In recent years, there’s been a noticeable shift among small businesses towards embracing outsourced bookkeeping.
In 2019, around 37% of businesses had already outsourced their accounting functions, and an additional 52% of small businesses were contemplating outsourcing their accounting operations in the foreseeable future.
The trend towards outsourcing accounting has only seen an upward trajectory since.
This trend is largely driven by the need for efficiency, accuracy, and strategic financial management—areas where professional bookkeeping services excel.
Why are so many companies outsourcing bookkeeping services?
Well, imagine trying to bake a gourmet cake with only a vague idea of the recipe and some of the ingredients missing. You might end up with something edible, but it’s not going to win any awards.
Similarly, managing your business’s books without the right expertise is like baking without a recipe. Sure, you can mix numbers like flour and eggs, hoping for the best, but wouldn’t it be better to have a master baker—or in this case, a professional bookkeeper—ensuring everything turns out just right?
This is why many savvy business owners are turning to outsourced bookkeeping, trading in their metaphorical aprons for a professional chef to handle the financial baking.
Outsourced bookkeeping not only offers a cost-effective solution to managing financial records but also provides businesses with access to expertise that might not be available in-house.
How Does Outsourced Bookkeeping Work?
Outsourced bookkeeping services involve delegating the financial record-keeping tasks of a business to an external firm or professional. This approach allows businesses to focus on core activities while ensuring their financial operations are handled by experts.
The concept is straightforward: instead of managing bookkeeping internally, small businesses can tap into the specialized skills and technologies offered by external providers, gaining insights and reliability that can propel their financial management to new heights.
Here are the top 5 reasons that make outsourcing your bookkeeping as appealing as swapping out your burnt cookies for gourmet pastries, bringing a world of flavor (and financial clarity) to your business plate.
1. Cost Efficiency
Navigating the financial landscape of your business is all about making strategic choices that lead to growth, not unnecessary expenses. Opting for outsourced bookkeeping is one such strategic choice, offering a pathway to financial efficiency without the overhead associated with an in-house team.
A Leaner Approach to Managing Your Books
The reality is, that the costs associated with employing a full-time bookkeeper—think salaries, benefits, and workspace—can quickly add up. By choosing outsourced bookkeeping, you’re essentially opting for a leaner approach, where every dollar saved is a dollar that can be reinvested into areas of your business that directly contribute to its growth.
Imagine, for a moment, you own a small design firm. The budget you might allocate for an in-house bookkeeper could instead be redirected towards enhancing your design software or expanding your portfolio. This strategic reallocation of resources is about prioritizing spending that propels your business forward, ensuring that operational costs don’t overshadow growth opportunities.
Outsourced bookkeeping services offer the flexibility to scale with your business needs. During peak seasons, you have the support you need, and in slower periods, you’re not burdened with the fixed cost of a salaried employee. It’s this kind of operational agility that can make a significant difference in managing your business’s finances effectively.
2. Focus on Core Business Functions
As a business owner, outsourcing your bookkeeping doesn’t just lighten your financial management load; it fundamentally transforms how you allocate your most valuable asset—time.
The shift away from in-house bookkeeping to a trusted outsourced partner can be likened to unlocking a new level of operational freedom. Suddenly, hours previously spent poring over ledgers and reconciliations are redirected toward areas that drive business growth, such as product development, customer service, and market expansion.
Beyond Saving Money: Opening New Opportunities
A diligent bookkeeping service does more than save you money—it can be a conduit for uncovering opportunities. For example, a detailed analysis of your expenditures might reveal substantial spends on underperforming marketing channels.
Take, for instance, a boutique marketing firm we worked with at MISSION. Initially bogged down by the intricacies of bookkeeping, the firm’s leadership found it challenging to focus on their primary mission—delivering stellar marketing solutions. After partnering with us, not only were they relieved of the bookkeeping burden, but through our detailed financial analysis, we identified significant savings in operational costs.
These savings were then redirected into developing a proprietary analytics tool, setting the firm apart in a competitive market and opening new revenue streams. By entrusting your financial management to an outsourced accounting service, you’re not just ensuring accuracy and compliance; you’re enabling a strategic pivot towards what you do best—running and growing your business.
3. Expertise and Accuracy
This is a big one that our clients often tend to overlook. Accuracy isn’t just important; it’s everything.
Missteps in bookkeeping can lead to a cascade of errors affecting everything from your tax filings to your strategic planning. This is where the value of partnering with an accounting firm becomes unmistakable.
The Power of Professional Expertise
When you opt for outsourced bookkeeping, you’re not just hiring an individual; you’re gaining access to a team of professionals who bring a wealth of knowledge and experience. These experts are not only adept at navigating the intricacies of financial records but also stay abreast of the latest regulations and best practices.
