The Benefits of Outsourced Bookkeeping for Small Businesses

Financial technology platform Intuit defines bookkeeping as tracking and recording a business or individual’s financial transactions. It involves systematically organizing and maintaining records and logging the money that flows in and out of the company. 

As a fundamental aspect of accounting, bookkeeping is essential for monitoring the financial health of an entity, making informed financial decisions, and meeting regulatory and tax requirements.

When businesses want professionals to balance their books, they have two options: hiring an in-house bookkeeper or outsourcing the tasks to an external vendor.

What Are Outsourced Bookkeeping Services? And How Does It Work?

According to Investopedia, outsourcing is the practice of hiring a third-party entity to perform services or create goods traditionally performed by the company's employees and staff. The most commonly outsourced business functions include customer support, IT management, bookkeeping, and human resources management.

Read More: Everything You Need to Know About HR Outsourcing

Accounting or bookkeeping outsourcing involves entrusting a third-party company to handle one’s financial and accounting tasks. Instead of managing bookkeeping functions in-house, organizations contract with a specialized service provider to perform these tasks and pay them a fixed monthly fee.

Outsourced bookkeeping services can vary in scope and be tailored to meet the client's specific needs. Nexus HR, for example, offers its services in different tiers and price points, depending on the services included at each level. Here are several solutions bookkeeping or accounting firms offer:

• Financial Record Keeping
• Bank Reconciliation
• Accounts Payable Management
• Accounts Receivable Management
• Expense Tracking
• Budgeting and Forecasting Assistance
• Financial Reports
• Financial Analysis
• Tax Preparation Support
• Financial Consultation

While different bookkeeping firms may have their unique processes and approaches, Intuit states they typically follow the same general steps:

1. You provide the firm access to your financial accounts and software.
2. Your dedicated bookkeeper balances your books, monitors cash flow, and creates financial reports in the background.
3. Your bookkeeping team sends the expected financial information, documentation, or reports at the end of each month.

How Do Small Businesses Benefit from Outsourced Bookkeeping Services?

Small businesses face numerous challenges in their quest for growth and success because they often have limited resources and staffing. If you own or manage a small business, you know exactly what it’s like.

Bookkeeping is one of the key operational areas you probably struggle to manage in-house. A practical solution to that would be outsourcing it. Here are the top benefits small businesses enjoy with outsourced bookkeeping services:

You Save Time and Money

Outsourcing bookkeeping is often more cost-effective than hiring and maintaining in-house bookkeepers, which isn’t hard to believe, considering the average annual salary of one entry-level bookkeeper in California is $47,973.

By partnering with a trusted bookkeeping service provider, you can save on costs associated with employee salaries, benefits, training, and overhead expenses. You only pay for the bookkeeping services you need, allowing for greater budget control and flexibility.

Outsourcing bookkeeping also saves you valuable time. With experts handling your books, you can redirect your time and attention to serving clients, pursuing growth opportunities, and caring for your team.

Read More: 5 Key Traits of a Good Manager (According to the People They Manage) 

You Get Access to Expertise and Accuracy

Established bookkeeping firms employ highly skilled professionals who are well-versed in accounting best practices, compliance, and financial regulations. By outsourcing your tasks, you gain access to an entire team’s expertise and knowledge, reduce the risk of errors, and make well-informed financial decisions.

Nexus HR, for example, has a team of certified QuickBooks ProAdvisors who handle clients’ finances. With years of experience navigating various accounting software systems and delivering top-notch financial management solutions, Nexus HR’s bookkeeping services ensure clients’ books are accurate, up-to-date, and compliant.

You Can Focus on Your Core Business

When business owners take on the responsibility of managing financial records and bookkeeping in-house, they often find themselves facing administrative tasks that consume a significant amount of time and attention. This can be a distraction from core competencies and business-building initiatives. 

While managing your books in-house isn’t a bad idea, a report by business research firm Clutch reveals that successful businesses outsource accounting tasks as they grow and expand.

The study found that among small businesses under the same management for less than a year, 73% have an in-house accounting team. That figure dipped to 49% among small businesses under the same management for five years or more.

By delegating bookkeeping tasks to experts, you can free up your time and focus your energy on growing the business. 

Read More: Should I Outsource Payroll? Yes—And Here’s Why 

Experience Better Business Accounting with Nexus HR

While it’s common for most small business owners to juggle multiple roles, handling business finances isn’t something everyone can do. It takes experience and expertise to get it right, which is why you need seasoned bookkeeping professionals on your side.

With a highly skilled team and streamlined process, Nexus HR is committed to providing accurate, efficient, and reliable bookkeeping solutions that set you up for financial success.

Get your books done fast and right with Nexus HR bookkeeping services.