Why Accountants Should Consider Outsourced Bookkeeping: Key Services

Accountants often deal with a wide range of financial responsibilities. Dealing with time-consuming functions like bookkeeping can make it challenging to focus on fulfilling their core competencies and providing high-quality services to their clients.

Fortunately, there is an efficient solution to this problem. Outsourcing bookkeeping services has become popular among accounting firms looking to streamline their financial operations, reduce overhead costs, and increase accuracy. 

This article will explore the key services offered by bookkeeping outsourcing providers, how they can benefit your accounting practice, and what to consider when choosing a provider to partner with.

Why Should Accountants Consider Outsourcing Bookkeeping?

There are many reasons accountants across the United States are turning to outsourced bookkeeping. Here are the top five:

1. Cost savings

Outsourcing bookkeeping services can cost significantly less than hiring in-house bookkeepers. It eliminates expenses such as salaries, benefits, training costs, and office space for additional employees. 

Outsourced bookkeeping providers often offer flexible pricing plans tailored to your business needs, allowing you to save money without compromising quality.

2. Increased accuracy

Bookkeeping requires a high level of attention to detail and accuracy. Outsourced bookkeeping providers often have specialized teams with extensive experience handling financial data, ensuring that your records are accurate and up to date. 

While in-house bookkeeping requires you to hire from the limited pool of talent available in your area, outsourcing providers find and vet accountants worldwide, ensuring a higher standard of work. 

3. Focus on higher-level tasks

Outsourcing bookkeeping frees up your time and resources to focus on higher-level accounting tasks, such as financial analysis, strategic planning, and client consulting. These often require specialized skills, making it more efficient to partner with an external provider that focuses on these tasks.

This allows you to provide more value to your clients and grow your business while leaving the day-to-day bookkeeping responsibilities in capable hands, making sure every aspect of your business runs smoothly.

4. Scalability

As your accounting firm grows, so does the volume of bookkeeping tasks you need to handle. By outsourcing bookkeeping services, you can easily scale your bookkeeping operations up or down depending on your business objectives without having to hire or lay off employees.

This flexibility allows you to adapt quickly to changes in demand while maintaining a consistent level of service for clients.

5. Access to advanced technology

Utilizing cutting-edge technology is more important than ever: Between 2021 and 2023, 91% of accountants used technology to better meet their clients’ changing needs.

Outsourced bookkeepers often have access to the latest accounting software and technology, which can improve efficiency and accuracy in managing your financial records.

This eliminates the need to invest in expensive bookkeeping software or constantly update your financial systems, saving valuable time and money while advancing your accounting firm’s technological capabilities.

Key Services Offered by Outsourced Bookkeeping Firms

Outsourced bookkeeping providers offer a wide range of financial services, sometimes tailored explicitly for accounting firms. These services include:

Transaction management

Outsourcing bookkeeping services for accountants can help them manage their day-to-day transactions more efficiently. This includes tasks like recording and categorizing expenses and reconciling bank statements.

By outsourcing these tasks, you can free up time to focus on higher-level financial analysis and strategic planning.

Financial reporting

Financial reporting is a crucial aspect of accounting. Fortunately, outsourcing bookkeeping services can ensure accurate and timely financial reports. These providers have expertise in preparing financial statements such as balance sheets, income statements, and cash flow statements.

They also understand regulatory requirements and can help ensure compliance with industry standards.

Payroll processing

Payroll processing is a time-consuming task that can be easily outsourced. By partnering with an outsourcing provider, you can ensure timely and accurate payroll processing for your clients. 

This includes calculating wages, taxes, and benefits, as well as preparing paychecks or direct deposits.

Accounts payable and receivable management

Outsourcing bookkeeping services also includes managing accounts payable and accounts receivable for accounting firms. This involves tracking and processing payments to vendors, invoicing clients, and following up on overdue payments. 

Bank reconciliation

Bank reconciliation is a vital part of bookkeeping, as it helps ensure that all financial transactions are accurately recorded and balanced. 

Outsourcing this task to a specialized provider can save you time and ensure accuracy in your clients’ records. It also helps identify discrepancies or errors in the bank statements, allowing for timely resolution.

Expense tracking and management

Outsourced bookkeeping firms can also handle expense tracking and management, ensuring that all business expenses are accurately recorded and categorized. 

This service includes tracking receipts, monitoring credit card transactions, and reconciling expenses against bank statements. By outsourcing this task, you can focus on providing higher-level financial analysis for your clients.

Tax preparation and filing

Tax season can be a stressful time for accountants, with some accountants working 11 to 12 hours per day, six days per week. Outsourced bookkeeping providers can handle tax preparation and filing, including:

• Calculating income tax liabilities
• Completing necessary forms
• Submitting forms to the relevant authorities

This service not only saves time but also reduces the risk of errors that could lead to penalties or audits.

