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What Is a Bookkeeping Service and What Are the Pros and Cons?

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From the moment you start operating your business, you already know with certainty that bookkeeping is essential. It goes beyond recording financial data, as it involves many aspects that will ensure your business stays on track. There are two solutions open to you for engaging a bookkeeper; you can either employ one in-house or outsource from a third-party provider.

What can a bookkeeping service do for your business?

Bookkeeping services vary in their approach to helping you manage your company’s finances. But in general, there are three stages involved. First, the firm allows a software specialist to tailor fit a process of filing and accessing your business data. Custom software will ensure that specific needs are addressed. The next step involves having a bookkeeper take care of all tasks – including all financial transactions, no matter how small or inconsequential they may appear.

Depending on your contract with the bookkeeping service, they may also handle payroll, create monthly reports as well as work on your company’s tax calculations and returns. They can help reconcile accounts during tax season and ensure everything is in order. Many critical business decisions also require the assistance of a bookkeeper. For instance, if you plan to apply for a substantial business loan, your bookkeeper can handle the paperwork and follow-up on the application.

Once the system is already in place, the bookkeeper can pretty much handle these responsibilities seamlessly, with the help of the software specialist. The last stage comes in the form of an auditor or controller who is responsible for reviewing the accuracy of records kept by the bookkeeper. At this stage, the auditor will bring to light any inconsistencies, discrepancies or potential issues.

How will your business benefit from a bookkeeping service?

The advantages of hiring a bookkeeping service go beyond their expertise and efficiency in completing critical tasks. Most importantly, the system they have in place makes it possible for your business to implement a robust and consistent structure for financial processes. In a way, there is transparency and uniformity in terms of essential transactions within the organisation.

Working with an outsourced bookkeeping service can also reduce overhead costs. They’re accountable for errors or mistakes; hence you’re guaranteed that they will always do their best to perform according to your expectations. Moreover, you will save time by working with an expert firm that has all the knowledge and expertise in everything that involves accounting.

Are there drawbacks to outsourcing a bookkeeping service?

We make an excellent case in highlighting the benefits of hiring a bookkeeping service. But let’s not forget any possible drawbacks. Perhaps one of the most common concerns with outsourcing is security. Allowing another company access to your financial data could pose risks. That is why it’s crucial to review security protocols as well as the company’s reputation before you decide to hire.

If you’re outsourcing a company that works overseas, another problem could be the difference in time zones. Before choosing to hire an overseas bookkeeping firm, check if they’re willing to adjust to your preferred business hours to ensure that there won’t be lapses in communication.

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