As an owner of the start-up, it frequently makes sense to cut down the costs by administering your bookkeeping functions when you are just beginning. But as your start-up expands, the time and prowess it takes to properly finish your monthly bookkeeping would push you towards taking aid from bookkeeping experts. If you are at this stage, you would indeed ponder about it: which type of bookkeeping provides the best solution for start-ups?
Those start-ups in the initial stages and small businesses should opt for online accounting and bookkeeping services because they will have a few transactions or administrative tasks. This saves expenses of hiring, training, and maintaining a dedicated bookkeeper on a full-time basis.
As against, the majority opts for one of these two common alternatives given below.
Recruit a part-time bookkeeper as a permanent employee or a freelancer or work with your company for specific hours each month.
– Work with an outsourced bookkeeping service that has a team of bookkeepers who have the expertise to handle your day-to-day finance tasks from a distance.
Both of these solutions provide you essential bookkeeping functions, such as recording a transaction, reconciling bank and credit card accounts, summarizing accounts, and maintaining accounts payable and account receivables. But the primary differentiation between recruiting a bookkeeper and outsourcing your bookkeeping is that an outsourced bookkeeping service provider gives you access to a team of bookkeepers. The importance of these services is that each bookkeeper can provide, are finite according to their skill set, the tools they have worked with, and the time they can devote to your business. If they are not aware of a specific transaction type or accounting procedure, they might not handle it efficiently.
Outsourced bookkeeping solutions have numerous bookkeepers, accountants, and finance experts, they possess vast experience with different stages of companies, industries, and types of transactions. Consequently, they would be better positioned for assessment and correct a wider range of situations than an individual bookkeeper can. For the start-ups, these primary dissimilarities produce four significant benefits of outsourcing bookkeeping.
– You get bookkeeping services that have the potential to scale with your business.
As your start-up expands and develops, your bookkeeping solution would require you to scale in line with it. Just because outsource bookkeeping teams have access to professionals on various topics, they can quickly assimilate your interchangeable bookkeeping requirements. Initially, your start-up may need someone to manage and maintain your accounting software and perform day-to-day bookkeeping functions. As your finance becomes more complicated and you need extra support, many financial firms that provide outsourced bookkeeping also have the expertise to offer accounting services and CFO services as when as required.
Whereas a part-time or in-house bookkeeper might have a drastic understanding of your types of business, you may encounter difficulty as your business expands into new areas. For example, suppose your primary attention is on B2C products, and you enlarge into providing B2B products. In that case, your part-time bookkeeper might not possess the skillset and experience to set up the bookkeeping system needed to support your B2B business operations. Then you will have to another bookkeeper who can do so or searching out for a bookkeeper replacement who can do both. Comparatively, if you select a team of outsourced bookkeepers with vast experience in business, then they would be fully equipped to modernize your bookkeeping and accounting operations suitable to your business plans.
– You get more prowess in return for your money.
It can be not very easy to find high-grade business professionals in your business vertical to recruit on a part-time basis. Particularly in your start-up’s initial days, it is enticing to recruit a less experienced bookkeeper to maintain at low costs. We have seen many businesses shift to outsourcing bookkeeping after neglecting opportunities because their part-time bookkeeper was not familiar with their industry’s special requirements. When you work with an outsourced bookkeeping firm, you get guidance and supervision from their high-ranking bookkeepers and professionals in your vertical, without the cost of recruiting them individually.
– You better be prepped for tax season.
Either you work with a part-time bookkeeper or an outsourced service, your bookkeeper will lay down the foundational work for easy and smooth tax preparations and submission experience. A team of bookkeepers can help with the tax submission post your GST online registration because they have invaluable experience preparing tax submission and will have the bandwidth to get your books ready before the time. Your virtual bookkeeping team would make sure that your expenses and transactions are correctly categorized. Your documentation is appropriately organized and readily available, so your books are up-to-date and ready for the tax accountant for further process. When your bookkeeping service delivers the tax information, the accountant will not require to waste time searching for missing financial information or sort out inaccuracies. You can be confident that you will not be leaving money on the table.
– You will receive all-day access.
The number of hours you get with a part-time bookkeeper will be noted down in their contractual agreement; they would be focusing on other clients outside of these hours. This could be a concern if time-sensitive bookkeeping tasks (like quick responses to customers’ requests or delivering recent financial statements during the fundraising process) arises when your bookkeeper is not available. You might have to wait for days to receive a response or taking valuable time away from crucial business priorities. At the same time, you step in to handle these business functions by yourself alone.
While you work with the outsourced bookkeeping solution, you can directly contact and interact with the team and have someone who can provide you an on-time solution for your problems/issues during regular business hours. A few solutions even give you extended hours so you can get answers to your questions, no matter what the time it is. Additionally, having finite contacting hours, outsourced bookkeeping solutions can also be more adjustable about the amount of the work that needs to be finished monthly. As your transaction volume increases or your business finances become more abstract, it might become more than a part-time bookkeeper to manage within their set hours, but still not sufficient to need a full-time or in-house bookkeeper. An outsourced bookkeeping service will have the team’s capacity to offer a solution to any of your business needs.
As mentioned earlier, the reasons would help you make a better decision when it comes to outsourcing your accounts to bookkeeping services.