Running a business is not an easy task. There are a lot of tasks and management work that need to be done. Without proper organization skills, your business could fail for simply missing out on important details about your finances. Luckily, you can outsource bookkeeping services to help you make business decisions that drive success.
What Is Bookkeeping?
Bookkeeping is an accounting function that allows you to have an organized presentation and analysis of your financial information. It allows investors, managers, and regulators to financially assess your business.
It also allows you to file your taxes and payroll on time and take advantage of tax benefits when you file returns.
Bookkeeping provides a speedy disposition of financial statements and recording of transactions so you can have more time managing your business than worrying about financial errors.
What Are Bookkeeping Services?
Outsourcing bookkeeping services help you comply with accounting and tax rules.
Some bookkeeping services also offer analysis and research services on top of keeping your records at bay. Convenient, isn’t it?
Outsourced bookkeepers also ensure that your company is presented with information that is relevant to your current status. They ensure that information is complete and accurate.
A bookkeeper also keeps records of every transaction and records the payroll of employees. Imagine doing all these tasks and running a business? Good thing outsourcing is the way to go!
The Basics Of Bookkeeping
The reason why you need a bookkeeper is either because you lack the time or knowledge to do it yourself. Basically, a bookkeeper keeps tabs on what comes in and what goes out for you to properly assess the level of business activity.
First, the bookkeeper aligns assets, liabilities, equity, revenue, and the expenses that your business incurs. Some of these are evidenced by receipts while others are recorded in an inventory.
Assets are categorized as your resources in achieving your business goals. This includes the cash on hand to spend on other items.
Next are liabilities that you incur after credits and your other payables. These include payroll liabilities and other credits you acquired to purchase your assets.
Another entry is called equity. It is the ownership interest which is increased by your revenue and the capital that goes into your business. After the assets and liabilities are recorded, the equity would be adjusted by the bookkeeper accordingly.
Revenue is the amount you earn from providing a product or service. It indicates the sales number for a particular period.
On the other hand, expenses are the costs incurred in attaining your revenue. A few examples are insurance, rent, and supplies expense.
For big businesses, these transactions come in volumes. Hence, outsourcing bookkeeping services allow you to hire experts who know accounting.
1. Eliminating Bias in Recording Transactions
The best thing about outsourcing these services is diminishing an internal influence on your accounts. When your accountant has a personal relationship with your managers, you expose them to the temptation of cooking your books.
You may not notice it but accountants can adjust their entries, so managers earn more than they bargained for. Yikes!
With the help of a third-party service, the personal influence of managers can be diminished. Truthfulness is ascertained with outsourcing.
2. You Never Lose With Experience
Outsourcing bookkeeping services expose your business to more experienced experts who know how to properly organize your financial transactions. Keeping tabs on your finances is among the things that make successful businesses prosper in the long-run.
When you hire a third-party bookkeeper, you need not worry about competence in dealing with your money. In outsourcing bookkeeping services, you get to rely on people who have QuickBooks certifications, professional credentials and are knowledgeable about the latest accounting software.
Having ample experience in the field of accounting is essential in keeping your business in check. Without these types of qualifications, you may incur losses that could have been prevented by experts. Professional advice is crucial in dealing with finances and bookkeepers ensure this type of credibility.
3. Consistency is Key
One of the benefits of outsourcing bookkeeping services is never having to worry about deadlines. Instead of putting all your time and effort adjusting and reporting your financial transactions, the third-party bookkeeper does it for you.
You would not need to update everything on your own. Outsourcing bookkeeping services allows you access to consistent, fast, and reliable delivery of your statements.
You even have the option to choose when and how your reports are structured. If you run an international business concerned with tons of financial information, you can opt for a quarterly report.
If you’re a small business owner who has limited funds and minimal business transactions, you may ask the bookkeeper to furnish records by week. It totally depends on your preference. The best part is – you don’t have to go over your financial status alone!
4. Convenience Is Just A Click Away
Handing down sensitive details about your business comes with a risk. However, online bookkeeping services are endowed with guarantees that secures your privacy. There are even laws that make bookkeepers accountable if they share your financial information with others.
With only a click away, you can hire an entire bookkeeping staff whose members are licensed, knowledgeable, and publicly acknowledged as trustworthy service providers in the field. These professionals are known to conduct themselves with high regard of ethical practices.
You may be living in the remotest parts of the world and still have access to bookkeeping services. These experts may not be available locally but are the keys to optimizing your financial stability.
Would you rather hide your information and not have the ability to organize them? It is better to put your trust in experts who have a remarkable track record of trust and confidence from its customers.
5. Saving On Overall Expenses
I know what you’re thinking. How can something I have to pay for help me save money?
Yes, outsourcing bookkeeping services require you to pay for help. However, when you think of it, bookkeepers alert you on money wastage.
They analyze your books, inform you when you’re spending too much on a project, or losing profit in another venture. Pinpointing where you could be wasting money helps you prevent larger losses in the long-run.