Professional accountants and bookkeepers bring a meticulous eye to your finances, spotting opportunities for efficiency that might otherwise go unnoticed. They can identify trends in your financial data that can inform smarter business decisions, turning your financial records into a strategic asset.
For example, a small business focused on manufacturing was facing challenges with inventory management and cost of goods sold (COGS) calculations and reached out to MISSION Accounting for help.
Initially, this small business was struggling to keep track of inventory levels accurately and to determine the true cost of their products. This lack of precision was affecting their pricing strategies and, by extension, their bottom line.
Our first step was to implement a more sophisticated financial tracking system tailored to the unique needs of manufacturing. This system was designed not just to track inventory more effectively but also to provide a clearer picture of the COGS. We introduced methodologies that allowed for real-time inventory updates and more precise COGS calculations.
These changes enabled the business to adjust its pricing strategies in a way that reflected the true cost of production, enhancing profitability.
4. Enhanced Financial Statements and Reporting
In today’s data-driven business environment, the ability to quickly and accurately analyze financial information is not just an advantage—it’s a necessity.
Advanced reporting transforms raw data into actionable insights.
This involves not just tracking the numbers in your financial statements, but understanding what they signify for your business. With enhanced reporting, you can identify trends, pinpoint inefficiencies, and recognize opportunities for growth.
For a specialized e-commerce retailer, MISSION Accounting played a crucial role in redefining its financial strategy through targeted financial reporting. By implementing a detailed profit margin analysis report, we were able to dissect the profitability of each product line.
This report unveiled that certain high-volume items, previously believed to be profit leaders, were actually yielding minimal returns due to hidden costs and competitive pricing pressures.
This strategic adjustment provided by MISSION Accounting not only improved the retailer’s bottom line but also streamlined their product offerings, making them more competitive and focused in a crowded market space.
5. Maximizing Your QuickBooks Setup
When it comes to utilizing accounting software, especially a powerhouse like QuickBooks Enterprise, there’s a common oversight many businesses make: not setting it up correctly. This point is something we at MISSION Accounting emphasize repeatedly, and for a good reason—it’s crucial.
It’s easy to overlook a monthly software subscription fee on your bank statement as a necessary business expenditure. However, if you’re not fully utilizing the software, that expenditure isn’t just necessary; it’s wasteful. It’s akin to paying for a gym membership and never stepping foot inside. You wouldn’t do that, right? Or at least, you wouldn’t admit to it.
At MISSION Accounting, we specialize in turning QuickBooks from a mere expense into a powerhouse of efficiency and insight for your business. We’ve transformed how companies engage with QuickBooks, ensuring they’re not just using it, but leveraging it to its maximum potential for growth and decision-making. QuickBooks themselves even outlines the transformative benefits of bookkeeping here.
Accounting software options like QuickBooks should be a cornerstone of your business’s success, not just another line item on your expense sheet.
Does Outsourcing Your Books Make Sense for Your Business?
The reality is that you might be an expert in e-commerce, design, or any other field, but it’s rare for a successful business owner to be an expert in everything, including the nuanced realms of bookkeeping and accounting. Acknowledging this gap is not a concession of defeat; it’s a strategic decision to focus on your strengths and delegate other tasks to those with specialized skills.
Deciding whether to outsource comes down to a few key considerations:
- Time Management: If managing your books is taking away from core business activities, outsourcing can free up your time to focus on what you do best.
- Cost Efficiency: Often, the cost of outsourcing is less than hiring an in-house team when you factor in salaries, benefits, and training.
- Expertise and Accuracy: Professional bookkeepers bring a level of precision and expertise that can help avoid costly financial errors.
- Strategic Decision Making: With enhanced reporting, you gain access to detailed financial analyses that can inform strategic business decisions, from budget adjustments to identifying profitable service lines.
- Accounting Software Management: An outsourced bookkeeping service ensures your QuickBooks is customized to your business’s specific needs, avoiding common pitfalls that can lead to financial discrepancies.
Let MISSION Accounting Handle Your Bookkeeping
If you recognize the value in focusing on your business’s core competencies and are looking for a trusted partner to handle your bookkeeping needs, MISSION Accounting is here to help. Our team of experts provides personalized bookkeeping services tailored to your unique business needs. We understand the intricacies of various industries and work with you to ensure your financial management supports your business goals.
At MISSION Accounting, we believe in empowering business owners to make informed decisions by providing clear, accurate financial insights. By outsourcing your bookkeeping to us, you’re not just hiring a service; you’re gaining a partner dedicated to your success.
Don’t let bookkeeping tasks distract you from growing your business. Reach out to MISSION Accounting today and take the first step towards streamlined financial management and peace of mind. Let’s work together to build a financial foundation that supports your business’s growth and success.
