If there’s one thing we’ve learned from 15+ years of cleaning up people’s QuickBooks files, it’s this:
Most small businesses do an awful job with their accounting.
We know, that’s a pretty harsh statement. But it's true. The vast majority of small businesses buy a piece of accounting software, hire the cheapest bookkeeper they can find, and start winging it.
Unfortunately, building a solid accounting system takes a lot more work than that. Although today's software and tech tools are more amazing than ever, some behind-the-wheel experience is required to set them up and use them correctly. Also, accounting is complex by nature and, if you don’t get the right processes in place, it can quickly become a full-time job.
If you don’t have the time or patience to manage the accounting side of your business, it might make sense to think about outsourcing some or all of it. Seriously. Large companies have been using this strategy for years, it's called BPO (or “Business Process Outsourcing”). And now that the cloud is here, it’s both practical and affordable for small businesses to do the same thing.
Here are four reasons why outsourced accounting is worth considering:
#1 no employee required
In our opinion, 95% of small businesses don’t need an in-house bookkeeper or accountant. There’s usually a lot of work required to get your system up and running, but once that’s done, you probably won’t have enough work for an employee.
With outsourcing, you can hire a part-time accountant to log in and work on your books for 30 minutes a day, or five hours a week, or whatever it takes. Plus, there are no hiring, training, or HR issues. This is the kind of lightweight, flexible approach that makes a lot more sense for small businesses.
#2 no learning curve
When you hire an outside accountant, you’re basically hiring an experienced pro who can do the job better, faster, and more reliably than you can. Although their services aren't always cheap, accounting pros have technical skills that you don't and do the same type of work over and over again, so they're unlikely to make mistakes.
What’s more, outside accountants typically work with a wide variety of clients and can apply the lessons they’ve learned to any situation. If you're facing a tricky accounting problem or tax issue, chances are they’ve seen it before and will know exactly what to do.
#3 a simpler approach
As we mentioned earlier, most small businesses don't have a coherent accounting strategy. Instead, they usually hire a variety of vendors — bookkeeper, payroll service, year-end CPA — and piece things together as they go.
The problem with this approach is that it makes your accounting fragmented and difficult to manage. But with outsourcing, you can hire one jack-of-all-trades accountant or firm to handle all your accounting needs right from the start. This is far simpler than working with multiple vendors, and it’s easier to manage because everything’s under one roof.
#4 an expert set of eyes on the books
Last but not least, outsourcing can provide the one thing that most small businesses are in dire need of: an independent, professional set of eyes on the books.
In addition to maintaining your accounting system and preparing accurate financials, a skilled accountant can help you interpret your data, spot problems you might not be aware of, and offer useful advice when needed. This type of “independent advisor” role is far superior to what an in-house bookkeeper or employee can provide.
The Bottom Line
In our opinion, outsourced accounting is a complete game changer for small businesses. It provides a better, faster, and more cost-effective way to handle your accounting operations than ever before. In addition, it enables you to hire an experienced accountant or firm right from the start and avoid the rookie mistakes that many small businesses make.
If you need professional accounting on a part-time basis, and you don’t want to hire an employee or build your own accounting department, outsourcing is the perfect choice.