A most common question I get asked more recently is whether SME’s should outsource their bookkeeping or keep it in-house.
Here are some of my thoughts on this and some guidance.
Firstly, ‘What is a Bookkeeper?’
A simplified version is “a person who handles the financial transactions coming in and out of the business”.
These would include sales invoicing, purchases, cash and banking (including reconciliations), completing vat returns, payroll and data management. They ensure you as a business owner stay in control of your finances.
They provide the information for financial reporting and statements which are then given to the Accountant. The accountant will then be able to review and offer guidance on tax and financial advice if needed and ensure the business is running as efficiently as possible.
Benefits of outsourcing:
- Expertise and knowledge of a qualified bookkeeper / accountant. Keeping this in-house could potentially lead to a knowledge gap, this would lead to further problems down the line and external help may be required.
- Cost benefits – No salary costs are required when outsourcing such as pension contributions, holiday, sickness, training costs etc. You only pay for their services when they are required.
- Allows you as a business owner to gain more ‘free time’ to either work on the business or spend it with family members doing what you enjoy!
- Most bookkeepers and accountants are now up to date with cloud technology meaning they are aware of the latest upgrades and services which may be applicable. The use of the cloud allows businesses to log in from anywhere and view Real Time Information (RTI) to make any decisions.
- Use of technology today e.g. Zoom online video conferencing means that virtual meetings can be arranged between a client and bookkeeper / accountant as easy as ‘popping to their office’.
- Having a person external can offer suggestions or ask questions that you or others haven’t considered.
- Allows you as a business the opportunity to grow.
Outsourcing services doesn’t suit every business, some may prefer to have a dedicated person in-house who sits and goes through everything on a day to day basis. But, it really comes down to you and how you want to run your business.