The Complete Guide To Outsourcing Bookkeeping
Introduction |
How Does It Work? |
What Is Outsourced Bookkeeping? |
What Software Do I Need? |
What Are The Benefits Of Outsourcing? |
Who Should I Go With? |
Other Benefits Include: |
Introduction
Outsourced bookkeeping is one of modern technology's greatest gifts to businesses. Used well, it can save you money, increase your efficiency, and minimise burnout within your team, freeing your internal resources up to focus the business on revenue generation and fully utilising the unique skillsets of your team without the administrative burden of bookkeeping.
By making the simple decision to outsource your bookkeeping, you can bolster your business, and increase growth. With more timely and accurate management information you can achieve a higher level of understanding and decision-making within your business and ensure that you get the best possible outcome for minimal outlay.
Read on to find out why - and how - you should decide to outsource your bookkeeping.
What Is Outsourced Bookkeeping?
Outsourcing is a process by which you ask a third party or external body to manage your bookkeeping or accounts.
In the past, finding and changing to an outsourced book-keeping provider would have been an arduous process involving market research, meetings, interviews and budget negotiations. The transition to online solutions and working together in the online world has never been easier with cloud software, file sharing, online meetings and screen sharing.
What Are The Benefits Of Outsourcing?
There are many types of businesses, of all sizes, who benefit from outsourcing their book-keeping. Startups often have a lot to think about. For new businesses, it is invaluable and very cost-effective to be able to focus on getting off the ground, whilst a trusted professional handles all financial matters.
For existing businesses, the cost of transition processing has significantly reduced with recent technological improvements. These include live feeds to business bank accounts which can be programmed to automate the processing of bank receipts and payments into selected accounting software. As well as that, invoice processing solutions can now extract data from invoices and automatically post those invoices into the accounts software.
The role of the bookkeeper has dramatically changed over the last few years as a result of the factors above. Modern businesses can now afford and will benefit from outsourcing to help set up systems and reporting. Professionals can offer support and guide them in business management and tax matters and achieve far more than simple data entry functions previously associated with bookkeeping solutions.
As with all outsourcing decisions, choosing professional help allows you to become more efficient and increase the flexibility of your business. Outsourcing also helps you to be more reactive to changes in your market without committing to the cost of a full-time employee or sacrificing a high level of frictionless customer service.
Other Benefits Include:
- Better use of your internal resources: The ability to keep figures up to date without investment from your employees is a valuable time-saver. This allows you to avoid stress, increase available time and energise your team which frees up valuable mental bandwidth, allows for better and faster decision-making and encourages a focus on promoting business activities.
- Improved systems: using skilled outsourcing specialists will lead to expertly designed systems and reports that give a more in-depth analysis of business performance, resulting in improved profitability and growth. With expert consultants, business systems can be integrated which often save significant time for other staff.
- Helps you take advantage of the cloud: keeping your accounts in the cloud allows information to be accessed and input securely from anywhere including mobile devices. Receipts and other information can be gathered, timesheets entered, or invoices raised on the go. Reports can be easily accessed from home, on client premises, and through data shared across multiple offices and key advisors, aiding collaboration and saving time.
- Paper-free systems and outsourcing to off-site professionals result in an uncluttered solution with easily accessible information, freeing office space, saving money on rent and reducing internal IT costs.
- Offers objective advice: A third party can more accurately provide guidance about your business without bias. They can also use their existing skills to help you guide and target your work. Furthermore, once they have familiarised themselves with your organisation, they become a valuable resource. Flexibility, continuity and backup: Outsourcing allows the financial resources to be scaled to meet the business size and complexity. There are no recruitment costs, and input from higher-level staff - and additional time at varying levels - can be added as the business requires, in affordable extra units. The cover is provided for holidays and sickness, so there is no need to drop everything to recruit should a book-keeper leave, so continuity is provided with no recruitment costs being incurred.
- Employment-related costs: apart from saved recruitment costs, there is no Employers NIC when paying a third-party outsourcing company, no holiday pay, Christmas party or entertaining, no training costs, and also no need to account for the increasing burden of Auto-enrolment Pension which would be required for an employee.
- Assistance with year-end accounts and tax planning: working with professionals to outsource book-keeping means that there is an approach and understanding to work through the year which considers a variety of wider advisory matters. This often results in better decisions and efficiency in book-keeping time, saving costly errors and the need for adjustments. Very often, a reduction in end-of-year professional fees is also achieved, as well as valuable savings on tax. The result is a reduction in end of year professional fees and - often - tax saving through better and earlier decisions being made.
- Reduction in risk of tax enquiry: working with professionals in outsourcing your bookkeeping means that there is a tiered structure of the staff with higher expertise working with you throughout the year and, therefore, greater assurance and skill relating to VAT and other taxation matters, which reduces the risk of HMRC enquiry, unnecessary fines, penalties and interest.
- Promotes trustworthiness: Choosing an employee from an established company increases accountability, guarantees quality, and allows you to avail of in-house checks and balances that will eliminate error and ensure full oversight – meaning that all work is done well and done right, with added security over any sensitive accounting matters.
- Cost-saving: because of the savings in automating data entry, lower rent, IT and recruitment costs, NIC savings, and reduced internal staff costs due to automated reporting, and overall better business performance, outsourcing bookkeeping is a highly cost-efficient process that has wide-ranging benefits included savings and added value.
How Does It Work?
The first step will involve looking at your current situation and determining where your processes are letting you down. This will include assessing areas of interest to your business, where the work fits into your overall strategy, and what materials you would like the service to take ownership of.
Pricing for your outsourced solution will vary from provider to provider and will depend upon the hours required to accomplish your goals. It can be tailored to the individual requirements and budget of your business. Normally, this will involve a simple review of your existing systems and processes to ensure the best value solution is chosen for you.
Documents and material can be shared through a safe online platform to ensure security, and the use of apps and mobile devices can be used to share data and information, which saves time and minimises the risk of GDPR breaches.
Who Should I Go With?
Every business is different, and each requires a different approach. Along with carrying out the previously mentioned due diligence, it is important to choose a company that is forward-thinking and flexible. We would always encourage you to choose companies that embrace digital innovation and positive technological changes.
It is worth remembering that one of the key risks of outsourcing is the ‘air-gap' that can exist between a client and accountant, making communication absolutely key. Eliminating these issues is something our team has specifically focused on and counteracting this inactivity issue is at the core of what we do.
Our services include our smart accounting app which allows an at-a glance view of your current financial situation at a high and low level, complementing our comprehensive outsourced services with secure data storage. This also includes comprehensive remote support delivered through Xero Online Accounts by fully accredited employees. We pride ourselves on providing a cost-effective service, alongside a willingness to go the extra mile for customers both UK-based and worldwide, and our start-up service
means that you can hit the ground running and not have to worry about your work.
If you want to learn more about outsourced bookkeeping or other services we can bring to your business, you can get in touch with us directly at www.davidhoward.co.uk and if you have any queries about our services, do not hesitate to get in touch.
