Full article with thanks to: growfactor.com/blog/why-outsource-your-bookkeeping
Let’s face it, you started your business because you have a passion and a dream. You didn’t start your own business because you love spending hours each week filing receipts and allocating expenditures. Likely, when you think of your dream it doesn’t include entering transactions into a spreadsheet every Sunday evening.
However, bookkeeping is necessary because there is great value in keeping your books up-to-date. 96% of UK businesses fail because they don’t have visibility of their numbers. Bookkeeping is key in providing you much-needed visibility.
Now whilst online accounting software, such as Xero and QuickBooks, can generate profitability reports at the touch of a button, thus removing the need for spreadsheets in your life, this is only worthwhile if the figures are accurate and correct.
As a small business owner, it is vital that you are able to monitor the performance of your business. To achieve this you need real-time visibility of your financials and a clear understanding of what the numbers actually mean. Without this, you cannot make informed strategic decisions or plan effectively. This is when businesses fail.
Accurate bookkeeping and accounting are essential but they shouldn’t take up all your time each week. As an entrepreneur and small business owner, your time is premium and valuable. You should be focusing on developing your business, winning new clients and providing a great service.
Many business owners find it difficult to let go and give control of key business functions to someone else. It is a difficult mindset to change but it must change if you want to reach your growth targets. You won’t achieve your vision if you are stuck doing your bookkeeping in-house.
These are the benefits you can expect when you outsource your bookkeeping:
1. More time to provide value to your clients
As we’ve established, you are more than capable of doing your own bookkeeping but it isn’t the best use of your time. How long do you spend on bookkeeping each week? Now imagine if you had that time to spend on improving your service and adding value to your clients. Not only would this help maintain happy clients who would stay with your company for longer but you’d likely receive more customer referrals as a result!
2. Increased efficiency and focus
One of the key reasons why outsourcing is recommended for businesses is that it helps you increase your efficiency and focus. Without the distraction of bookkeeping, you can focus on the actions that will help you achieve your business growth objectives. If it doesn’t directly impact your overall goal you shouldn’t be wasting your valuable time on it.
3. Risk Management and Accuracy
As a business owner, you are not a trained bookkeeper. That means you spend double (sometimes even triple) the hours it would take a trained bookkeeper to bring your accounts up-to-date. In addition to increased efficiency, a trained outsourced bookkeeper would be more accurate.
Bookkeeping mistakes are common and can result in detrimental consequences. Under-claiming and over-claiming VAT are very common mistakes small UK businesses make. In these cases, it can lead to HMRC investigations, penalties and potential cash flow problems.
Another common issue is expenses are coded to the balance sheet code rather than to the profit and loss. Profits are overstated as a result and important decisions are based on incorrect figures.
4. Access to a highly trained bookkeeper
Outsourced bookkeeping gives you instant access to highly trained professionals who are constantly learning and honing their craft. This works hand in hand with software solutions that will streamline the process. Working with a bookkeeping expert will ensure your bookkeeping is always the best it can be. Leave the experts to what they are good at so you can focus on what you are good at.
5. Benefit from top bookkeeping systems
An outsourced bookkeeper will use the latest systems, technology and processes available on the market which you will benefit from. Your bookkeeping processes will be efficient and conducted using the best software – no more spreadsheets and receipts inboxes! This will give you better visibility of your numbers so you can make better, informed decisions.
6. It gets done regardless of your schedule
If you handle your own bookkeeping in-house you have to be prepared to make up time when you are sick or on holiday. When you hire bookkeeping services you no longer have to worry about when you’ll get the time or how you’ll fit it into your schedule. You can feel confident that your outsourced bookkeeper will meet deadlines regardless.
7. Save money
Many business owners avoid outsourcing their bookkeeping because they believe they are saving money by doing it themselves. In reality, your time is worth more than keeping your bookkeeping in-house. You should be bringing in new business and developing the business, not coding transactions.
8. You don’t have to hire an employee
Small businesses do not need an in-house bookkeeper. If you hire an outsourced bookkeeper you can avoid paying employee overheads, holiday pay, payroll taxes, and training costs. This is important when it comes to improving your profit margin.
9. Business growth
Outsourcing your bookkeeping will free up your valuable time to focus on your business growth strategies. Plus accurate and reliable finances are key to making the right important decisions. Outsourced bookkeeping will put you in a better position to achieve your vision.
For your business to be successful you need to understand your business’s cost of sales and fixed costs. Without this understanding, you cannot measure the profitability of your business accurately. This starts with good bookkeeping.
Thanks to the widespread availability of cloud technology, it’s now easier than ever to outsource bookkeeping tasks and the benefits are crystal clear. It’s far less risky, far more efficient, and incredibly cost-effective. Plus with the extra time gained you can focus on attracting and selling to new customers so you can reach your growth targets.
Outsourced bookkeeping is essential to business success.
Full article with thanks to: growfactor.com/blog/why-outsource-your-bookkeeping
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