Outsourced Bookkeeping: A Comprehensive Overview

Outsourcing has become a popular business practice in recent years, and bookkeeping is no exception. 

Employers are increasingly choosing to outsource their bookkeeping functions due to the numerous benefits of this business strategy, such as cost savings, time efficiency, and access to specialized financial expertise. 

In this article, we will explore the world of outsourced bookkeeping—what it is, why you should consider it, what tasks you can outsource, and tips for choosing a bookkeeping service provider. 

By the end of this article, you will have a comprehensive understanding of outsourced bookkeeping and its potential impact on your business.

What Is Outsourced Bookkeeping?

Outsourced bookkeeping means hiring a third-party company or individual to handle all or part of your business’s financial recordkeeping. 

This means that instead of having an in-house bookkeeper, you will have an external bookkeeping team or individual working remotely on your books. 

Outsourced bookkeeping providers are usually equipped with the tools and expertise to manage your financial records accurately and efficiently.

Benefits of Outsourcing Bookkeeping

Bookkeeping outsourcing offers many benefits to businesses of all types. Here are the top 10 benefits that keep employers coming back to outsourcers:

1. Cost savings

Outsourcing your bookkeeping can save your business money in several ways. Firstly, you won’t have to bear the costs of hiring and training an in-house bookkeeping team. Additionally, many outsourced providers offer competitive rates due to their streamlined processes and location.

We cover the cost of outsourced bookkeeping in more detail below.

2. Time efficiency

Bookkeeping is a time-consuming task that requires attention to detail and a high degree of accuracy. By outsourcing this responsibility to professionals who can complete it efficiently, you can free up time for yourself and their employees to focus on other important aspects of the business.

3. Access to specialized expertise

Outsourced bookkeeping providers have in-depth knowledge of accounting principles and practices. They can offer valuable insights and advice to help improve your business’s financial management.

4. Scalability

As your business grows, so does the volume of financial transactions that need to be recorded and managed. Outsourced bookkeeping providers have the resources and flexibility to accommodate business growth without disruptions.

5. Reduced risk of errors

Bookkeeping mistakes can have severe consequences for a business, including penalties from tax authorities or inaccurate financial reporting. By outsourcing this task to financial experts, you can reduce the risk of errors in your financial records.

6. Data security

Outsourced bookkeeping providers have systems and protocols in place to ensure the security of your financial data. It can give you peace of mind knowing that your sensitive information is in safe hands.

7. Access to the latest technology

Outsourced bookkeeping providers use advanced accounting technology and software to manage financial records efficiently. Outsourcing allows you to benefit from access to these tools without having to invest in them yourself.

8. Focus on core business functions

Bookkeeping is just one aspect of running a business, and it can be overwhelming to handle everything on your own. By outsourcing bookkeeping, you can focus on your core business activities without being bogged down by administrative tasks.

9. Better financial management

With the help of outsourced bookkeeping, you can have a clearer and more accurate view of your business’s financial health. This can aid in making informed decisions and setting strategic goals for the future.

10. Compliance with regulations

Outsourced bookkeeping providers are well versed in accounting regulations and can ensure that your business stays compliant with all financial reporting requirements.

When To Consider Outsourcing Bookkeeping

There are several factors to consider when deciding if outsourcing bookkeeping is the right choice for your business. Here are a few signs that indicate it may be time to outsource: 

Limited time or resources

As a business owner, your plate is already full with managing day-to-day operations and making strategic decisions. If you find yourself struggling to keep up with bookkeeping tasks, it may be time to outsource.

Lack of expertise

Bookkeeping requires specialized knowledge and skills, and mistakes can have serious consequences for your business’s financial health. 

If you or your team lack the necessary expertise in this area, outsourcing can provide access to bookkeeping professionals with the right qualifications and experience.

Cost savings

If you don’t have the resources to hire a full-time bookkeeper in-house or want to avoid additional overhead costs such as employee benefits, training, and software expenses, outsourcing can be the cost-effective solution you’re looking for.

Scalability

As your business grows, so do your financial recordkeeping needs. With outsourced bookkeeping, you can easily scale up or down depending on your business’s requirements without having to worry about hiring or letting go of staff.

