Benefits of Bookkeeping Outsourcing for Small Businesses What Is Bookkeeping Outsourcing? To understand the benefits of outsourcing bookkeeping functions, one must first know what it means to outsource. According to Merriam-Webster, to outsource is “to procure (usually goods and/or services) under contract with an outside supplier”. Businesses of all sizes outsource their accounting for a variety of reasons. Perhaps there are not enough resources within the business to complete the function in house, or perhaps it is more cost effective to contract out the bookkeeping work than to provide a full- time bookkeeper with a salary and benefits. Sometimes, companies decide to outsource the bookkeeping work, because frees up internal resources for focusing on tasks more related to the business’s main purpose. What Should Be Kept In Mind When Considering Outsourcing? When a business owner is considering contracting out the bookkeeping work, there are some key things he/she should keep in mind. The benefits of outsourcing the bookkeeping functions should be considered- it is cost effective, frees up resources, and saves time- against those of an in-house bookkeeper. In addition, the type of bookkeeping services needed deserves some attention, as well. If a business pays special attention to a specific industry, a bookkeeper with experience in that same industry should be chosen. Whether a smaller, more personal firm, or a larger firm will better be able to handle the business’s books should also get some consideration. All of these factors should be heavily weighed to determine if bookkeeping outsourcing, and its many benefits, is right for a particular small business and its needs. What are the Benefits of Outsourcing Accounting Functions? The benefits of outsourcing can be numerous, especially for many small businesses. Outsourcing accounting functions can be cost effective in a number of ways. Bookkeeping outsourcing allows business owners to save on the costs of hiring a full-time employee to do the same work. Money is not simply saved when it comes to salary, either. When a business owner chooses to outsource the bookkeeping, he or she will face a reduction in employer payroll taxes, will not have to pay for another employee to train the new employee, and will not have to fund workers compensation insurance, health insurance, retirement plans, or paid sick/vacation days for a full-time employee to do the work. Another way that bookkeeping outsourcing can be cost effective is that it puts the bookkeeping into the hands of experts, who are less likely to make costly mistakes. Another benefit that can go along with choosing to contract out the bookkeeping functions of a business is that many bookkeeping outsourcing companies allow business owners to access their key financial information 24/7, and to speak with experts whenever necessary during the day. In addition, outsourcing the accounting can free up physical space and equipment for a small business, which can allow for it to be more productive with its other functions. The Takeaway The benefits of outsourcing are plentiful for small businesses. Time, money, and other resources that would typically be put towards this function can be put towards other projects within the business for higher revenues. It is well worth taking the time and doing the research to find out what bookkeeping outsourcing can do for your specific business and needs.