Traditionally, most businesses used an in-house bookkeeper, however, thanks to advances in technology, the traditional choice may no longer be the best choice for every business. Remote bookkeepers are reliable and widely available, and the technology they use is secure.
In this post, we’ll help you evaluate the pros, cons and costs of hiring vs. outsourcing your bookkeeper.
Hiring an In-House Bookkeeper
Hiring an in-house bookkeeper means officially hiring a bookkeeper as a part of your business. For many small and medium businesses, this means hiring one person, but the tasks they need to perform can be defined by the business owner. This can be beneficial if the business has bookkeeping needs that are specialized or unusual, or if a lot of the accounting work is done the old-fashioned way, on paper. They’re also free to evolve with a business, and they may be able to multitask and bring additional value to their role beyond accounting. What’s more, an in-house bookkeeper typically works at the place of business, giving them close proximity to paperwork and staff when needed.
Unfortunately, hiring an in-house bookkeeper also requires you to understand enough about accounting to recognize when a candidate is a good fit. Defining their role within your business also means taking the time to develop all the necessary business processes to handle your needs from scratch. While this isn’t necessarily a bad thing, it can also end up being inefficient, or less than best-in-class. The ability to multitask can become a problem when a bookkeeper’s additional responsibilities prohibit them from focusing on their core duties, which can, in turn, result in late reports and other obstacles.
The actual cost of hiring an in-house bookkeeper involves four areas: taxes, wages and benefits, overhead and additional time, and effort. Hiring an employee takes time, and there are the costs of placing ads and time spent on interviews. Since this is an employee of your business, you’re responsible for paying their salary, providing benefits (sick days, health insurance and retirement) and paying payroll taxes. You’ll need to give them raises as fit their position, too. If your business is big enough, that may not be a problem, but there’s more to consider. You’ll need to provide office space and the necessary equipment, utilities and supplies, and you’ll have to take time training and onboarding them. And of course, there’s always employee turnover to consider.
The likelihood of turnover at some point isn’t something to be taken lightly. If you have one dedicated person that solely runs your accounting department, with all of the knowledge, passwords and access to your books, this could be detrimental and incredibly stressful if they quit, go on some kind of leave, or are let go. Finding a replacement quickly and smoothly may not always be easy and is certainly something to consider when deciding between hiring in-house vs. outsourcing.
Outsourcing a Remote Bookkeeper
Outsourcing your bookkeeper means hiring a third party bookkeeping company to handle your accounting remotely. This is especially good for businesses with multiple locations or employees who don’t always work from the same place, since the bookkeepers from the firm are already remote. But it’s also a great solution for those who question whether they need a full-time bookkeeper on salary or fear some of the issues pointed to previously in this article.
Bookkeeping companies (like Keeping Your Balance) are especially beneficial to businesses because they do the hard work of finding the best bookkeepers around and are limited geographically to one city or state. They vet their hires, which ensures they can provide expertise in a variety of areas, industries and business situations.
To avoid the issue of turnover, each client (even the smallest of companies who might not have been able to even afford to hire one full-time accountant) has a team of bookkeepers able to work on their account. By outsourcing your accounting in this way, you can ensure that if a bookkeeper leaves your accounting doesn’t skip a beat, because all of your documents, processes and systems are streamlined in a secure environment within the firm. This kind of team environment makes everything faster and more efficient.
When it comes to remote bookkeeping companies, there are also checks and protocols in place to ensure no fraud occurs, and the technology that’s utilized is highly secure, probably more secure than the systems in place at most businesses. The best remote bookkeeping companies invest a lot of time and money in training and software to ensure their team is efficient and effective in providing not only superior bookkeeping but also other services like payroll, HR and ongoing insights and consultation.
Lastly, it’s important to note that by outsourcing your accounting needs you’re able to tap into a wealth of systems, processes, structure and software that you might not have by simply hiring your own bookkeeper internally. A company like Keeping Your Balance can provide years of experience and expertise that will allow you focus on what you know best… your business.
The question of whether you should handle your accounting in-house vs. outsourcing your bookkeeping is an important one, and you should take the time to make sure you consider all the benefits and drawbacks of each. Ultimately, you need to choose the option best suited to your business. If you’d like to learn more about our remote bookkeeping services or further explore the benefits of outsourcing your accounting, you can request a consultation here.