Compliance concerns

If you’re finding it overwhelming to follow complex regulations and tax laws in your industry, it may be a good time to outsource bookkeeping to professionals to ensure that your records are compliant with all relevant laws and regulations.

Types of Outsourced Bookkeeping Services

Outsourced bookkeeping services can range from basic data entry and bank reconciliation to more complex tasks, such as financial reporting and tax preparation. Some common services offered by outsourced bookkeeping providers include:

Accounts payable management

This involves managing your business’s outgoing payments, such as bills and invoices. Outsourced bookkeeping providers can help you ensure that all payments are made on time and accurately recorded in your books.

Accounts receivable management

Accounts receivable management involves tracking and collecting payments from your customers. Outsourced bookkeeping providers can help you streamline this process, ensuring your cash flow is healthy.

Payroll processing

Managing payroll can be time-consuming and complex, especially for small businesses. Outsourced bookkeeping providers can handle all aspects of your payroll, from calculating payroll taxes to issuing paychecks.

Bank reconciliation

Bank reconciliation compares your business’s bank statements with its internal financial records to ensure accuracy. Outsourced bookkeeping providers can help you reconcile your accounts regularly and identify any discrepancies.

Financial reporting 

Financial reporting involves preparing and analyzing financial statements to provide insights into the health of your business. 

Outsourced bookkeeping providers can generate timely and accurate financial reports, helping you better understand your business’s financial performance.

General ledger maintenance

A general ledger is a record of all your business’s financial transactions. Outsourced bookkeeping providers can maintain and update your general ledger, ensuring that all transactions are accurately recorded.

Tax preparation and filing

Preparing and filing taxes can be a time-consuming and complex process. Outsourced bookkeeping providers have the knowledge and expertise to handle your business’s tax needs, ensuring compliance with all relevant laws and regulations.

Expense tracking and management

Keeping track of expenses is crucial for maintaining your business’s financial health. Outsourced bookkeeping providers can help you monitor and manage your expenses, providing valuable insights into areas where you can cut costs.

6 Countries Where You Can Outsource Bookkeeping Services

Outsourced bookkeeping services are available in various countries around the world. Some popular destinations for outsourcing bookkeeping services include:

1. India

India is one of the leading countries for outsourcing bookkeeping services. It has a large pool of skilled and English-speaking professionals who can handle a wide range of outsourced bookkeeping duties.

Additionally, the cost of outsourcing bookkeeping services in India is relatively low compared with other countries.

2. The Philippines

The Philippines is a popular destination for outsourcing bookkeeping services. The country has a large number of certified public accountants (CPAs) and accounting graduates, making it an attractive option for businesses looking to outsource their financial tasks. 

3. China

China is another country that has seen a rise in popularity as an outsourced bookkeeping location. The country’s large population and growing number of accounting outsourcing professionals make it an attractive option for businesses looking to outsource their financial tasks. 

Additionally, China has a robust technology infrastructure, making it easier for businesses to communicate and collaborate with their outsourced bookkeepers.

4. Mexico

Mexico is an increasingly popular destination for outsourcing in Latin America (LatAm), including for bookkeeping operations. The country has a well-educated and skilled workforce, making it an attractive option for businesses looking to outsource their financial tasks.

Mexico also has favorable time zones for businesses in the United States, making communication and collaboration more convenient.

5. Brazil

Brazil is another LatAm nation that offers competitive outsourced bookkeeping services. The country has a large pool of certified accountants and accounting graduates, making it an attractive choice for businesses looking to outsource their financial tasks. 

Brazil also has a strong technology infrastructure, making communication and collaboration with outsourced bookkeepers easier.

6. Argentina

Argentina is also a popular destination for outsourced bookkeeping services in LatAm. The country’s highly educated and skilled workforce, combined with its favorable time zone for US businesses, makes it a desirable option for outsourcing financial tasks. 

Additionally, Argentina has a much lower cost of living than the US, making it a cost-effective choice for US businesses.

How Much Does Outsourced Bookkeeping Cost?

The cost of outsourced bookkeeping can vary depending on several factors, such as the size and complexity of your business, the scope of services required, and the expertise and experience of the provider. Outsourced bookkeeping costs also depend on where your outsourcing provider is located.

