Bookkeeping is an important part of your business- ensuring that you know how much money is going in and out. You may choose to do it yourself, get someone trusted in to do it, an in-house person dedicated to it or outsource it. In this article, we are going to look at the pros and cons of outsourcing your bookkeeping.
Factors to consider
- Size of business- If you have more than 50 employees then it is recommended you have an in-house person dedicated to your bookkeeping. However, with a smaller business outsourcing it can reduce costs with this.
- Type of business- If you are a freelance writer or run a business on your own then you may not necessarily need someone else to work on the bookkeeping.
- Invoices and purchase orders- If you handle a lot of invoices and purchase orders then having someone on hand to handle it is important in order to cope with demand.
- Time- How often do you spend working on this? If you are doing it yourself and you don’t have another employee working on this then this could impact your business.
- Cost- One problem with having an inhouse team is that it may require specialised software and equipment. Using an outsourced bookkeeper means you do not need to provide them with this because they already have it, cutting costs.
- Growth- An issue with an inhouse bookkeeper is that it may be hard to keep up if your business grows. This could result in having to bring in more employees, thus having to train them, show the new system and so forth. With an outsourced bookkeeper, they are more likely to be able to adapt to your needs.
- Accuracy- While you may want to save money by doing it yourself the danger is that you make mistakes. When it comes to tax returns or cashflow this could potentially be very expensive. That is why it is important to get the right person on board to work on this.
The right decision for you
As you can see there are issues on all sides and you need to weigh up what works best for you. For a lot of start-ups and small businesses the major decision is often based on money.
However, this is potentially a short-term view- ultimately you want to prepare for long term success as much as the initial issues that you face. There are also things that could become problems later on- for example if you bring in a friend or a family member there is always the danger you could fall out with them.
There are a number of benefits with outsourcing bookkeeping as ultimately it allows for the most flexibility, so on balance it may well be the best option in both the short and long term to use someone who can be flexible and adapt to how your business grows.
For more help on developing your business and getting technical support contact Digi Toolbox today.