Outsourced bookkeeping services are a type of business service that provides professional financial record-keeping and accounting services to businesses. The services may include payroll, accounts payable and receivable, financial reporting, budgeting and forecasting, and other related services. By outsourcing bookkeeping services, businesses can reduce their overhead costs and focus more attention on their core operations.
A reliable bookkeeping system is essential for every business or organization. More than just keeping track of daily transactions is bookkeeping. Budgeting, payroll, financial information, and tax preparation are also included.
It’s vital to keep all this data up to date in the long run. But it can be a time- and energy consuming process to do so. Although many business owners employ full-time internal bookkeepers, this isn’t the most economical option.
Around $700 billion was spent by corporations on outsourcing in total in 2022. When segmented, it is predicted that IT outsourcing investment will increase by 22% from 2019 levels to $519 billion in 2023.
Types Of Outsourced bookkeeping Services
1. Full-Service Bookkeeping: Full-service bookkeeping covers all the bases from data entry to financial statement preparation and more. This option is great for businesses that need a comprehensive solution for their bookkeeping requirements.
2. Payroll Services: Outsourcing payroll services allows businesses to stay compliant with state and federal payroll regulations. This type of bookkeeping also helps business owners save time by having someone else do all the calculations and paperwork associated with payroll.
3. Accounts Receivable: This type of bookkeeping is responsible for managing all of the accounts receivable transactions and recording them in the general ledger. This includes tracking payments from customers, preparing invoices and collecting payments.
4. Accounts Payable: The accounts payable bookkeeper is responsible for tracking all of the accounts payable transactions and recording them in the general ledger. This includes tracking payments to suppliers, managing vendor relationships and preparing purchase orders.
5. Bank Reconciliation: Bank reconciliation is the process of comparing the bank statement with the company’s accounting records. This is an important part of the bookkeeping process as it helps to ensure that all of the transactions are accurately recorded.
6. Tax Return Preparation: Tax return preparation is an important part of bookkeeping. It involves preparing financial statements and tracking income and expenses to ensure they are accurately reported to the IRS.
Companies may outsource this task to an external bookkeeper or accountant who is familiar with the process and understands the filing requirements.
8 Benefits of Outsourced Bookkeeping Services
Spending on business process outsourcing is anticipated to reach $212 billion in 2023, up 19% from 2019.
1. Cost Savings: Outsourcing bookkeeping services can help businesses save significantly on the cost of hiring and training bookkeepers.
2. Improved Accuracy: An experienced and certified bookkeeping team can help ensure accuracy and consistency in your organization’s financial records.
3. Access to Expertise: Outsourcing bookkeeping services can give you access to experienced professionals with specialized knowledge and skills.
4. Increased Efficiency: Professional bookkeepers can help streamline and automate processes and procedures to increase efficiency.
5. Flexibility: Outsourcing bookkeeping services can provide you with the flexibility to scale up or down as needed.
6. Scalability: Bookkeepers can quickly and easily scale up their services as needed, allowing you to meet the changing needs of your business.
7. Improved Security: When you outsource your bookkeeping services, you can be sure that your financial data is being handled securely and confidentially.
8. Time Savings: Outsourcing bookkeeping services can free up your time so that you can focus on other areas of your business.
6 Process of Outsourced Bookkeeping
Outsourcing bookkeeping involves hiring an external service provider to manage financial transactions and bookkeeping tasks. This can involve hiring a full-time accountant or using a temporary bookkeeping service.
1. Identify your needs: Before you begin your search for an outsourced bookkeeper, it’s important to understand what your business needs from them. Consider the scope of the project, the amount of time you have to dedicate to bookkeeping, and what type of expertise you need.
2. Research: Once you know what you need, you can start researching potential providers. Look for experienced providers who specialize in bookkeeping services and have a good reputation.
3. Develop a shortlist: After researching potential providers, create a shortlist of the most promising ones. Be sure to consider each provider’s rates, services offered, and customer reviews.
4. Request quotes: Reach out to the providers on your shortlist and request quotes. Ask questions to get more information about the services they offer, their prices, and any other details that will help you make an informed decision.
5. Choose a provider: Once you have all the information you need, it’s time to choose the best provider for your business. You can review the cost and services offered by each provider and decide which one best meets your needs.
6. Set up the system: The provider you choose will help you set up your bookkeeping system. This typically involves setting up the software, setting up accounts, and configuring your preferences.
Final Thought
Outsourcing bookkeeping can be an effective way to manage your finances and accounting needs. It can help you save time, money, and resources, while also allowing you to focus on more important aspects of running a business.
By outsourcing, you can gain access to experienced professionals who can provide valuable insights and expert advice. Additionally, outsourcing can reduce the risk of errors and fraud, as well as provide greater efficiency and accuracy in financial reporting.
