Bookkeeping is a vital part of any company regardless of its size.
Accurate and timely financial reports mean you can keep on top of your business and make informed decisions.
Cost is always a significant factor when looking at whether in-house or outsourced bookkeeping is right for you. But there are more critical issues such as quality, efficiency and fraud potential that you should also consider.
Bookkeeping: cost – quality – efficiency – fraud
When you first started out, you probably did all your financial records yourself. It gave you the chance to familiarise yourself with your business and its associated financial processes, plus it helped keep your costs down.
The problem is, your business is now growing, and bookkeeping is fast becoming an arduous task you struggle to find the time to do. You’re at a crossroads – do you outsource, or do you hire a new member of staff?
The cost of bookkeeping
Let’s face it; cost is a significant factor for every business. For many people, as soon as you mention outsourcing, they suck in air and shake their heads because they assume it will be expensive.
Is it though?
If you hire a member of staff to do your bookkeeping, you have to pay their annual wage, holiday pay, pension contribution and, potentially, sick pay. There’s also the small matter of the cost of ongoing training. Granted, they can multitask and take on other duties too, but what happens when those other duties start to take over their time and the bookkeeping gets put on the backburner?
When you outsource, you only pay for the services you need, when you need them. The bookkeeper assigned to you is an expert. She will be up to date with all the latest processes and technology.
The financial reports you receive dictate how you run your business. You will base your decisions on them, so it’s vital they are accurate.
Your internal bookkeeper is juggling multiple tasks. It could be all too easy for errors to slip through either due to time constraints, lack of knowledge, or human error. One slip-up could cost you dearly.
You could argue that outsourcing could also lead to errors; however, the company you choose to use wins its business through reputation. It will have stringent internal controls to make sure its procedures are accurate, timely and quality controlled. In addition to that, you also benefit from a professional team who can troubleshoot or provide guidance.
When you need financial information, you need it straight away, not a week next Thursday. Your multitasking in-house bookkeeper is pulling her hair out, trying to keep on top of everything. The problem is, the report you’re waiting for is buried under a pile of other work. She now has less than an hour to pull everything together for you. The chances are errors will slip through, and with no one else to check her work, they will impact on your decisions.
Plus, the processes she follows have been devised in a vacuum in-house. If they don’t conform to best practice, you could end up losing money or creating headaches further down the line.
Your external bookkeeper is dedicated to your business. She isn’t being pulled in different directions by other members of your team. Your work always takes priority, ensuring your reports are produced on time.
Of course, working for a business dedicated to bookkeeping, she will also have access to the latest technology to help her create meaningful and accurate reports.
Fraud is something you need to think about.
It’s a tough thing to hear, but in-house bookkeeping can lead to bad actors working fraudulently under your roof. When you have the same person paying the bills and reconciling your bank accounts, you run the risk of criminal activity.
But, bring in a separation of duties by using an outsourced bookkeeping service, and that potential is immediately eliminated.
Safety in outsourced bookkeeping services
It’s tempting to keep everything in-house but, as we’ve just seen, that’s not always the most efficient way.
Let’s face it; if you decided to extend your home, you’d get a reputable building firm to do the work for you. There are probably a few small jobs you will do yourself, but handing over the lion’s share to a professional gives you peace of mind. The same goes for your bookkeeping.
Timewise VA provides a cost-effective virtual bookkeeping service giving you the freedom to get on with growing your business.