Outsourced bookkeeping is the practice of delegating a business’s financial record-keeping and accounting tasks to an external service provider. An outsourced bookkeeper tracks your day-to-day business operations and takes care of essential financial statements and reports. This includes documents like balance sheets, cash flow statements, income statements, and monthly expenses. The services are the same whether you hire a local in-house bookkeeper or a freelance bookkeeper. Hiring a local or online bookkeeper is a more cost-effective solution, and you’ll get year-round support with your finances.

Did you know that 37% of small businesses outsource accounting and IT services? That’s why we created this guide to help you understand the advantages of outsourcing your monthly bookkeeping because this is one job you want to get right the first time. Bookkeepers need to be on top of the latest tax and payroll regulations, as well as industry best practices. This ensures your business stays compliant and helps you avoid costly penalties. However, staying informed can be time-consuming and require ongoing training. Outsourced bookkeeping is a cost-effective way to streamline your business’s financial record-keeping.

Understanding Outsourced Bookkeeping

On the other hand, mid-sized ones can spend a significant amount based on the features needed. Outsourced bookkeeping services often use cutting-edge software to automate routine tasks, reducing the risk of human errors, and ensuring your financial data is safe, accurate, and reliable. However, maintaining an in-house bookkeeping team can be quite expensive. By hiring remote, external professionals, companies can access a global pool of experts, reduce costs, and gain the flexibility they need to scale their what is the operating cycle accounting functions as they grow.

Step 1 – Prepare the Business for Outsourcing

1. We wouldn’t blame you if you shudder at the thought of tracking all your transactions, but if you outsource bookkeeping responsibilities, you’ll never have to worry about it.
2. First, local bookkeeping is usually done with pen and paper, while virtual bookkeeping takes this service into the digital realm.
3. If you use accrual-basis accounting, you’ll need the Growth plan, which starts at $990 a month.

In fact, the Philippines is one of the most dynamic economies in the East Asia region3, with sound economic fundamentals and a globally recognized competitive workforce. Firms and freelancers can be local or virtual, though most bookkeeping firms will opt for a virtual system over a physical one. Our intuitive and robust platforms allow you to automate HR administrative tasks and manage payroll while staying true to state and industry laws. Hence, consider your budget and determine if a free model with limited features, a subscription-based plan with tiered functionalities, or a pay-as-you-go option best aligns with your financial resources. Our platform is one of the most popular payroll software designed for small businesses. These platforms, driven by AI, can seamlessly optimize finances, streamline repetitive tasks, and prevent errors to provide accurate outcome-driven results.

Compare runner-up bookkeeping service features

Bookkeeper.com is an all-around solid pick for small to midsize businesses that might want additional payroll and tax help down the road. The virtual bookkeeping providers above might be our favorite—but if they don’t quite fit your needs, we understand completely. Here are three other online accounting service providers worth looking at. With Bookkeeper360, you’ll get a dedicated virtual accountant who sends detailed reports on a monthly basis. Prices start at $500 a month for the Essential plan, which is geared towards startups that use cash-basis accounting. If you use accrual-basis accounting, you’ll need the Growth plan, which starts at $990 a month.

Typically, there are a few signs that it’s time to leave the DIY behind and bring on a professional. Get free guides, articles, tools and calculators to help you navigate the financial side of your business with ease. The magic happens when our intuitive software and real, human support come together. Juggling invoices, tracking expenses, and generating reports can be time-consuming. Trying to sift through all the available options can be equally overwhelming.

Our team is ready to learn about your business and guide you to the right solution. This software is ideal for freelancers and small businesses seeking an intuitive platform offering expense tracking, invoicing, and project management features. Another benefit of outsourcing is that it frees you and your staff from labor-intensive bookkeeping duties. This allows you to focus on issues that can optimize your company’s growth, such as sales, marketing, customer service, and innovation—your business’s value-added activities.

And more to the point, you shouldn’t commit to a solution without thoroughly evaluating it personally, either. You never know what kind of deal breakers might only come up once you get a closer look at a given provider, so “due diligence” is the phrase to live by here. As a leading think tank, the Thomson Reuters Institute has a proud history of igniting conversation and debate among the tax and accounting.. Ask anyone who has launched a small business and they will remember how exciting the early days were.