Accurate bookkeeping is a cornerstone in business. Whether you’re running a small office or a big firm you need a good archiving tool and someone that can enter and retrieve data whenever needed in a reliable professional way. You can imagine how devastating it will be if an error occurred due to a reason such as large amounts of data or lack of revision time.

That’s why many companies now use outsourcing bookkeeping. That’s because you can have 2 in-house employees for example, one is fast but inaccurate, and the other is slow but accurate. If these are your only choices here you can get much more there! Offshoring the task can get you someone with a collection of qualities, someone who is efficient, reliable, fast and experienced in the field to do the mistakes-sensitive job, for even lower wages sometimes!

If you have a small business, you still can get a lot of benefits from getting an outsourced bookkeeper. Specially if you are growing in business, you need to focus on the strategies and outlines more than details. That’s a very good advantage of outsourcing in general as it divides tasks appropriately, so that you can focus on what you ‘really’ have to focus on and leave the other time consuming tasks to handle them as his only tasks, thus giving them all his attention.

Even those who has spent more time doing business can find themselves in a serious need for someone to manage their bookkeeping even if they don’t admit it! Some of the hyper-accurate businessmen prefer to do everything on their own, including their bookkeeping. The situation that will result after a while is that they’ll either lose their business or their minds! All the errors that occur despite of the multiple time consuming revisions can be simply avoided if they admit their need for someone for at least double checking what they made and correcting errors.

Not just the errors that will be avoided, the benefit also applies for forgetfulness. Some bank statements are mixed with spam mail or emails which are usually all-checked and deleted. Even a ‘saved’ bank statement from spam can be simply forgotten with all the daily issues and problems. Hiring someone whose job is not to forget can save you a lot of trouble.

Lack of backups is another problem for small businesses more than big ones. That’s because in a big business you know the value of each piece of data you have, so you are totally convinced to hire someone to do a routine backup every other time. But in case you have a small business you think you don’t have much to lose, just until your system crashes for the first time after you have got some important clients’ data on it! Offshoring in such case is an extra benefit, because you’ll have your backup far and safe in case a calamity happened locally!

When choosing a bookkeeper you have to put in mind experience as a huge asset (if not a requirement). You don’t want to spend your money on someone who is pretty good at data entry but at the same time is horrible in categorization! This will make the whole matter useless.

Only small business owners who are farsighted can pay attention to assigning bookkeeping to an experienced person from the start in order to focus on growing their business and have their share of competition the topping it.

So consider outsourcing your small business bookkeeping needs, and certainly it will be one of your best investments.

You probably sense a great market opportunity and want to exploit it. Being an enthusiastic entrepreneur, you decide to start your own firm. If that is you, then it is recommended that along with all the other things that you work on, try to incorporate good bookkeeping principles early in your company’s culture. This can have several benefits in the long run.

For one, good bookkeeping helps you arrange your financial information properly which aids in simpler tax calculation and hence timely filing. You pay the optimum tax and avoid delayed payment fines. It can also help you identify areas where you can claim tax breaks early allowing you to plan your expenses and investments well in advance. Bookkeeping can also identify the profits from various segments of your business and the major expenditures. These can be used to tighten the belt on outflows early where ever possible giving you a better financial foundation for greater success.

Good bookkeeping practice begins with keeping proper record of all your expenses and incomes. Remember that taxes that you pay are based on the profit (or loss) that your business makes in that financial year. This depends on your total sales and your expenses. For any small or medium sized business or even a sole trading firm, the total number of transactions over a period of a financial year can be very large. Trying to get these organized at the last moment is a tough task – more importantly doing it yourself at that time can affect your core business. If you hire a professional accountant to clean up the mess of bills and invoices, then you must be prepared to pay a fortune for the hours spent on the job. If you want to avoid such situations, maintain proper records, inculcate a good bookkeeping culture and you would be much better placed around the deadline for filing taxes. You can save lots on your accountant fees too.

So now you know that good bookkeeping is important. How, then, do you follow this process? Bookkeeping is mainly an account of your daily transactions, so try to maintain a record of all your transactions in a proper orderly fashion. The important things that you must record are:

1.    Your sales bills and invoices,
2.    Bank and credit card statements,
3.    Check book records,
4.    Relevant documents on any income from other sources like interests, salaries, etc.
5.    Employee pay slips, if you employ others

In short, each and every proof of your financial transactions is a must. It is also recommended that you maintain a day-to-day cash flow statement that would help in tallying the records. Also note that with the advent of the Internet, some or most of your records may be available in soft copies and not on paper. Ensure that you keep a record of these too.

So that’s what you need for your bookkeeping purpose. A more important thing besides collecting these records is to keep them in an organized fashion. This helps you analyze and study your company financial under various heads separately and also makes it easy to prepare your tax returns. These can accrue huge savings in accountant costs later. Given that tracking your financial records diligently and meticulously can be quite a distraction, if you were to do it yourself; many startups look to outsource this job to professional bookkeepers. They can maintain all your records in proper fashion, use the best industry practices to optimize your records and provide you professional advice from time to time. All this helps in improving the efficiency of your core business and also allows you to prepare and file your taxes punctually.

