Bookkeeping is usually one of the first tasks that gets outsourced by a busy business owner. To this person, bookkeeping is a chore, a time suck, and real drag.
But outsourcing bookkeeping costs money. Business owners looking to minimize cost and maximize time may have an “it depends” answer on whether or not to outsource bookkeeping.
For the emerging company, often cash is tight, accounting is an afterthought, and there aren’t enough hours in the day to create and grow the business. But with a modern approach to the classic bookkeeping problem, let’s consider how a business owner can maximize time and money by recognizing the impact of his or her own personal preferences and professional experiences.
Do you like having someone physically come to your office to type in all your expenses, print checks to for you to sign, send out invoices, and reconcile your accounts?
If yes, you should realize these are your preferences and not representative of your service provider’s technical abilities. The point of having a bookkeeper is to maintain the books effectively and efficiently so that the business owner can make timely decisions with complete and accurate financial information.
There’s nothing wrong with having a person come to your office regularly to take care of these administrative chores. However, there’s a high cost of doing business this way, and your resources may be better spent elsewhere.
Most modern bookkeepers and accountants will be able to complete work remotely and check in with you when questions arise or reports are complete. There are software tools available that enable a bookkeeper to route payables for electronic approval and payment (with an audit trail!) without ever having to use paper. There are ways to create estimates, send invoices, follow up for collections, receive and post payments, and reconcile deposits all online. By working with a tech-savvy bookkeeper, you’re likely to find extra time in your day and cash in your bank account. Winning.
Some business owners are comfortable with the meaning of debits and credits, want to be involved in the ongoing maintenance of their accounting records, and get excited about having a robust chart of accounts. Some are not. And that’s ok.
Take for example insurance expense. Business owners with an affinity for accounting may want to break out different types of insurance charges into separate accounts on the P&L:
A less detail-oriented business owner may want to just have two categories of insurance: General Business and Medical Premiums.
But how is this set up in your books? Did you want to keep track of all this detail or did you want to pay someone to do that for you? Balancing your capability and capacity to maintain your business books regularly is key to uncovering savings with respect to time and money.
What if, instead of trying to find a bookkeeper to take things off your plate, you try finding an advisor to assess your tools, your workflow, your values, and your staff capacity to see if an upgrade or modification in processes paired with a select group of affordable cloud tools, ultimately improving the quality and timeliness of financial information and reducing the need for a traditional “bookkeeper.”
When owners and managers of emerging companies ask questions about who, what, and how of their business finances and processes, advisors often encourage them to take a hard look at the balance they’re trying to strike with their most valuable resources: time and money.
Drawing from the personal preferences and professional experiences of the business owner, advisors can craft meaningful solutions that create efficiencies that don’t break the bank.