The emergence of the online community has changed the direction in which we do business forever. It has brought us closer to users or people, that can help with our day-to- day operations as well as backend business needs, allowing our businesses to run easier or smoother and turn more profit. One of the major places that this has really made a difference for business owners is in bookkeeping.
Bookkeeping is much like going to the dentist-not every one really desires to take the time out to do it but ignoring the issue can lead to serious consequences. For the most part, this is why business owners just want to hire someone to do it and not have to think about it themselves until March or April.
There are many advantages you get from Outsourcing your Bookkeeping
But now, because of that huge availability factor that the online web world provides, it's becoming more practical for companies to take this one step furthermore. There are many businesses detecting a lot of advantages outsourcing bookkeeping operations has. Here are the main 7 benefits you can enjoy as well:
1. More time. Outsourcing your business's bookkeeping working frees up important and valuable time that can be put into enhancing the company. Backend office tasks can be a heavy interruption from the day-to-day running of things and having your bookkeeping in-house can lead to a conflict of interests. All of these are time spoilers and interruptions need to go out of range of view and out of mind.
2. Money saving. By outsourcing your bookkeeping operations, you can save money on paying full-time or part-time payments and conveniences to an employee or staff. You also save on lost productivity costs that come along with hiring staffs onto the payroll. By outsourcing your bookkeeping, you pay for only what you want nothing more or less.
3. Expertise on your side. Outsourcing gives you a better way to have full-time knowledge on your team without having to pay for it around the timer. By placing your books into the hands of a highly experienced or skilled staff who understand the ideal practices and how to properly employee or staff for certain tasks, your duty becomes a whole lot easier and productive.
4. Focused work staff or employee. By eliminating the distractions or interruptions of the office from their jobs, places that take bookkeeping services jobs are able to provide clients with more watchful work. It's hard for a bookkeeper to do their duty around the hustle and bustle of a business-removing them from the site by outsourcing not only helps you concentrate on your business, it helps them concentrate on your business as well.
5. Team employee versus individual. When you outsource your bookkeeping, you're putting your financial records in the hands of an employee or a staff that flourishes on teamwork. Unfortunately, one bookkeeper is not enough to find every sharp nuance that can benefit your organization or company. When you outsource, you have a skilled team of staffs and managers checking each other's work, serving to ensure that you receive the better services possible.
6. Access to top systems. Outsourcing your bookkeeping tasks gives you more access to the top tools in the market. Most of the businesses not able to afford to pay for the extremely expensive bookkeeping services neither can they afford to expend the time keeping up with changing laws and regulations. By outsourcing, you're necessarily purchasing those tools and that knowledge by attorney, but it's even better, you don't have to actually do any of the effort! Plus, these top systems create nightly backups and keep well-organized records and books for years.
7. Scalability options. Lastly, outsourcing your bookkeeping allows you to explore or cutback in the blink of an eye. Whether you're looking to expand your business or cut down on expending, having a faithful team at your direction, providing you with different plans and options will help you achieve your targets and goals. Outsourcing provides flexibility that in-house bookkeepers can't provide.
Who's Watching Your Money?
While I'm a strong advocate of hiring virtual assistants, there are two things that no entrepreneur should ever fully delegate: marketing and bookkeeping. The marketing and the bookkeeping of your business can easily make or break you (just think "new" Coke and Enron). That said, if bookkeeping is not your forte, hire someone to do it - you will save so much in frustration - just be sure to keep your fingers in the books.
If you choose to hire a virtual bookkeeper, keep the following in mind:
1. Get QuickBooks.
For ease of use, I highly recommend using QuickBooks and hiring a QuickBooks ProAdvisor. QuickBooks ProAdvisors have taken certification exams to insure that they know the system. I have used QuickBooks both for myself and my clients and highly recommend it for its ease of use/understanding.
The online version is great in that you can see the latest version of your books at any time and eliminate the annoyance of emailing files back and forth and wondering who has the latest version.
2. They must see both the forest AND the trees.
You want your virtual bookkeeper to be detail-oriented AND to see/understand the big picture. They need to know what happens consistently - every month - and update your books without bothering you for items they should know about.
At the same time, they needs to be astute enough to see the larger picture and warn you of any impending problems before they happen. If you purchase a piece of equipment, she should know how to properly enter it into your bookkeeping software to avoid problems - and therefore save time and money - with your accountant (and the IRS) later on.
3. They must know your industry.
You don't want to have to train your bookkeeper on your industry language, standard industry income or expense categories or other basics. The more up-to-speed they are, the faster they can hit the ground running and the sooner you will have good data. If they don't know your industry however, be sure to give them a rundown of lingo and how you refer to your customers/clients/tenants in order for you to get the most meaningful reports out of the gate.
