Why Outsourcing Your Bookkeeping Will Save You Money
As a business owner, you likely question if outsourced bookkeeping services will really benefit your business or save you money. However, what you may not consider is the cost related to not having this support.
When your business is still new, expense and income streams may still be somewhat small. Because of this, you may be able to handle your bookkeeping in-house, on your own.
However, as you grow, having bookkeeping support can be invaluable. This is true for small and medium businesses and essential for those in the creative field. When it comes to bookkeeping for creatives and business owners, knowing the benefits and cost savings it offers can help you see why this is such a smart investment. Keep reading to learn what those benefits are.
1. Make the Most of Your Working Hours
Rather than spending your time trying to handle non-revenue generating chores, such as bookkeeping, you can spend your time with core business activities and increasing your earnings. This includes things like:
Engaging with your clients (prospective, present, and past)
Creating and implementing a new marketing strategy
Improving your services and products
If you have a large company with plenty of incoming revenue, hiring a full-time bookkeeper is possible. However, for creatives and small businesses, this usually isn’t a feasible option. With an outsourced bookkeeper, though, you get the benefits of an in-house bookkeeper for a much more affordable rate.
2. Increased Productivity
When your startup or business is thriving, you will have a versatile team that can take on many different roles. It isn’t uncommon for many team members to take on tasks they aren’t as familiar with and ones that are beyond their job descriptions. After all, this is for the good of your business.
For managers and owners, though, increasing employee responsibilities is a balancing act. When you add more tasks to someone’s already loaded schedule, it may distract them from handling the work you hired them for. This can make them feel overworked and cause poor engagement and fatigue.
With an outsourced bookkeeper, you can have your employees do the tasks they were hired for, which will lead to more productivity and more revenue. In the end, this is also going to save you money since your team is handling core business functions.
3. Tax Benefits
When you use the services of an outsourced bookkeeping company, it helps ensure your business’s monthly financial data is handled for year-end reporting needs. Your year-end tax accountant can use the information to help ensure that your return is accurate and that your business gets all the tax benefits it is entitled to.
If your accountant has questions, then the outsourced bookkeeper you have hired can answer them and make sure the accountant has what they need.
When you work with a proven bookkeeping service, it helps provide peace of mind that:
All bookkeeping records are up to date
Your records are complete and accurate
Statements allow your business to take advantage of all tax credits and deductions
With the help of an outsourced bookkeeping service, you can save money thanks to tax savings and a reduction in any unneeded expenses and fees related to human capital.
4. Position Your Business for Continued Progress
When you discuss financial statements, the discussion isn’t complete until you acknowledge the cost related to missing out on new business opportunities. If you don’t access correct and current accounting information, your business will never fully understand its financial position.
Along with the issue of harmful business decisions, not having proper financial knowledge can leave your company unprepared to take advantage of things like growth investments, partnerships, or lucrative purchases that may help increase your business’s profitability. With help from outside accounting services early in the life of your business, you receive an invaluable service and something that will help your business be more profitable over time.
5. Manage Receivables and Payables Effectively
There are a few ways that using outsourced bookkeeping services to manage accounts receivables and accounts payable can help your business to save money.
For example, if you don’t pay your suppliers or bills on time, it can cause issues like:
Damaged vendor relations
Service fees
Interest charges
Suppose you damage relationships with your suppliers or vendors. In that case, it may cost your business even more money because they may decide to limit your order volumes or to change your account to a cash-only option. If you have your services or supplies curtailed, it means you may not be able to meet your client’s needs effectively. In the end, this could result in lost sales, which is going to lead to losses.
Also, if you can’t collect from your customers in a timely manner, it may result in your business not having adequate cash to support your operations. This will result in you missing out on the bank interest that the collected payments from clients would generate and result in you having to rely on credit to cover business expenses.
If you don’t have sufficient cash flow coming in that is generated by an organized receivables process, your business may run the risk of more debt and paying your bills late, which means this cycle will only continue.
With the help of an outsourced bookkeeping service, you can feel confident that your accounts payables and accounts receivables will be properly managed and that no issues will arise.
This will also provide you with peace of mind that your business has a healthy and predictable cash flow.
Finding the Right Outsourced Bookkeeping Service Matters
When you are searching for a quality outsourced bookkeeping service, you need to find one that is familiar with your financial needs and situation and your business. By doing this, you can feel confident they can provide the high level of services you need.
As you can see from the information here, an outsourced bookkeeping service will help ensure your business is successful and ensure you are on sound financial footing.