Bookkeeping is similar to making a dinner reservation for your wife’s birthday. It seems like a simple enough thing to do but a simple mistake in choosing the place or the date of the reservation can spell havoc. You might think that managing bookkeeping is a simple enough task but one minor mistake in the accounts can lead to serious damages for your business, both financially and in terms of market reputation. Therefore, a more efficient and trustworthy choice would be to let the accounting experts take care of the bookkeeping instead of making the wrong accounts, like wrong restaurant reservation. Here are only some of the many advantages that you will gain by opting to outsource your bookkeeping needs.
All the Tech Stuff!
If you are a small business, chances are that investing in state of the art software for bookkeeping is not on your priority list. But what if we were to tell you that you can still have access to the best technology out there without needing to spend a single penny on that? By hiring outsourcing services you can firms specializing in bookkeeping and possessing the latest technology bringing your accounts at par with the bigger business and making you more competitive and secure in terms of legal compliance as well.
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Time is Money is Time!
One of the biggest advantages of access to better technology and industry experts is that there are no time lags in the preparation of your books. On the one hand this means that you have all your account information on your finger tips as and when you need, and on the other it means that your statements are always filed on time and there is no chance of fines for delay or losing out on the advantages of being the early bird in filing those documents as well.
Better job satisfaction for your employees!
When you divert some resource on your payroll to handle extra jobs like bookkeeping, you are bound to have one of the two impacts: either their performance will be affected in their primary job, or they will feel more burdened and hence less satisfied in their jobs. Either way there will be a higher chance of employee turnover. If your employees are also trained on the job, then you can calculate all the additional costs you will be incurring, while attempting to save on hiring a specific resource for bookkeeping. The good thing is that you can indeed hire a separate resource and that too only at a fraction of the cost by hiring outsourcing services.
Scalability is the scale of success!
If you are a growing business, as we hope that you are, chances are that the decisions you need to make about expansion and contraction will be the key ones determining your profitability and efficiency in the long-run. If you decide to keep bookkeeping in-house, then you will have limited room to expand or contract, because either your current resource will be unable to handle the growing workload, or your new resource will keep costing you salaries even when they are not needed. However, if you choose to outsource bookkeeping, you can have scalability and access to experts as and when needed, saving you both time and money.
Tax and Audit Ready Reports
You must already know the painful and tedious process that is required to make your financial statements as per the legal requirements. While it goes without saying that an expert will be taking care of the things that can lead to legal consequences, the added advantage of outsourcing bookkeeping is that you have tax ready reports all year round, and not once after the external audit. This means that your expansion plans, like IPOs or new investments, do not have to wait until the end of the financial year to apply for approval. Being legally compliant also allows you more adaptability to any change in the compliance requirements.
Focus on Things That Matter
We started this piece by highlighting that fact that bookkeeping is rarely among the top priorities of a small business. What is the priority then? Revenue generation and profit maximization. This means that if you keep dabbling into auxiliary tasks like bookkeeping you will be diverting resources away from activities that lead to sales generation, revenue improvement, and profit maximization. The costs of the resources going into the management of such activities will be higher than the cost it would take to outsource such services and will also be higher in terms of opportunity cost of the chances lost to focus on revenues and profits.
Take a good look at the needs of your business and decide if the core activities of your company can afford to lose a few resources on bookkeeping. If the answer is no, then focus your time and energies on primary business and let experts with access to latest technology take care of such secondary business operations.