If you’re a CPA working by yourself or if you own your own accounting firm, you may be interested in outsourcing your bookkeeping services. Accounting and bookkeeping are very different, so you may be able to preserve your accounting responsibilities while offloading the bookkeeping end of things. This is especially important if you’re also dividing your attention between accounting responsibilities and general business tasks, like high-level strategy, marketing, and advertising.
Many accountants are intimidated by the perceived complexity of outsourcing your bookkeeping services, but it’s simpler than you think. In this guide, we’ll teach you the basics of bookkeeping outsourcing and how to execute on your strategy effectively.
Why Should CPAs Outsource Bookkeeping?
Let’s start by focusing on the reasons you might outsource your bookkeeping services. Any number of these advantages may appeal to you (or all of them may), but it’s important to know where you stand before you start making changes to how you operate.
Consider the following:
1. Save Time and Focus on Core Business
One of the most important advantages is getting to save time. Every task you offload to a bookkeeping service provider is a task you don’t have to do yourself. You can use this extra time however you want; for example, if you’re trying to sketch out a plan for your accounting startup, you can use the extra hours to wrap up that phase of your project. In any case, you’ll have more hours to do what you think is most important.
2. Manage Higher Workloads with Ease
No matter how industrious you are, there will come a point where you simply can’t take on anymore clients. You may be willing to take on the new clients, and you may have clients asking for your services, but there are only so many hours in the day.
3. Improve Accuracy and Bookkeeping Quality
Bookkeeping is somewhat straightforward work, but it still needs to be done accurately. If you’re so distracted with your higher-level priorities and responsibilities, you may be tired or sloppy when it comes to these tasks. Assuming you’re working with a qualified partner, you can count on your bookkeeping being done as accurately and completely as possible. This can be a lifesaver.
4. Achieve Cost Efficiency
Depending on how you outsource your bookkeeping services and who you partner with, outsourcing can greatly increase your efficiency and ultimately save you money. Rather than hiring someone full-time to take on the work, or suffering losses in other areas because you have to do the work yourself, you can pay a low rate to have some other qualified person do it for you. If you’re still charging your clients the same rate, this translates to a profit.
5. The Simplicity of Bookkeeping
Bookkeeping is inherently simple, and there aren’t many different approaches to how it’s done. This means you can rest assured that the people you hire to take care of your bookkeeping services will do a good job. In other words, you eliminate one of the biggest disadvantages of other types of outsourcing: the fear that the job won’t be done to your specifications. By outsourcing, you gain peace of mind, knowing that the standardized nature of bookkeeping minimizes the risk of errors or miscommunication.
Outsourced Accounting and Bookkeeping Services: How to Outsource
Ultimately, there are a few different ways you can outsource your bookkeeping services, each with advantages and disadvantages that make them ideal for different types of businesses.
Part-Time Workers
Your first option is to hire another employee part-time to handle the bookkeeping responsibilities. This is useful because it allows you to work side-by-side with someone and could provide a route to a full-time hire if you need one eventually. However, part-time employees tend to have limitations, such as restrictions on the type of work they can take on or how many hours they can work per week.
Freelancers and Contractors
Another common option is to seek freelancers and contractors individually. Because there are so many options, you can almost certainly find a good fit. If one freelancer becomes overwhelmed or unavailable, you can easily find another to replace them. However, freelancers tend to be less reliable and harder to find than either part-time workers or bookkeeping agencies.
A Bookkeeping Agency or Similar Organization
Your best bet may be finding an agency or a similar organization that connects you with bookkeeping service providers. These organizations tend to be highly reliable, with access to a vast network of qualified workers. On top of that, they typically have highly polished communication and task assignment practices, ensuring the efficiency of your workflow.
Outsourced Bookkeeping for CPAs: Choosing Your Main Priorities
Before you get further in your decision-making process, you’ll need to decide what your main priorities are. When outsourcing bookkeeping, all of these factors may be important to you, but some of them will ultimately be more important than others. Decide which ones are most important for your organization, so you can choose a partner who’s the best possible fit:
Expertise
Expertise should be one of your highest priorities. While bookkeeping isn’t quite as demanding as accounting, it’s still important to have educated, trained people working on your tasks. This is especially important if you have a VIP client base, where you need to guarantee the security and integrity of your work. No matter what your priorities are, this should be one of your top considerations.
Reliability
You also need to gauge the reliability of the partner you’re choosing, at least to some degree. "Reliability" can refer to a number of things. For example, can you rest assured that this partner will be able to handle any assignment you give them? Can they guarantee a reasonable turnaround time? What happens if they run into a problem—can you trust they’ll resolve it quickly?
Security
It’s worth investigating the kinds of security measures taken by your prospective partner. Are they transparent about their security protocols, or do they seem to dodge the question? Do they use encrypted communication channels? How secure are their platforms overall? These are critical questions to ensure the protection of sensitive financial information.
Workload Potential
Every individual or organization will have an upper limit to the volume of work they can take on. If you only need temporary help, this may not be an important factor for you. However, if you’re planning to scale your accounting practice indefinitely, you’ll need to find an organization with a nearly limitless upper ceiling to handle future growth.
Cost
Cost should be lower on your list of priorities compared to factors like security and expertise. However, if you’re working with a strict budget, think carefully about the cost of the bookkeeping services you consider and ensure that you’re getting the best value in return.
Communication
No matter what, you’ll need to communicate with your bookkeeping service provider. The smoother and more consistent that communication is, the better. How quickly does this provider respond to your messages? How clearly can they articulate their perspective? Do they respond well to clear, concise instructions?
Reviews and Experience
When reviewing potential partners, it’s also a good idea to evaluate their previous clients and the experience they’ve had. Look at the reviews they’ve gotten in the past. These factors may be difficult to assess for a newer partner, so they may take a backseat to other considerations like communication and workload potential.
Outsourced Bookkeeping for Startups: Getting Started
Now that you’ve understood the basics of bookkeeping outsourcing and you’ve decided on your main priorities, you’ll be ready to choose a partner and begin reaping the rewards of the approach. You can start by working with Taxfyle; we have a robust network of CPAs and freelancers who are all more than qualified to handle your bookkeeping services (and save you time and money in the process). If you’d like to learn more, schedule a demo of Taxfyle today!