Thus, practicing a good bookkeeping culture is important for any startup. It is up to you whether you want to do it yourself or employ professional bookkeepers for this job. Depending on your situation and business model, choose what suits you the most – but maintain good bookkeeping discipline.

Maintaining a record of financial transactions is vital for every company. It helps in planning your growth, quantifying your achievements, calculating taxes and if you are a public company it is in fact mandatory to publish your financial statements. Given this importance, many companies prefer to invest in a financial division within their own company for bookkeeping, accounting and tax purposes. If you are a small or medium business, or for that matter even a larger organization, you could look at outsourcing these functions to professional outsourcing firms specializing in these domains. There are several benefits for outsourcing that you can exploit to streamline your financials and grow faster.

Bookkeeping Services: Bookkeeping related to maintaining the day-to-day transactions of the company. Typical bookkeeping functions include recording your income and expenses, documenting the assets and liabilities, maintaining daily ledgers, journals that have debit and credit transactions and other details like bank accounts, credit card statements, etc. This is a good function that can be outsourced in a profitable manner.

The outsourcing firms employ experienced professional that can maintain these records in proper manner and incorporate the latest industry best practices, giving you the best services without the associated overheads.

Accounting Services: Accounting services typically are means of summarizing your company’s monthly, quarterly, half yearly or annual performances into reports and statements prepared based on specified guidelines. These include Profit and Loss Statements, cash flow, balance sheets, financial analysis, etc. This, too, is another function that can be outsourced to professional firms with good expertise in this domain.

The biggest advantage of outsourcing such activities is the professional advice that you get on issues in your statements or some financial concern. Besides, they would also use the latest technological solutions available in the market for your accounting purposes which may be unfeasible for an individual company like yours.

Tax Preparation: Filing your taxes properly and paying them on time has obvious benefits. Irrespective of whether you are a sole trading company or one with employees and partners, the tax preparation functions are extremely important. Doing it individually or through some inexperienced person could be very risky. Unfortunately, employing a full-time professional could turn out to be too expensive. The best option in such cases is to outsource such functions.

Outsourcing ensures that your taxes get prepared in a flawless manner and you can pay your taxes on time. If you are punctual in paying your taxes you can save on the legal hassles and expenses of delayed or incorrect payment. Besides, you can also claim proper tax breaks on your expenses properly if your returns are prepared by a professional.

Thus it is clear that outsourcing the finance division activities to professional firms can be a very effective and efficient alternative. You can avoid the issues with hiring professional employees, handling attrition, spending on latest solutions and software, and most importantly bring down or even transfer the risks of incorrect records, tax filing and payments.

Every business goes through some tough patches, times when their business or their markets in general get affected adversely. In universal economic crisis like what we face today, it can be even more challenging. Typically, tough times demand tough decisions – cost cutting. Many companies would look at options where they can reduce their expenses to maintain the bottom-line. Given the limited knowledge that businessmen have about accounting and its relative importance, it could become a target of cost cutting. Some may choose to perform the accounting functions themselves or have it done in-house than give it to an accountancy firm. Others may not take such a drastic step but look at other firms offering the services at lower costs. Both make perfect sense at first, but they come with huge risks involved. Hence, one must consider all alternatives before making the decision to cut costs in accountancy aspects.

If one looks to maintain the accounts oneself, then they must be ready to dedicate time towards this activity on a regular basis. This would be a distraction from the core business functions. In the long term that can have devastating effects on the business. Besides given the inexperience, one cannot be as adept at solving accounting problems as a professional. Rectifying bad accounts could cost more than maintain them right from the beginning.

If one looks to change the accountant, there is a host of aspects one must consider before making this decision. The first one is the reason for the change. Is it solely because of cost pressures or does it also have to do with quality of service being offered? If it is the former, then one needs to be extra careful before making the switch. Accounting is an important part of any business, so don’t get narrow minded and substitute quality with cost. The decision could boomerang in the long term.

So what are the “quality” factors one needs to consider before switching accountants? For one look at all the services that your present accountant offers and compare them with what the other potential firm offers? Some aspects of the service could be very vital to you like 24 X 7 support, or regular meetings and feedback, etc. Ensure that the new firm also provides these services. If not avoid engaging with them.

Secondly, you must look at the credibility and reputation of the firm and its client base. During such tough economic times, there may be many low quality firms that would look to exploit the psyche of the businessmen. Avoid getting into any such traps. Moreover, look at their accountants and their experience. Many firms may employ under qualified and inexperienced personnel to maximize profits. Though you get services at lower rate, the accountants may not be able to solve the tougher accounting problems of your firm. This can be dangerous in the long run.

Lastly, look at the fine print and the hidden charges if any. Some firms may only advertise rates for preparing your returns and filing them. The price may not include any customer service or support, and they may charge you separately for that. In that case you may end up paying a higher price for the complete service that what you bargained for.

In conclusion, cutting costs during tough times is important and you may have to do that in business accounting. But if you decide to change your accountant, ensure that it is based on sound, rational thinking and not a narrow minded, near sighted one.