Should you Hire a Bookkeeper or Keep it In-House?
Bookkeepers typically do the following tasks:
- Enter financial transactions into computer software
- Put costs (debits) and income (credits) into the software, assigning each to the right account
- Produce regular balance sheets (costs vs. income), income statements (assets, liabilities and equity), and totals by account
- Check for accuracy in figures, entries and reports
- Reconcile any discrepancies they find in the records
Do you have someone on your staff with the ability and time to do all of the above properly and dependably? If you do, is their time best spent on these tasks, or do they have other talents more valuable to you elsewhere? Do you have someone to fall back on if that person becomes ill, goes on vacation or leaves the company abruptly?
These are the questions to ask when wondering “Why should I use an outsourced bookkeeping service?”
Bookkeeping, while essential, is a non-revenue-generating task. It is often more cost-efficient to hire an outside professional bookkeeping service than to keep the books yourself.
People who do bookkeeping for a number of clients are usually more experienced, knowledgeable and efficient than those who work in-house for one employer. The in-house bookkeeper at a small company is often called away from their primary tasks to assist with other things.
Bookkeeping services should charge a flat monthly fee (sadly, many do not) so you always know how much your bookkeeping is going to cost. Using a service, you don’t have to deal with all the headaches that go with employing someone: salary, benefits, training, retraining, unemployment and Medicare payments, etc.
Staying Up to Date
Professional bookkeeping services use the latest software to record transactions correctly It is their business to stay up to date on the most recent requirements and regulations to make sure you never inadvertently fall afoul of the law.
An inexperienced bookkeeper can make mistakes that lead to nasty surprises like tax audits. Losing track of a large receivable, or neglecting to pay an invoice, could adversely affect your credit rating.
An outside firm has a much greater motivation to make sure every transaction is recorded accurately and every report is delivered on time: their reputation depends on it!
The records bookkeepers work with include expenditures (money going out), receipts (money coming in), accounts payable (bills), accounts receivable (invoices) and profit and loss (a report of the organization’s financial health). Some business owners prefer that employees not have access to all that information.