What Are the Advantages of Hiring An Outside Bookkeeper?
Business owners often wonder what the advantages of hiring an outside bookkeeper are. The answer is simple: there are a lot of advantages. Take a look below to see My OC Bookkeeper’s list of some of the most important benefits of hiring an outside bookkeeper. The advantages listed are: lower costs, decrease turnover, keep your focus on what you do best, make sure your books aren’t biased, flexibility, elimination of distractions and expertise. Read on to learn more!
Lower Costs
One of the most important keys to business success is keeping costs down. Whether you are a brand new startup or a seasoned company, low costs are central to success. Hiring an outside bookkeeper can be an excellent way to do just this. Unlike with a full time in-house bookkeeper you don’t have to worry about paying payroll taxes, benefits, or paid vacations. Nor do you have to commit to a full time (or even part time) employee salary and if cash is temporarily low can potentially briefly delay bookkeeping operations. (Although we certainly don’t recommend doing so for too long. In fact, situations like this are a perfect time to discuss strategy with us!)
Decrease Turnover
The unfortunate reality is that employee bookkeepers tend to come and go often, creating a high level of staff turnover. This can be problematic for many reasons: the cost of repeatedly on-boarding and training new employees, a negative impact on morale, labor shortages, and an inability to complete the desired bookkeeping tasks in a timely manner. Imagine, for example, if your bookkeeper left just before tax season! This would be a colossal headache. Working with an outside bookkeeper can help you to avoid all of these issues. Rather than working with an employee you are working with a company, and good bookkeeping companies are around forever. Don’t be surprised if your bookkeeping company is still going strong when you are ready to retire.
Keep Your Focus on What You Do Best
Running a small business can be an exhausting and challenging exercise. (Not too mention incredibly rewarding.) Sometimes there is a temptation to take on everything yourself but this can cause problems when you have too much work and / or are doing things you don’t really understand. Issues like this can cause real problems come tax time, and on some occasions can compound other problems to really put you in a bind. A great way to avoid this is to hire an outside bookkeeper so that you can focus on what you do best. Or, another option would be to hire a bookkeeping company to provide you with some formal training. Either way, properly designating responsibilities is crucial for business success.
Make Sure Your Books Aren’t Biased
Sometimes it can be problematic for an owner, or someone with a vested interest in a company to handle the books. There can be subjectivity in managing books, and it’s important that whoever is taking care of them won’t be influenced by anything but getting them right. Emotional attachment to the business, for example, can cause people to either interpret things incorrectly or make what an unbiased individual may consider to be an error. Unintentional errors made without emotion can also cause problems. If one of the partners makes a mistake then there may be accusations of misconduct which can create a toxic work environment.
Flexibility
This is related to lower costs but worth mentioning on its own. When you hire an outside bookkeeper they can expand their workload or decrease their workload overnight. This gives you an incredible amount of flexibility that can be extremely valuable. When you have a bookkeeper on staff, changing their workload is generally a long term commitment with significant lag time. If you convert a part time employee to a full time employee because the workload has gone up, converting them back to part time status can be extremely problematic. Likewise, telling a full time employee to take a week off unpaid is never good. When you work with an outside bookkeeper you don’t have to worry about these issues.
Elimination of Distractions
Onsite bookkeepers often get pulled into tasks unrelated to their official positions. In some cases this can cause inefficiencies and problematic work flows. By working with an outside bookkeeper you can be confident that your bookkeeper with be entirely focused on what they are supposed to be — bookkeeping.
Expertise
While there are many great internal bookkeepers out there, they rarely hold as much expertise on as wide ranging accounting topics as an outside company. Bookkeeping companies have various employees with various kinds of expertise, and work with all kinds of clients. They also may have managers and owners with expertise of their own. This enables them to help you on a wider range of issues than an internal bookkeeper usually can. At My OC Bookkeeper we can help you with everything from day to day bookkeeping to developing advanced financial models. It’s not likely that you will find an internal bookkeeper with that level of expertise.
