick, for example, there will always be another person to pick up the slack. Whereas if you have an in-house bookkeeper, you’re solely relying on that one person.
Another advantage is that most outsourced bookkeeping firms offer other accounting services, like taxes, payroll, and consulting. An in-house bookkeeper, on the other hand, strictly handles the recording of financial transactions and does not have the proper education or training to do more advanced forms of accounting. At CapForge, we have Certified Public Accountants (CPAs) on staff in addition to bookkeepers to make sure all your bases are covered.
In the next section, we’ll go over some additional benefits of using an outsourced bookkeeping service.
Benefits of Outsourcing Bookkeeping Services
More Time to Provide Value to Your Clients
When you outsource your bookkeeping, it frees up time so you can focus on what matters most to you: your clients. Whether that means interacting with customers face-to-face or responding to emails and phone calls, we firmly believe that you should focus on your strengths. As business management consultant Peter Drucker once said, “Do what you do best and outsource the rest!”
Increased Efficiency and Focus
A professional can do your bookkeeping in a fraction of the time it would take you to do it on your own. That’s because they have the proper training, experience, and tools. Because of this, it is far more efficient both time and money wise to hire a professional. Plus, you’ll have peace of mind knowing it’s being done correctly and on time, so you can focus on other areas of your business.
Risk Management and Accuracy
Errors in bookkeeping can cost you in multiple ways, from IRS penalties to missed tax deductions to business loan rejections. Some of the most common bookkeeping mistakes are:
- Misclassifying expenses
- Forgetting to record a transaction or expense
- Accidentally recording transactions from a previous period
- Not backing up files
- Not using a secure system to protect files
- Incorrectly calculating revenue or expenses
The best way to mitigate this risk and ensure accuracy is to hire a trusted professional.
Access to a Highly Trained Bookkeeper
When you hire an in-house bookkeeper, you may or may not get a good one. And if you’re getting one for less than the average national salary of $43,965, chances are they don’t have a lot of experience.
But if you use an outsourced bookkeeping firm, you never need to worry about this as every bookkeeper is highly trained. Plus, there’s an internal review system wherein each set of books are double-checked by a senior bookkeeper before being sent out (at least at CapForge, anyway).
Benefit From Top Bookkeeping Systems
Professional bookkeepers use top-of-the-line accounting software to ensure accuracy, timeliness, and organization. While there are dozens of accounting software programs out there, we recommend using either QuickBooks (if you’re located in the U.S.) or Xero (if you’re located outside of the U.S.).
The problem is these systems are complex and take a while to get used to if you’re not familiar with them. They can also be expensive.
Fortunately, the price of this software is included in your monthly bookkeeping service cost, so you won’t need to worry about purchasing and learning a new system.
It Gets Done Regardless of Your Schedule
Have more sales than usual? Going to be gone the first week of the month? No problem. With outsourced accounting services, once everything is set up, your involvement is pretty minimal. Your financial documents will be delivered at the same time every month no matter if business is slow or fast.
Save Time & Minimize Paperwork
If the picture above gives you anxiety, welcome to the club.
Nobody likes piles of paperwork. Fortunately with virtual bookkeeping, everything is done electronically, so you can say goodbye to that shoebox full of receipts.
Better yet, because everything is stored on a cloud server, you can access your records from virtually any location—instantaneously. No more digging through filing cabinets.
What You Should Look for When Outsourcing
No two bookkeeping firms are alike, and finding the right fit for you can take a little research. Below are some qualities to look for.
How long has the firm been around? How many clients do they currently serve? What types of industries do they specialize in?
At CapForge, we’ve been in business for 20 years and have more than 800 clients. While we primarily specialize in e-commerce, we also serve all kinds of businesses including small law firms, doctors, dentists, yoga studios, and tech firms to name just a few. If you have a small business you need bookkeeping help with we’re happy to chat and see if we’re a fit for your situation.
Has the firm won any awards? What professional certifications, if any, do employees have? Has the company been featured in the media? Are they on social media, and how many followers do they have?
While we haven’t won any awards (yet!), we do have quite a few other credits to our name. CapForge CEO Matt Remuzzi, for example, is a QuickBooks certified ProAdvisor, a title awarded to individual accountants who have demonstrated their ability to drive small business success through the use of strategic insights. Matt’s also been featured in numerous interviews, including with Forbes, Quiet Light Brokerage, and the Snyder Showdown podcast. He has a BA, an MBA, and has authored two books: one on Amazon Seller Bookkeeping and one on the Top 10 Most Common QuickBooks Bookkeeping Mistakes.
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As previously mentioned, we have Certified Public Accountants (CPAs) on staff to assist with more advanced services like taxes, payroll, and consulting.
If you want insight into a company’s reputation, look at their reviews. What are previous clients saying? Are they happy with the service they received?
Many businesses will post reviews on their website, and that’s great! But keep in mind that they probably only post glowing reviews, so make sure to check other platforms like Yelp, Google, and Facebook where they can’t filter out negative reviews.
What is their pricing structure? Do they bill on an hourly basis? Does price fluctuate month-to-month? What are their contract terms? Do they have any cancellation fees?
One of the unique things about CapForge is that we offer flat-rate, month-to-month bookkeeping with no contracts or hidden fees. You can cancel at any time without paying a penalty. Plus, we have a money-back guarantee in which we promise to refund your last payment in full if you are ever dissatisfied. That’s how confident we are that you’ll love our service.
We truly believe that outsourced accounting is the way of the future, and now that you’re familiar with all the advantages of outsourcing, we hope you’ll make the switch. If you have any questions or would like to schedule a free consultation, feel free to give us a call at (858) 633-3573 or send us an email at email@example.com.