By: Angie Roller
Staff Accountant, O'Leary-Guth Law Office, S.C.
In the story of Goldilocks and the Three Bears, Goldilocks sampled three bowls of porridge. One bowl was too hot, one was too cold but the third was just right. Similarly, business owners need to find that “just-right” balance for their bookkeeping.
One option for businesses is to hire a full-time in-house bookkeeper, but not all businesses need that much bookkeeping support. Relying on one person can also be problematic if your bookkeeper unexpectedly quits or becomes ill.
A second option for businesses is to hire a part-time bookkeeper, but it can be hard to find a qualified part-time employee who is available when you need them.
A third option that is “just right” for many businesses is to outsource bookkeeping to a firm like ours that provides skilled bookkeeping services when you need it and in the quantity of support that’s appropriate at that point in time.
The Role of a Bookkeeper
Bookkeepers track and organize a business’s revenue and expenses, and provide other accounting services, such as payables management, invoicing and receivables tracking, and coordinating payroll.
One of the most common complaints we hear from business owners is that managing their business’ books takes precious time away from actually running their business. Depending on the size of the company, bookkeeping can demand several hours to several days out of the week -- time that many business owners would rather spend growing their business. This is where outsourced bookkeeping shines. An offsite bookkeeper can take care of recording sales, paying bills, posting payments, entering payroll and providing financial statements while leaving the business owner free to focus on actually running and developing their business.
The relationship between the business owner and a good bookkeeper is completely customizable. For example, if the business owner doesn’t want to keep track of sales and expenses but still wants to be in charge of payroll, the bookkeeper can accommodate. As the business grows, the duties of the bookkeeper can be adjusted to fit the needs of the business.
Why Outsource Bookkeeping?
Many businesses choose to outsource bookkeeping duties for various reasons, including saving costs, streamlining workflow, and protecting against staff turnover (to name a few). Outsourced bookkeeping also frees up capital and office space, as the bookkeeping firm (rather than the client firm) is covering the costs of staff training, employment taxes, employee benefits, and computers/equipment. Outsourced bookkeeping can also provide a deep bench of support so there is backup to fill in as needed if someone is on vacation or ill.
Another major advantage of outsourced bookkeeping is a reduced risk of internal fraud within the company. While this risk will, unfortunately, always exist, outsourcing bookkeeping to an outside firm can minimize the risk dramatically by providing checks and balances, along with the perspective afforded by an objective consultant.
Succession Planning and Valuation Considerations
If you plan to eventually sell your company, potential buyers will want to first review your books in great detail. Keeping clean and organized books can maximize the sale value of your company and simplify the sales process.
Or, if you plan to keep your business in your family and pass it on to the next generation, outsourced bookkeeping can help simplify the transition. Even though you may change the ownership and management of the company, outsourced bookkeeping services can remain constant throughout the transition to provide stability and support.
Tax Preparation Made Simple
Finally, if your bookkeeping firm also prepares taxes, it will simplify the tax preparation process because your financial information has already been recorded, prepared and posted. This cuts down on time and expense an accountant would typically charge to review financial data prior to preparation of tax returns. To take it a step further, your bookkeeper will be able to determine what financial forms to send to whom – such as W-9s and 1099s that must be sent to any independent contractors you’ve worked with during the year.
If you have questions about O’Leary Guth Law Office’s bookkeeping and accounting services, please send me an email at firstname.lastname@example.org.