In-House Vs Outsourced Bookkeeping: What Works Best For Small Businesses?
Did you know that more than one-third of small companies presently outsource a business process? Contrary to common perceptions, outsourcing manual or technical tasks is not limited to business giants only. According to a survey conducted by Clutch.co, 52% of small businesses plan to join the category this year.
Bookkeeping is one of the major tasks that any business, big or small, has to perform on a regular basis. Accurate account bookkeeping is as time-consuming as it is essential. When you are a small business, your finances may not seem much to handle in the beginning. But as your workload increases, daily transactions, receipts and vendor payments keep piling up. This is where the need arises to either hire an in-house bookkeeper or partner with a firm that outsources bookkeeping services for small businesses. Your core business activities don’t hold any real value unless your finances and taxes are taken care of and proper records are maintained.
In the same survey, clutch.co found that 37% of small businesses outsource bookkeeping services whereas the rest still hosts traditional in-house bookkeepers and accountants. If you are a business owner looking to get your finances in order, you can be easily confused about which option works best for small businesses.
In today’s post, let us solve this predicament once and for all. Read on for a detailed discussion about the pros and cons of both in-house and outsourced bookkeeping services
Quality and Accuracy of Work:
Looking for an in-house bookkeeper means spending hours looking through resumes and taking tons of interviews. Moreover, if you are a small business, you may not even receive applications from experts or people with more experience. This can greatly affect the quality and accuracy of work.
Outsourcing bookkeeping services for small businesses is a boon in this regard. Firms that provide bookkeeping and accounting services often employ people who have years of experience and specializations in certain sectors of the industry. The firms also make it mandatory that all CPAs stay up to date with certifications and have the training required to operate modern accounting software.
Cost of Bookkeeping:
When you hire an in-house employee for account bookkeeping, you are not only paying his salary. From health insurance packages to several other benefits, the overall cost-to-company becomes manifold when hiring an employee for manual tasks like bookkeeping.
When bookkeeping services for small businesses is outsourced, the firms charge a flat fee for an all-inclusive package of bookkeeping and accounting services. There are no hidden costs and you get your work done regularly without the hassle of sick-leaves and vacations.
Chances of Fraud:
For in-house solutions, there is always one bookkeeper who is in charge of maintaining every financial record of your business. This gives a lot of power and control into the hands of one employee which naturally increases the chance of fraud or tampering of data.
Bookkeeping services when outsourced to a firm, there is always a huge framework of checks and balances when CPAs deal with sensitive financial data of companies. There is no single person in charge and hence, the data is efficiently monitored, reducing chances of discrepancies.
Availability of the Latest Software:
There are several new accounting software available in the market that significantly increases the productivity and accuracy of bookkeeping. For a small business, getting your hands on the latest technology can be a costly deal. Without this, your account bookkeeping process will be slower, less efficient and time-consuming as compared to firms that offer bookkeeping services.
Since the firms work with many clients on a daily basis, they need to maintain their reputation and submit their reports on time. To make their job easier, most bookkeeping and accounting services firms use advanced software to perform their daily tasks.
The Flexibility of Service Options:
Hiring an in-house bookkeeper means you are paying him for one task – bookkeeping. There are several other related tasks that need to be done but for that, you might have to pay him extra or hire another employee for accounting and taxes.
Outsourcing from a firm has a major advantage in this case. Most bookkeeping services firms have a host of service options for you to choose from. They are flexible in their approach and you only pay for the services you choose to take from them. From accounting services to maintaining your audits and taxes, there are several financial tasks that a firm can do better, with more flexibility than an in-house employee.
How Bookkeeping Services by PikoHANA Benefits Small Businesses
Maintaining your financial records for accurate accounting and tax-filing is an absolute necessity for businesses. Small businesses that cannot divert huge investments towards non-core back-office tasks, might find themselves facing an issue with their finance books.
PikoHANA ensures end-to-end back office solutions to businesses, irrespective of their size. There are several pricing packages that are curated keeping in mind the needs of small businesses. Even the simplest bookkeeping services package includes accounting support that uses the latest software. The plan also takes care of reconciliation of bank statements, vendor invoices, and helps businesses to prepare their unaudited financial statements while also maintaining and filing tax returns.
Want to know more about the services provided by PikoHANA? Read our article: Features of accounting services provided by PikoHANA in Singapore
To sum up, it is clear by now that bookkeeping and accounting services are a must for your business. But investing in a new solution requires a lot of research and planning. Even if you decide to outsource a service, make sure to learn in detail about the firm before taking the plunge. That being said, it is always a good idea to let the experts handle your accounts and books while you invest more time into the core activities that add value and aids in the growth of your business.