If you choose to outsource from LatAm, for example, an outsourced bookkeeper will cost you around $42,000 per year. This is $12,800 less than the average US bookkeeper’s salary of $54,800.

However, this is a rough estimate for one location. It’s best to get quotes from different providers to determine their specific outsourced bookkeeping prices for your business needs that you can compare and contrast.

Top 5 Outsourced Bookkeeping Companies To Consider

There are many outsourced bookkeeping companies out there, so we’ve made a list of some of the top contenders to help you narrow down your choice. In no particular order, here are our top five bookkeeping companies and recruiting firms for outsourced bookkeeping services:

1. Near

Your friends at Near understand the importance of having a reliable and efficient bookkeeping system for your business. That’s why we offer top-notch outsourced bookkeeping services tailored to your needs. 

Our pool of experienced bookkeepers is well versed in all aspects of financial recordkeeping, ensuring accuracy and efficiency in managing your books.

Take our experience with a health and beauty e-commerce company. We helped them find a professional bookkeeper five times faster than their traditional hiring timeline, saving them $26,000 annually.

2. Gift CPAs

Gift is a dedicated team of small business accountants and bookkeepers located throughout Pennsylvania. They offer accounting and bookkeeping services, among other financial and business support services.

Gift’s outsourced bookkeeping services include bill paying, monthly financial statement preparation, cash flow management, general ledger maintenance, check writing, payables and receivables tracking, bank and credit card reconciliation, and more.

3. Velan Bookkeeping

Based in Dover, Delaware, Velan is an outsourced accounting and bookkeeping firm offering cloud bookkeeping and accounting, financial reporting, and payroll processing, among other financial services.

Its advanced bookkeeping and accounting automation solutions include custom accounts payable and receivable automation, banking automation services, automation for credit card accounting, and more.

4. Outsourced Bookkeeping

Outsourced Bookkeeping has been offering back-office solutions tailored to small to mid-size businesses since 2004. Located in Florida and India, it specializes in bookkeeping, accounting, tax preparation, reconciliation, and accounts payable processing.

The company’s business and bookkeeping outsourcing services include expert bookkeeping, income statement and balance sheet preparation, inventory management, QuickBooks services, income tax planning, US tax return services, reporting, and more.

5. SmartBooks

Outsourced finance company SmartBooks has been dedicated to helping small businesses for over 10 years. Located in Acton, Massachusetts, it’s helped thousands of businesses using powerful technology like SmartBooks Genie.

SmartBooks handles monthly financial statements, accounts receivable, accounts payable, employee expense reports, fixed assets accounting, bank reconciliations, payroll posting, and more.

Final Thoughts

Outsourcing bookkeeping can be a game-changer for employers looking to streamline their financial processes and save valuable time and resources. It offers cost savings, access to specialized expertise, and improved data security. 

At Near, we understand the importance of efficient bookkeeping for businesses of all sizes. That’s why we offer top-notch recruitment services to help you quickly find qualified professionals from LatAm who excel in outsourced bookkeeping. 

Don’t hesitate to contact us today for a free consultation call to learn more about how we can help your business outsource its bookkeeping functions to remote experts within 21 days. 

Frequently Asked Questions

Can I use software like QuickBooks to do my business bookkeeping?

Yes, you can use software tools like QuickBooks to handle basic bookkeeping needs. However, knowledge and experience are required to use it effectively.Though using bookkeeping software alone may be enough for small businesses with simple bookkeeping requirements, it’s recommended to rely on a bookkeeping provider with advanced bookkeeping knowledge as your bookkeeping functions become more complicated.

Outsourced bookkeeping providers are usually well -versed in using various accounting software, including QuickBooks.

Can I teach myself bookkeeping?

While it is possible to teach yourself bookkeeping, it can be time-consuming and may not yield accurate results.

Unless you only need to perform very basic bookkeeping tasks, it is best to leave this responsibility to professionals with the necessary expertise and experience, particularly as your business scales and your bookkeeping needs become more complex.

How do bookkeepers work remotely?

Bookkeepers can work remotely by using cloud-based accounting software. This allows them to access your financial records safely from anywhere with an internet connection while enabling you to save on overhead costs associated with hiring on-site bookkeepers.