Top Questions About Outsourcing Small Business Bookkeeping: Answered

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If you’re a small business owner, you may have already started to automate certain processes in order to save time, money and to eliminate human error. But workflow automation can only go so far when you consider all the tasks on your to-do list as an entrepreneur. That said, it may be time to explore outsourcing non-core functions, such as your bookkeeping needs, so you can boost productivity, reduce stress and focus on your strategic growth objectives.

Remote Quality Bookkeeping Founder and CEO, Mark Kilduff, shed some light on the ins and outs of outsourced bookkeeping on a recent episode of The Nuts and Bolts Boot Camp™ on Revenue and Profit podcast. Be sure to check out his entire interview with host, Diane Dawson.

And keep reading to learn more about the costs, benefits and risks of outsourcing your small business bookkeeping needs.

WHAT DOES IT MEAN TO OUTSOURCE?

Outsourcing is not a new concept and many of us outsource tasks in our personal lives without even realizing it. For example, if you’ve discovered plumbing leaks in your home, there’s a good chance you will call a plumber to come in and fix it. DIY plumbing gone wrong can end up costing a lot more than if you had hired a professional in the first place.

The same principle of outsourcing applies to the business world as well.

With regards to bookkeeping specifically, Kilduff highlights that when clients transfer back-office type tasks — such as bank reconciliation — to the RQB team, it allows the business owner to focus on what they do best. This includes building better client relationships, exploring new partnerships and expanding the business.

HOW DO YOU KNOW WHEN IT’S TIME TO OUTSOURCE?

There are a few scenarios to consider when answering this question.

Scenario 1: Doing the books on your own makes you nervous.

Are you confident that your financial statements are accurate?
Do you know how to interpret your financials?
Are you fully prepared in the event of an IRS audit?

If you answered “no” to any of these questions, Kilduff says it’s time to consider outsourcing.

With outsourcing, you can rely on professionals to manage the books on your behalf. In addition, outsourced bookkeeping providers leverage cloud technology – so you can access your data at any time, from anywhere and on any device. This allows you to make real‐time decisions based on the financial health of your organization.
Accurate books also help to reduce the potential for IRS audits. In the event that you are summoned for an audit, RQB makes it easy to substantiate anything that the IRS may question by keeping track of all your income, expenses and documentation in one, convenient, easily-accessible location.

Scenario 2: You’ve lost faith in your in-house bookkeeper
Kilduff explains that if you’re having trouble getting timely responses from your in-house bookkeeper when it comes to critical issues like cash flow forecasting, then it may be time to part ways and consider outsourcing.

Remember that when you’re relying on a single person to keep your books up-to-date it leaves your business at risk. What happens when that individual calls in sick, goes on vacation or worse yet, leaves you entirely? By hiring an outsourced bookkeeper, you gain access to an entire team of professionals who are available whenever you need them to be thus ensuring business continuity.

Scenario 3: You’re paying too much.
Many small business owners are overpaying for their bookkeeping needs by hiring someone in-house on a full-time or part-time basis. A typical full-time bookkeeper costs in excess of $42,000 per year and the cost of a part-time bookkeeper is roughly half that amount.

On the other hand, Kilduff explains that RQB is “a tenth of what it would cost you to have someone in-house.” How is this possible? RQB invests in state-of-the art technology in order to become as efficient as possible. We can do this because of the scale of our operations and the availability of advanced technology the average business owner simply does not have access to.

WHAT ARE THE RISKS WITH OUTSOURCING YOUR BOOKKEEPING?

Kilduff cautions that not all outsourced bookkeeping providers are created equally. Price should be a secondary consideration after vetting expertise and quality of services provided. It is important to do your research and review client testimonials to ensure that the person or team you plan on hiring comes highly recommended.

As a small business owner, you may also have concerns about security when it comes to storing and accessing your confidential business information in the cloud. The good news is that most bookkeepers have multiple layers of data protection, security cameras to monitor access to files and the ability to do constant testing for disaster recovery and connectivity. For example, Remote Quality Bookkeeping hosts our client data in a state-of-the-art tier 4 data center locating in Dallas, Texas. Tier 4 facilities have no single points of failure.

Rest assured that the cloud is much safer than a local hard drive. In the event of theft or a natural disaster, your data is automatically backed up in the cloud.

WHAT ARE SOME OF THE STEPS INVOLVED IN WORKING WITH AN OUTSOURCED BOOKKEEPER?

Accessibility: The RQB team will take you through the entire onboarding process starting with safely accessing your information.
Document management: RQB uses Laserfiche, an excellent platform for organizing managing and sharing documents. Once a document is imported into the program it is OCRed, which means the document is converted into an image that is not only editable but also searchable. This speeds up the process of sorting client accounting records. End-of-year reports are now written to CDs (instead of large physical files) and shipped to the client who then has a month to go over the numbers with their CPA.
Communication: If a client in California has a specific question about an item they see in QuickBooks, in a matter of seconds, an RQB staff member can remotely access their connection and walk the client through any questions that may arise. This gives the feel of an in-house bookkeeper, but at a fraction of the cost.

NEXT STEPS

Ready to leverage our scalability so that you can save the time, cost and hassle of hiring in-house to manage your bookkeeping needs? Then contact the cloud bookkeeping team at RQB for a free demo today.