Financial statement preparation

Preparing financial statements requires attention to detail and extensive knowledge of accounting principles. Outsourced bookkeeping providers can handle this essential task, ensuring your firm’s financial statements are accurate and compliant with relevant regulations.

Budgeting and forecasting

Bookkeeping service providers are also able to assist with budgeting and forecasting, helping you plan for future growth and make informed business decisions. 

Outsourced bookkeeping professionals can use their expertise in financial analysis and data interpretation to provide valuable insights to support your firm’s strategic planning.

Cash flow management

Cash flow is a crucial aspect of any business, and outsourced bookkeeping providers can help you effectively manage your cash flow. 

They can monitor and track cash inflows and outflows, identify potential issues or opportunities, and provide recommendations for improvement.

Compliance and regulatory reporting

Outsourcing bookkeeping services also includes keeping up with ever-changing compliance and regulatory requirements. 

Outsourced providers are well versed in these regulations and can ensure that your accounting firm remains compliant, avoiding penalties or legal issues.

Internal audits

Outsourced bookkeeping providers can also conduct internal audits, ensuring that your accounting processes are accurate and efficient. Handing this task off to an external provider can save you significant time and resources. 

Year-end closing assistance

The year-end closing process can be time-consuming and stressful for accountants. By outsourcing this task, you can free up your accounting team’s time to focus on higher-level accounting tasks while ensuring a smooth and accurate year-end closing.

Outsourced bookkeeping providers can assist with reconciliations, financial statements, and tax preparation.

Data entry and recordkeeping

Bookkeeping involves a lot of data entry and recordkeeping, which can be tedious and time-consuming. Outsourcing this task to skilled professionals ensures that your records are accurate and up to date, saving you time and effort.

This also helps to avoid errors and discrepancies in your financial records.

Financial analysis and consultation

Outsourced bookkeeping providers often have dedicated teams of experienced financial experts who can not only manage your financial records but also provide valuable insights and analysis to help you make better decisions.

Inventory management

For accounting firms that work with clients in the retail or manufacturing industry, inventory management can be a time-consuming task.

Outsourced bookkeeping providers have the expertise and tools to track inventory levels, reconcile accounts, and generate reports for better inventory management.

Account reconciliation

Account reconciliation is a crucial aspect of bookkeeping, ensuring that all transactions are accurately recorded and accounted for. 

By outsourcing this bookkeeping function to the right professionals, you can ensure accuracy and save time on manual data entry.

Fixed asset management

Fixed assets, such as property or equipment, require special attention when it comes to bookkeeping. 

Outsourced bookkeeping providers can help track and manage fixed assets, ensuring accurate depreciation calculations and compliance with accounting standards.

Management reporting

Outsourcing bookkeeping services can provide you with timely and accurate management reports, allowing you to make informed decisions regarding your business operations. 

These reports may include profit and loss statements, balance sheets, and cash flow projections.

Virtual CFO services

By outsourcing bookkeeping, accounting firms can also have access to virtual chief financial officer (CFO) services. These professionals can provide strategic financial advice and assist with budgeting, forecasting, and financial planning. 

Remote CFO services are especially valuable for small or medium-sized accounting firms that do not have the resources to hire a full-time CFO.

Essential Factors to Consider When Choosing a Bookkeeping Provider

Choosing the right bookkeeping provider is crucial for the success of your accounting firm. When evaluating a dedicated bookkeeping provider or recruiting or staffing accounting firm, consider these factors:

Core competencies and services offered

Not all bookkeeping providers offer the same services. Make sure to choose a provider that offers the specific bookkeeping services your accounting firm needs.

Time zone alignment

Time zones are an important consideration if you decide to utilize offshore bookkeeping.

If you require real-time collaboration or fast turnaround times, consider outsourcing to a location that aligns with your business hours, like Latin America. This will allow for smooth communication and collaboration without any significant time differences.

Security measures and data protection

Outsourcing bookkeeping involves sharing sensitive financial information, so it’s essential to choose a provider that has robust security measures in place. Look for providers with data encryption, secure servers, and strict confidentiality policies.

Communication practices

Effective communication is crucial for a successful outsourcing relationship. Look for providers that offer clear and timely communication, with options for regular updates and progress reports.

Cultural compatibility

Working with an outsourced provider means collaborating with professionals from a different culture and background. It is essential to choose a provider that understands your business’s values and expectations.

Final Thoughts

Choosing to outsource bookkeeping for accountants can bring numerous benefits to your firm, allowing you to focus on higher-level accounting tasks and provide better services to your clients. 

When choosing a provider, remember to consider factors like the services offered, time zones, security measures, and cultural alignment. If you’re looking for a place to start your search for the most reputable companies, see our list of the best bookkeeping outsourcing services.