Should I outsource my bookkeeping?

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    Life as a small business owner is a careful juggling act. Between marketing, sales, operations and keeping your customers happy, it’s easy to feel overwhelmed. One area that often gets neglected is bookkeeping.

    Deciding whether to outsource your bookkeeping (rather than hiring an in-house bookkeeper or doing it yourself) is a significant choice, but one which offers numerous benefits.

    The key benefit of outsourcing bookkeeping to an accounting team is accuracy. Professional bookkeeping can make compliance tasks easier, improve tax efficiency, and reduce costs. The human benefit is that it helps eliminate stress and frees up your time to run your business – or take precious time out.

    If you’ve decided that handling your own accounts is not the best use of your time, but are not sure whether to invest in outsourcing your bookkeeping, then you’re not alone. Many business owners wrestle with this decision. This guide will walk you through the pros and cons to help you decide if outsourcing bookkeeping is right for you.

    For friendly, personalised advice on bookkeeping for SMEs, please get in touch with Jameco Group.

    What is outsourced bookkeeping?

    Outsourcing bookkeeping refers to hiring an external party to manage financial tasks like record-keeping and reporting. Business owners usually outsource to a firm of dedicated bookkeepers, an online bookkeeping service or a firm of accountants.

    For a fixed fee (usually paid monthly), they will manage your business’s financial records, including tracking transactions, data entry, overseeing accounts payable/receivable and bank reconciliation. It’s important to understand exactly which bookkeeping tasks are included in your package, as services differ in quality and depth.

    Benefits of outsourced bookkeeping

    Many businesses devote time to bookkeeping work in the early days to save on costs, which is totally understandable. But as a business grows, overseeing every bookkeeping and accounting task can become time-consuming and stressful.

    Outsourcing bookkeeping can help alleviate the burden and has many benefits for both you and your business.

    Let’s take a look at a few:

    Save Time: Take a second to consider the number of hours per week you spend managing the books. Now imagine what you could do with those hours to improve your business or simply take a well-earned rest! Many small business owners decide to outsource bookkeeping on this point alone!

    Enable growth: Outsourcing bookkeeping services supports business growth by providing crucial insights into financial health. By understanding cash flow, expenses, and revenue trends, you can optimise business operations, seize opportunities, and plan for expansion with confidence.

    Expertise and value: By outsourcing bookkeeping, you gain access to a team of experienced bookkeepers and/or accountants at a fraction of the cost of hiring an in-house accounting department.

    Access to top accounting software: Seek an outsourced bookkeeping firm or accountant that uses the latest bookkeeping software. For example, Jameco Group uses Hubdoc, Xero and Syft to streamline financial processes and provide deeper insights into our clients’ financial health.

    Tax efficiency: A key advantage of outsourced bookkeeping is being better prepared for tax season. Professional bookkeepers ensure your financial records are meticulous and comprehensive, making tax preparation easier and highlighting potential tax savings.

    Compliance and risk management: Outsourcing makes compliance with tax regulations easier and reduces the risk of penalties. It also mitigates the risk of fraud and human error.

    Financial insight: If you choose an accountant to manage your bookkeeping, they have the expertise to provide financial reports and analysis, offering a clear picture of your company’s financial health. This can help you budget and forecast more accurately, manage cash flow and make better financial decisions.

    Drawbacks of outsourced bookkeeping

    Aside from the extra cost, small businesses often have several legitimate concerns about outsourcing bookkeeping. They are worried about handing over financial control, data confidentiality, hidden costs and the possibility of becoming dependent on external services.

    These concerns highlight the importance of choosing a reputable outsourcing partner who is equipped to handle your needs both now and in the future.

    Check out their Google Reviews, pick up the phone or send an email to ask them questions about their pricing policy, and check their professional accreditations and qualifications – all of which can help you make an informed decision.

    Jameco Group has a proven track record of reliability, stringent data security measures, transparent pricing policies, and professional accreditations. As an all-round, experienced team of accountants, you can rest assured your finances are in good hands.

    Is outsourced bookkeeping right for your business?

    Here are a few red flags that indicate it’s time to consider outsourced bookkeeping services:

    • You spend an excessive amount of time on bookkeeping work, often into the night.
    • Your records are regularly error-strewn, inconsistent or late.
    • You have missed HMRC deadlines in the past.
    • You realise you could be missing out on valuable tax relief.
    • You lose sleep over your looming personal and company tax return.
    • You struggle to maintain cash flow.

    Should I keep accounting and bookkeeping functions with the same company?

    Hiring the same company to manage your bookkeeping needs and other accounting services has many benefits. Aside from the obvious cost savings, it helps streamline your financial information, saves a lot of to-ing and fro-ing, and reduces the risk of miscommunication. You can rest assured that your financial data will be consistent and up-to-date, giving you better financial clarity.

    It’s also worth considering the benefits of an outsourced bookkeeping service from an accounting firm. A qualified accountant can provide a more holistic view of your business’s financial information and tax situation and offer strategic insights to help you save money and grow.

    Thinking of outsourcing accounting services? Get in touch with Jameco Group

    Whether you’re a small business owner looking to free up your evenings or a growing company in need of expert financial management, Jameco Group is ready to help.

    Our software stack makes bookkeeping easy. It allows you to snap pictures of receipts, raise invoices electronically, and – well, we’ll do the rest!

    Contact us today to discover how our outsourced accounting services can improve your life by saving valuable time while helping to fuel your company’s growth.

    How do I switch bookkeepers?

    If your current bookkeeper isn’t meeting your expectations, it might be time to switch.

    Here’s how to transition smoothly:

    1. Inform your current bookkeeper of your decision respectfully and clearly.
    2. Request a formal disengagement letter outlining completed work, key financial dates, and vital information on your business’s financials.
    3. Your new accounting/bookkeeping firm will contact your former bookkeeper for professional clearance, requesting the transfer of financial statements and documents.
    4. Grant your new bookkeeper the authority to manage your financial matters, including tax returns.

    Frequently asked questions about outsourcing your bookkeeping

    Does accounting software do bookkeeping tasks?

    Yes, software such as Xero is designed to perform a wide range of bookkeeping tasks. It automates double-entry bookkeeping, simplifying the recording and processing of business transactions.

    Beyond basic bookkeeping, the latest accounting software can also manage billing, payroll, accounts payable, tax filing, and generate financial reports. As a Xero expert, Jameco can help you get the most out of this essential tool. Check out why we only use Xero.

    Should I change bookkeepers often?

    Ideally, no. Consistency helps ensure accuracy and better financial advice. However, if your needs change, your business has outgrown your current bookkeeper, or you’re simply unhappy with the service, a switch might be necessary. Just make sure the transition is smooth to avoid disrupting your finances.

    James Wheeler, founder and managing directors of Jameco Group
    James Wheeler

    James has over 10 years of experience in accountancy and taxation. He has a real passion for business and truly believes SMEs are the heart of the UK economy. In 2017, he founded Jameco Group to provide first-class accountancy, taxation, and business advisory services to individuals and SMEs across the UK.

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