Do you agree with the advantages of hiring an outside bookkeeper that we have noted? Does that mean you are looking for a great outside bookkeeper? My OC Bookkeeper is Orange County, CA’s best bookkeeping, accounting and tax specialist. We partner with great businesses all over Southern California and the world. Reach out to us and let’s do great things together.
Did you enjoy the blog post? Check out My OC Bookkeeper’s blog, the best bookkeeping and accounting blog in Orange County, CA. Prefer videos? We have some great videos on accounting, bookkeeping, and business on our YouTube channel. Or, just reach out to us here.
Want to learn more about the advantages of using outside bookkeepers and the services that My OC Bookkeeper offers? Take a look at the video below.
13 Comments
I like how you mentioned that an outside bookkeeper can expand or decrease their workload overnight. My friend is working on starting up his own business, so I think he’d be interested in reading this article. Do you have any tips for choosing a bookkeeper to help him out?
Thank you so much for reaching out Taylor. You pose a great question that I suspect may be the topic of an upcoming blog post.
Some factors you may wish to consider include: educational background, fluency with technology, the availability of references, and even personality. (Also, whether or not the founder of the firm has lived in Kensington, Brooklyn and misses it…)
Education is a fairly obvious one and can serve as a ‘signaling mechanism’ for various characteristics as well as an indication of having sufficient expertise. In the case of My OC Bookkeeper, the founder has a bachelor’s in economics, a master’s in finance and economics, is becoming an enrolled agent, and has completed all three portions of the CFA.
In terms of fluency with technology, bookkeeping and accounting are becoming more and more focused on software, whether it’s Quickbooks, Xero, ADP, or Excel, to name a few. The more your bookkeeper understands technology, the more options you will have to address your challenges.
References is an obvious one. It’s always preferable to work with people who others are happy to vouch for.
Lastly, personality. This one might seem a bit odd, but depending on the nature of your business you may have significant interaction with your bookkeeper. It’s always preferable to work with someone whose company you enjoy.
Thanks again for the question. Please don’t hesitate to reach out anytime. Go BK go!
My friend is working on starting a business, so he’s been wondering if he should hire an external bookkeeper to help him. I love how you said that outsourcing bookkeeping can provide you with an already trained individual. What are some more qualities one should look for when hiring a bookkeeper?
Accounting is not my specialty as a businesswoman so I might hire a bookkeeping service from outside to keep the costs low and save money for high-quality work. Since it would help me keep on focusing on my business, they might help me grow my business. I do agree that my books shouldn’t be biased so if they can help keep it at a smooth pace, I’ll hire them.
Thank you for the comment Sariah. We certainly agree that in business it is important to focus on what you do best.
I loved how you mentioned that hiring a bookkeeper can help you with keeping costs down. My brother just recently opened up his own business a couple of weeks ago, and he was telling me last night about how he wants to make sure that he is good with his finances. I’ll make sure to pass this information along to him so that he can look into hiring a bookkeeping service.
Never too early to start taking care of the finances.
I totally agree with you when you said that keeping costs low can help your business to grow up fast. My friend told me that his retail company is having a lot of sales but he doesn’t see much of a profit. I will recommend him to outsource his financial matters to a bookkeeper so that he can get professional advice.
Thanks for the feedback Derek. Best of luck to your friend!
It’s good that you point out that hiring a bookkeeping service can give you more time to focus on running your business. I want to start my own business soon, so I’m considering hiring a bookkeeping service. I’m going to look for a reputable bookkeeping service to hire.
Glad to hear it. Best of luck!
I like when you discuss the advantage of hiring an outside bookkeeper wherein you mention the ability to expand their workload. Their flexibility can be an asset to the company and can have the work done promptly. It’s also essential that we look after the expertise of an outside bookkeeper. This will give options to small companies that have just started and are still establishing their business.
Thanks for the comment Dianne. We certainly agree that flexibility is one of the big advantages of working with an outside bookkeeper – especially for new companies. Bringing on additional staff that aren’t necessarily needed can cause challenges for sure. Best wishes!