Breaking Misconceptions About Outsourcing Bookkeeping

One of the most underrated responsibilities in any business is bookkeeping. While accounting garners a great deal of respect, bookkeeping is often taken lightly, although it is the most crucial prerequisite for accurate accounting.

Just like the misconception that bookkeeping is easy and menial, the concept of outsourcing bookkeeping tasks is also surrounded by many misconceptions and assumptions. It’s time to clear the air and correctly understand how outsourcing bookkeeping can actually be used to benefit your small business.

5 Common Misconceptions About Outsourcing Bookkeeping Decoded

Bookkeeping is neither quick nor straightforward. It takes a tremendous amount of care, caution, and time to meticulously record, organize, and store business financial data. Many small business owners often attempt to handle their own bookkeeping tasks. It is only when the workload becomes overwhelmingly heavy and errors begin to occur that they realize they need a specialist to handle their accounts. Even then, they are hesitant to outsource the work to an expert, thinking it will be expensive.

Here are the 5 most common misconceptions about outsourcing bookkeeping:

1. It Is Too Expensive

The sheer volume of work involved in keeping records and organizing them makes small business owners think that outsourcing bookkeeping is expensive. They assume that only big companies and corporations can afford it. However, the truth is that every business, from a booming IT corporation to a local lumber store, needs professional assistance to maintain books of accounts and file taxes accurately. And while big companies can hire experts and create an in-house team, a small business owner cannot afford to do the same. 

This is where outsourcing bookkeeping comes in – for small businesses, retailers, and freelancers who need professional help but without the added costs of employee benefits and overheads. 

And while professional help is undoubtedly more expensive than DIY bookkeeping, think of how much more costly it will prove to be, both in terms of time and money, if you make any errors or overlook compliance requirements. Outsourcing bookkeeping will not only provide you with expert assistance but also free up the time you spend doing it yourself, allowing you to invest in growth strategizing and planning.

2. I Am Happy with My Accounting Software

With free accounting software readily available online, most small businesses prefer to go the DIY route, assuming they can handle the workload without the extra costs of hiring a full-time bookkeeper. These software solutions are indeed great for automating specific bookkeeping processes and saving time. But bookkeeping is more than just recording transactions.

Accounting software is an effective tool, but it cannot give expert advice on documents required for a grant application or tax benefits. You will ultimately have to consult a specialist who has in-depth knowledge of bookkeeping practices, laws, and standards to file your taxes and manage business finances correctly. By outsourcing bookkeeping tasks to such an expert, you can save yourself from any serious accounting errors and the ensuing anxiety.

3. It Is a Security Concern

Many small businesses refrain from outsourcing bookkeeping due to fear of data leaks or security breaches. They believe that handing over all the company’s financial data is risky, as it could be leaked to competitors or scammers. 

To be fair, this concern is not completely baseless. Any business information should always be guarded most securely. However, despite all the safety measures you can implement, the threat of fraud always remains. Why would an outsider, even someone from within the company, leak or misuse information? There is no such thing as 100% guaranteed security. 

Having said that, a professional bookkeeping firm has specific security systems in place. They store all data securely in the cloud, utilizing automatic backups, end-to-end encryption, two-factor authentication, restricted access, and other standard compliance and security measures.

4. All Bookkeeping Services Are the Same

Just like every industry, every business is unique and has its own special features. Bookkeeping services catering to each of these businesses also need specialized knowledge. The bookkeeping expertise required for a healthcare business will be drastically different from that of a local restaurant business or an exporter. That is why it is essential to select your bookkeeping agency carefully. Whether you need a bookkeeper with knowledge of healthcare and insurance, or global supply chains, or just basic federal tax laws, there is an expert cloud accounting agency available, ready to cater to your specific bookkeeping needs and business objectives.

5. Outsourcing Bookkeeping Frees You from Accounting Work

Absolutely not! While outsourcing bookkeeping certainly saves a tremendous amount of time that can be dedicated to other work, it does not relieve you of all accounting responsibilities. 

Bookkeepers are skilled at managing financial data, analyzing it, and making it available to you whenever you like – but it is you who has to provide them with all your financial data in the first place. Thus, it is also your responsibility to monitor the finances of your business and ensure that the correct data is passed on to the bookkeeper. 

Remember, at the end of the day, it’s your small business. Any errors or discrepancies due to communication gaps or incomplete or inaccurate information can negatively impact your business. Hence, it is necessary to establish effective and fast communication channels with the cloud accounting agency. 

Having an expert bookkeeper by your side can prove to be more beneficial than you might think. These experts, with years of experience behind them, are adept at identifying opportunities and gaps, as well as streamlining business finances. Using this skill to your advantage can work wonders for your small business.

Contact KSSP Partners LLP in Markham for Your Bookkeeping Needs

A skilled bookkeeper can help you set up a system to record information, save receipts, and be ready with all documentation when applying for loans, grants, or tax benefits. To learn more about how KSSP Partners LLP can provide you with the best bookkeeping and cloud accounting expertise, contact us online, or by telephone at 289-554-5997.