4. They must provide timely reporting.
In hiring your virtual bookkeeper, insure that you put in a provision for when you want to see monthly financials. The date will depend on when your bank month ends - give them a few days after that date to reconcile your accounts and produce reports. At a minimum, you want to see a profit & loss, balance sheet and cash flow statement.
Take the time to review the reports so you can spot any irregularities before they blossom into problems. Not sure how to read a cash flow statement? Get a check/electronic funds transfer (eft or "auto debit") transaction detail instead. It will help you see where the cash is going.
5. They must know accounting terms and still speak "English".
Your virtual bookkeeper needs to know the difference between assets, liabilities, income, expenses and equity and be able to provide your accountant with the necessary data upon request. At the same time however, if you are not "numbers oriented", they also need to be able to explain the financial statements to you in plain English.
6. They must be trustworthy.
Hiring someone to keep track of your bookkeeping requires a level of trust between you both. You need to feel comfortable that they will keep track of your information and maintain your confidentiality. At the same time, if they pay your bills and have access to your bank accounts, you must also trust that they will not abuse that privilege. And make no mistake, it is a privilege to have someone (particularly in a virtual relationship) trust you with their finances, their checkbook and their business.
Good business sense demands that you protect yourself "just in case". I highly recommend that, in addition to a confidentiality agreement, you insure that your virtual bookkeeper is bonded and you get a copy of that bond.
7. They must have great communication skills.
If your bookkeeper will be communicating with your clients and vendors, they must represent your business as you would. Whether virtual or in-house, it's critical that your bookkeeper be a positive force that further enhances relationships. The question of money can, at times, be a sensitive matter. You need someone who recognizes that and communicates appropriately.
Always remember - these are your books and this is your business. While you may hire someone to manage the details of tracking your finances, and should do so if this is not one of your strengths, the ultimate responsibility for oversight is yours.
Managing your books is a cumbersome but critical task for any business. It can be very time-consuming, frustrating, and could mean working late hours. However, it has to be done to know the worth of your business and to satisfy the government for taxes. You also need to do this on a regular basis to get an accurate idea of your financial health.
How do you make this a stress-free task work for you?
Some small and medium businesses either employ virtual bookkeepers or do the work themselves. No matter how it is done it is still a mundane task involving shuffling papers and working extra hours. Often there is a twinge of doubt that you are not doing something quite right or are missing important information.
Ask any entrepreneur why they went into business and you'll get a hundred different answers. Odds are that "do bookkeeping" was not on the list even though bookkeeping is the core of any successful business. It is the way to measure growth, keep cash flow positive and track expenses.
Bookkeeping is like learning to play a musical instrument. The secret is to learn the fundamentals and create a system that works for the company.
Here are a few tips that could prove helpful to make the right decision for bookkeeping and accounting needs:
Don't mix business and pleasure:
Get a business credit card to enable you to separate your business expenses from your personal. By this time you have already started your business checking account. So adding that business credit card will help you establish and build business credit and points. Co-mingling funds between personal and business is not a productive or efficient way of doing business and can prove to be a headache at tax time.
Keep it simple:
When creating your business in your accounting software don't create too many categories in the chart of accounts. For example, office supplies will be a sufficient category rather than separate categories for paper, letterhead, printer supplies, etc. This complicates profit and loss and adds time to the day-to-day activities when items are being expensed.
Automate your invoicing:
There are many online invoicing services that allow you to schedule invoices for clients who are charged on a regular basis. You will find that most accounting software has the ability to memorize invoices that reoccur monthly. The day of the re-occurrence can even be set such as the first of the month.
Use the right accounting software:
There are many accounting software packages out there that you can use to assist you with your accounting and bookkeeping needs. Of course, I highly recommend Quick Books but there is also a wide variety of Open Source software which is free to download. Additionally there are a wide variety of free manuals and tutorials online.
Outsource to a virtual bookkeeper:
Outsourcing to a virtual bookkeeper saves time, money, worry, and headaches. Many business owners take two common approaches to tackling the issue of bookkeeping. They try to do it themselves - which is time consuming and can lead to costly mistakes. They pay large firms to do it - which is unnecessarily expensive. A professional bookkeeper has the skills and experience to do the job right. There are many advantages to outsourcing your books. Save money, save time, and the need for extra help. The biggest benefit is your bottom line.
• Books that are inaccurate do not reflect the true health of the business
• Being clueless at any level about where the money is going is not being in control of your business.
Business people need to focus on the business:
There are many aspects to running a business and the most important is earning money. Some things just have to be delegated in order to maximize time and productivity. Bookkeeping can be a painful and time consuming process and many business owners do not have the expertise or knowledge to get the job done right. Time spent on bookkeeping activities is time away from making money. Call the professionals at The Bean Counters Bookkeeping.