Pros of Outsourcing
- Cost-saving: Hiring a bookkeeper or accountant on a contract basis is more cost effective than employing a full-time staff member. You only pay for the time spent on your accounts, avoiding additional expenses like leave, benefits, and equipment.
- Better reporting and expert advice: Outsourcing allows you to access professional accountants or bookkeepers who specialize in their work. Their expertise can provide valuable financial advice and save your business money in the long run.
- Time-saving: Outsourcing bookkeeping and payroll tasks helps free up your time or reduce wages expenses. Allocating more time to business activities and relationship building can be vital for success and can also reduce stress levels.
- Improved service and efficiency: Outsourcing to a bookkeeper can ensure timely invoicing and payments, increasing efficiency and reducing late payments. With more time available, you can focus on enhancing customer service.
Cons of Outsourcing
- Loss of control: Outsourcing can mean less direct control over financial information and confidentiality. It’s essential to find trustworthy accountants or bookkeepers to handle your sensitive data.
- Risk of choosing the wrong contractor: There is always a chance of errors or issues when contracting tasks out to a third party. Seek recommendations from advisors, mentors, or fellow business owners to find the right contractor.
- Confidentiality and security risks: Information security is crucial for your business’s operation. Assess potential contractors for their security measures to ensure the protection of your financial data. Include penalty clauses in the contract to address potential incidents.
- Ultimate responsibility: While you outsource your bookkeeping and payroll tasks, you are still responsible for any mistakes made by the contractor, such as missed tax payments or inaccuracies in figures.
Summary
Consider the advantages and disadvantages of outsourcing bookkeeping and payroll in relation to your business’s life cycle and find a reliable contractor. Discuss the potential benefits and costs with your accountant and explore online accounting software options that can support your outsourcing efforts
Next steps
Consult your accountant about outsourcing bookkeeping and payroll tasks
Research online accounting software options that complement your outsourcing strategy
