Outsourced Bookkeeping Services Can Save You Time & Money, While Helping You Plan
As a business owner, you make critical decisions on behalf of your company every day. Because your success is strongly tied to transparency, or knowing where you are financially, well-organized, accurate financial records are fundamental in making these decisions effectively. As your company grows, you will likely find that managing your company’s finances requires more and more time and the challenges you face become increasingly complex. According to a study by Wasp Barcode, 21% of small and midsize business owners admit to not knowing enough about bookkeeping, yet only 14% are outsourcing bookkeeping services. Outsourcing your bookkeeping services can help you meet your business goals by saving you time and money, and by helping you plan for what lies ahead.
How can outsourced bookkeeping services save you time?
According to a study by Sage, small businesses spend an average of 120 working days per year on administrative tasks. Bookkeeping tasks, such as general journal and subsidiary ledger maintenance, bank statement reconciliation, and tracking and analysis of receivables and payables, are among those time-consuming functions that leave business owners caught in the administrative weeds. By outsourcing these tasks, you can shift your focus back where it needs to be: on your business's growth.
What good is all the financial data you compile if it is not easily interpreted and analyzed? Accurate, timely, and relevant reporting is another advantage of outsourcing. Business owners have regular access to summary reports detailing accounts receivable and accounts payable. You gain visibility of the company’s financial health in terms of revenue, expenses, profits, and losses. You can effectively gauge your company’s ability to meet short-term and long-term financial obligations without the time expenditure of sifting through and compiling all of the data.
How can outsourced bookkeeping services save you money?
Trusting the professionals with your books helps minimize risk. Outsourced bookkeeping services provide companies with proper segregation of duties, and checks and balances that help prevent occupational fraud. According to the ACFE 2020 Report to the Nations, 26% of occupational fraud occurs in small organizations with 100 or fewer employees, with a median loss of $150,000 per instance of fraud.
Because professional bookkeepers often employ automated processes, outsourcing your bookkeeping services can reduce the risk of costly data entry errors, such as duplicate entries, transposed numbers, or entering a transaction in the wrong account or sub-account. Errors resulting from improper bookkeeping processes can lead to incorrect income or expense reporting, skewed cash flow information, fees and interest associated with the late payment of an invoice, and non-compliance issues.
Efficient bookkeeping can reveal non-essential expenses, which may allow you to reduce or eliminate certain expenses. Additionally, it helps you assess fees and contract pricing to manage your contractual obligations appropriately.
When it comes to tax planning and preparation, your accountant interprets and analyzes the data recorded by the bookkeeper. If that data does not represent your financial standing accurately, it could lead to missed opportunities, such as tax credits, deductions, or exemptions, and higher federal, state, or local tax liabilities.
How can outsourced bookkeeping services help you plan?
Meeting business goals requires strategic and financial planning. Useful cash flow projections and practical cost control efforts both begin with proper budgeting. You need a properly prepared budget to assess your working capital, liquidity needs, and ability to borrow when necessary. Accurate forecasts and if/then analyses allow you to plan ahead for deficits, manage shortfalls, and meet your mark.
All of these planning elements must be based on an accurate record of financial transactions to be useful. Outsourcing your bookkeeping services to knowledgeable industry professionals helps you make business decisions that are backed by sound financial information.
Contact Livingston & Haynes
L&H is a leader in providing thorough bookkeeping services and trusted payroll, tax, and consulting services. My team can assist with developing bookkeeping and business strategies that focus on the financial and the operational sides of your business. I help business owners with the bookkeeping services they need to implement their strategic plans and meet their business goals. If you’re ready to take the next step, contact me today.
by Steven J. Haynes, MBA
Steven Haynes, MBA, is an administrative partner at Livingston & Haynes. Steve’s firm, Emerging Business Partners (EBPI), became an affiliate of L&H in 2007. Steve specializes in bookkeeping, payroll, and business advisory services, including tax, M&A, and funding and equity transactions, for technology, entrepreneurial, and emerging growth firms.