4 Business Benefits of Hiring a Third-Party Bookkeeping Service
Many business owners believe that maintaining the books for their own business is the most cost-effective and logical option when it comes to business bookkeeping. After all, if you believe you can handle it reasonably well, why hire someone else to do it? However, though you may have the financial skills and basic knowhow to maintain your company’s books, there are several distinct advantages to hiring a professional, third-party bookkeeping service to take care of your business’s books for you. Here are just 4 of them that you should consider if you’re making the decision regarding how to maintain your company’s books.
As any good businessperson knows, every decision you make comes with an opportunity cost; this refers to the things that you will be unable to do, or the opportunities you will be unable to take, based on the decision you made. So, while DIY bookkeeping might seem to have a $0 price tag on it, you have to consider the amount of time that you’ll be spending on keeping the books yourself. After all, as the popular business saying goes, “Time is money.”
For every hour you spend balancing your books, you will be missing out on opportunities to work on other aspects of your business. And while bookkeeping is a vital part of keeping any company up and running, it is merely a necessary factor in maintaining the current status quo; bookkeeping will almost never bring you new business, improve your products, or otherwise grow your company.
However, if someone else is taking care of the books for you, you can spend your time on efforts that will improve and expand your business, such as client acquisition, product development, and other endeavors.
You are an expert in your field—but you’re probably not an expert at bookkeeping. Though most business owners are financially savvy, and they’re quite skilled at Excel and even QuickBooks, they simply don’t have the same level of knowledge as a full-time, professional bookkeeper. Our bookkeepers are constantly updating their knowledge and training to stay up to date on advancements in bookkeeping software and processes; and, their level of education and training allows them to ensure a greater accuracy than you can achieve on your own.
Additionally, as a business owner, you have a lot of different tasks that demand your attention. Because your efforts must constantly be divided among various tasks to keep your business running, it’s easy to overlook small details. But in bookkeeping, tiny mistakes can lead to big consequences. A third-party bookkeeper is solely dedicated to maintaining accurate books for businesses like yours, making the odds of a mistake far less likely.
Another extremely important reason to hire a third-bookkeeping service is to gain legal protection for you, your company, and any business partners that you may have. As we mentioned, a small mistake in your books can lead to some major consequences; one of those potential consequences could be legal action, if someone believes the incorrect bookkeeping was intentional.
If you’re maintaining your books yourself, you open yourself up to some serious and somewhat frightening circumstances. Because there is no system of checks and balances in place regarding your business books, it becomes very difficult to prove that you simply made an error, rather than intentionally misreporting your company’s earnings. This could lead to charges and fines from the IRS, legal action from partners and investors, and other consequences depending on the exact circumstances. At the very least, you risk compromising the trust of your partners, clients, and investors, which can seriously harm your business.
However, if your books are handled by an outside bookkeeper, conflicts of interest are eliminated. It becomes much easier to handle the mistake, rather than falling under scrutiny for it. And of course, when you work with our professional bookkeepers, an error is much less likely to ever occur in the first place.
At this point, you might be thinking that an in-house bookkeeper would offer all of the above benefits as well, so why work with a third-party service? In reality, the vast majority of businesses in the United States don’t have the demand for a full-time, in-house bookkeeper, so hiring one is not an efficient use of your company’s funding.
Not only do you have to consider the employee’s salary, but you also have to think about the cost of the equipment they’ll use, their insurance and other benefits, and other costs associated with having an employee on-site—all for what will likely be only a few hours of work a week. Even if you hire a part-time employee, though the salary will be reduced, those kinds of costs can still add up quickly.
With a third-party service, you get only the service that you need, and you don’t have to worry about providing equipment, software, or any employee benefits. If you’d like to learn more about our professional business bookkeeping services, contact us today.