Not always. There's pros and cons to both. If you're sitting on the fence about outsourced bookkeeping services, there's a lot to think about.
I want this post to act as a guide to help you discover what's best for your company.
Unfortunately, bookkeeping services are advertised online as the one-stop-shop for all your accounting headaches. In some cases that's definitely possible. In my experience though, there are still some things that you and your staff are going to be better off doing.
I'll cover those in the blog post below so that you can be as prepared as possible before you make such an important decision.
The Pros to Bookkeeping Services
When most people start shopping for bookkeeping services, they usually do so out of a desire to save money on their accounting systems. It's a valiant reason to shop around, but there are a few other benefits.
#1 - Experience Is Worth It's Weight in Gold
The biggest benefit to bookkeeping services has to be the experience of the accountant you work with. This is all they do. Unlike hiring someone in-house who may spend half their day answering phones, gossiping by the water cooler and playing on Facebook, bookkeeping services spend all day every day providing bookkeeping. How much better do you think they'll be at it?
Henry Ford popularized the idea of assembly line automation for a reason. Hiring a specialist to perform a specific function creates a lot of efficiency.
#2 - Tools, Tools and More Tools
The second biggest benefit to bookkeeping services has got to be the tools. These companies are chomping at the bit to earn your business. They're constantly trying to come up with ways to create a better financial mouse trap. An in-house employee can get stuck in a rut due to the lack of competition.
The third benefit has got to be customer service. Bookkeeping services are vendors which means that customer service is assumed in the relationship. With an employee, entitlement often creeps in which can get ugly. As a vendor, the bookkeeping service knows it needs to earn your business or it will lose the account.
#4 - Look at How Flexible You Are!
The fourth benefit is that you have a lighter and more flexible business. When you hire an employee, they take up space, require training and a host of other things to keep them efficient. Bookkeeping services absorb all of that plus the cost of payroll taxes, HR and more.
#5 - Getting Hit by a Truck
The fifth benefit is consistency. If you have an in-house bookkeeper that gets hit by a truck, you're up a creek. Good bookkeeping services will have a system in place to deal with emergencies. For example, at Ignite Spot, we create training manuals for each client so that if the accountant is sick, another member of our staff can fill in to keep your business running. Good stuff!
The Cons to a Bookkeeping Service
I'll be the first to tell you that bookkeeping services won't solve all of your accounting headaches. It's unfortunate that every company out there claims to take everything off of your plate. It's just not possible. With that in mind, here are the cons you should think through before you join the outsourced bookkeeping services band wagon:
The first con is customer and vendor knowledge. Yes, your bookkeeping service will get to know your customers and vendors very well, but working in-person at your office full-time makes that a lot easier. As such, your bookkeeping service will need some guidance on things.
I would recommend setting up an approval system when communication between your customers and vendors occur. For example, at Ignite Spot, we use a platform called Podio to track all of the communication, tasks, calendar items and more for our clients. When we bring on a new client, we work with them through Podio to ensure that they're comfortable with us sending an invoice to a customer or a payment to a vendor.
If you let your bookkeeping service send out documents willy-nilly, you're going to get an angry customer or vendor sooner or later.
#2 - Instant Gratification
The second con is availability. Your outsourced bookkeeping service can't possibly be there for you 24/7 like an in-house bookkeeper could. That's why the services are far more affordable. At Ignite Spot, we tend to be about 40% of the cost of an in-house bookkeeper or better. That savings is achieved because your accountant is working on more than one company.
#3 - You Said What?
The third con has got to be the expectations gap. You'll want to work with a bookkeeping service that knows how to manage this. With accounting, if you expect one thing to happen and your bookkeeper misunderstands you and does something else, you're going to be frustrated. The fact that you can't look over this persons should to make sure they're on task can get tricky. At Ignite Spot, a part of our culture is R.A.C.E. We use this acronym to help us make sure we're on task.
Here's what it stands for:
R = Restate. Our accountants are trained to restate the main points of a conversation.
A = Action List. From there we create list of actions that need to be taken.
C = Calendar it. Yep, we schedule a time to make it happen.
E = Exit. Let the client know when we are finished.
It's a simple system, but we came up with it to help use make sure that every entrepreneur we work with feels understood.
Your 3-Part Tool Kit for Deciding
Before you decide on what you are going to do, here's a list of resources you can turn to to make sure you get your questions answed:
#1 - Attend the Free Webinar
Make sure to check out our free webinar titled "How Does Outsourced Accounting Actually Work?" It's a great way to learn more about the logistics of outsourced bookkeeping services without the stress of talking to a sales guy over the phone.
#2 - Get Our Reference Guide
Review our infographic title "In-house versus Outsourced" as a quick reference guide.
#3 - Know the Right Questions to Ask
Once you start shopping, check out our post titled : "10 Questions to Ask When Shopping for an Accountant."
What Questions Do You Have?
We would love to hear from you. Post your questions in the area below and we'll respond.
Thanks for reading today's post. I hope that you feel better prepared to make the right decision for your company. Good luck in your research! The fact that you're taking steps to improve your financial platform with an in-house employee or outsourced bookkeeping services is great. Keep up the awesomeness.