Outsourcing bookkeepers is like hiring your very own employees. Your best interests are considered and prioritized. Without this type of help, you may miss out on important details that can help you grow the business.
6. Outsourcing Means Coordination
Bookkeepers also initiate checks and balances on your finances. One of their functions is coordinating with members of the management from different departments to verify the authenticity of accounts.
In order for the bookkeeping services to be effective, the trueness of accounts is a top priority. Whenever there are discrepancies in the recording of transactions, the bookkeeper can help resolve the issues.
7. Some Offer Financial Advising And Suggest Cost-Cutting Strategies
The consistency of outsourcing bookkeeping services allows managers to pinpoint the wrongs and rights of every financial venture. With proper skill, a professional bookkeeper can easily spot whether an investment is a flop or a win.
The bookkeeper records every expense in your company and ensures whether your accounts receivables and payables are making sense.
Some bookkeeping services also provide financial advising as a part of their service package. Apart from just recording, they point out inefficiencies in your entries and how you may create cost-efficient strategies to refrain from incurring unnecessary expenses.
That’s right. Who else will you trust with your money than those who are actually keeping tabs on them? Not only do you get financially organized, but you also acquire valuable knowledge on your finances.
8. Being Techie Gets You Places
The traditional method of accounting takes a long time to complete. Accountants are trained professionals who were taught how to use these technologies in order to give you precise records of your accounts.
The software, in itself, functions as an information system. Online businesses also benefit from bookkeeping services that update them on their sales cycle. Some software are even mobile-friendly which is an advantage for managers who are always on-the-go.
For those operating a business within a workplace and in small business teams, a competent accounting management system is necessary. These have pre installed rules and priorities in data entry. The software makes it easier for bookkeepers to align the accounts in a flash.
Small businesses also outsource bookkeeping services to accountants who use cloud-based software. These have automated functions that predetermine where an entry is supposed to be entered. Hiring bookkeeping services whose personnel are experts is a major advantage.
9. Ease Of Use For Financial Assessments
Hiring bookkeeping services also allows you to present a cohesive report of your finances to investors. It is difficult enough to convince these stakeholders in investing in your business. With the help of bookkeepers, they can easily see why your venture is worth every penny.
As mentioned above, bookkeepers keep tabs of financial statements. These include the balance sheets, income statements, and the cash flow of your business. These are the records that investors use as a basis in considering or continuing their contributions.
Small business owners can also benefit from bookkeepers especially in convincing their investors. The presentation of organized books of accounts is one way to inspire investors in continuing their contributions with an organized business.
Investors are also impressed when you present them with complete reports of your business transactions. Therefore, you need to know what makes a complete report. For example, a balance sheet must be balanced. The first entries show the assets while the liabilities and the equities are placed last.
Bookkeepers would align these assets according to their liquidity. These are arranged as so to determine whether the business has ample resources to allow the business to run smoothly.
On the other hand, the liabilities section show the amount the business owes. It showcases those that are due within 12 months, and those beyond.
Next in line is the equity section. It is referred to as the net worth of your business after considering the liabilities and assets.
On the other hand, the income statement shows the revenue yield of your business. It’s where investors look and know if you are making more gains than losses.
Another report shown by bookkeepers is the cash flow statement. This indicates the operating, financing, and investment transactions of your business. This particular report is what stakeholders look at when they want to know the gains and losses of the business.
With all these entries taken into account, outsourcing bookkeeping services allow you to make profitable decisions. It lets you foresee the effects if you invest in a particular venture and how it would affect your profitability or loss.
As a result, bookkeepers help you make smart decisions without feeling clueless about what you are actually looking at. When you’re familiar with these terms, it’s easier for you to coordinate with your bookkeeper and minimize your unnecessary spending.
10. Attune Accounting Services With Your Distinct Style
There are a lot of bookkeeping services available worldwide. Some are more focused on showing financial summaries yearly while others submit their reports every month.
Outsourcing bookkeeping services allow you to choose the type and manner your financial information is showcased. This way, you can properly treat your records according to your style.
If you prefer those that have acquired a professional license or accomplished a degree in accounting, bookkeeping services will attune your needs specifically to the type of people you want to work with.
This is particularly helpful for small business owners who are oblivious to record keeping. If you’re still starting out with your venture, hiring an expert with 30 years of experience is definitely a huge advantage for you.
As mentioned earlier, security can be an issue in outsourcing bookkeeping services. Therefore, it would be advisable for you to hire those that perform their work in-house. This way, they easily coordinate with your managers and formulate precise records.
The Bottom Line
If you’re just starting out, the perfect way for you to flourish in the long-run is to outsource bookkeeping services. This way, you can use your time to promote growth in your company and leave the financial recordings to the experts.
Here at LYFE Accounting, we provide you with concise, unbiased, and organized financial statements for you to have a better grasp at what’s to come. We also prepare these records in a consistent fashion so your investors will have an update of your financial status swiftly.
Most importantly, our bookkeeping services also help you make smart decisions. With our help, it would be easier for you to dodge your losses and boost your profits in no time.