How and why you should outsource bookkeeping for your small business
You’ve just spent the day juggling your daily operations while also trying to squeeze in time to grow your business. With all this on your plate, it’s understandable that bookkeeping tasks often fall by the wayside.
Yet accurate financial records are crucial for understanding your business's health and compliance with tax regulations. Failure to meet deadlines or errors in financial statements can lead to penalties or prevent you from making informed decisions.
That’s where outsourcing comes in. Outsourcing connects you with experienced professionals who ensure your financial information is accurate and up-to-date. From streamlining payroll taxes to generating reliable financial reports, outsourcing offers a flexible solution for businesses looking to excel in today’s increasingly competitive market.
In this guide on outsourcing bookkeeping for small businesses, we’ll explore the benefits of outsourced bookkeeping, discuss the right time to outsource bookkeeping for your small business, and provide actionable steps to ensure a smooth transition. Whether you’re experiencing rapid business growth or simply seeking better financial management, outsourcing might be the game-changer your company needs.
Benefits of outsourcing bookkeeping for small businesses
Outsourcing bookkeeping isn’t just about cost savings—it’s about giving your business the tools and support it needs to thrive. Let’s discuss how partnering with professional bookkeeping outsourcing companies can make your life easier.
Cost savings
Hiring an in-house bookkeeper can get expensive fast. Between salaries, benefits, and training costs, it’s easy to see why outsourcing is a smart move. Did you know the average salary for a bookkeeper in the U.S. is around $45,000 a year? Add benefits and taxes, and that number climbs even higher.
Outsourcing lets you save those costs while still receiving top-quality bookkeeping services for small businesses. Plus, many providers use their own tools and tech, saving you from paying for these extras yourself.
Access to expertise
Why figure out complicated tax rules or financial regulations when you can work with someone who already knows the ropes? Outsourcing connects you with experts who stay on top of industry changes and best practices. These pros precisely handle your financial transactions, giving you peace of mind that your books are in good hands.
Increased accuracy
Let’s face it: mistakes in your financial records can be a nightmare. Whether it’s fines or missed growth opportunities, the costs add up.
You can avoid those headaches by outsourcing to professionals who focus on financial data all day. Accurate financial statements allow you to see exactly where your business stands and confidently make decisions.
Increased efficiency
Think about all the time you spend on bookkeeping. Now imagine what you could accomplish with that time back.
With outsourcing, you can focus on what truly matters—whether growing your business, connecting with customers, or launching that new product you’ve been dreaming about. Let the experts handle the routine tasks like preparing financial reports so you can focus on the bigger picture.
Scalability and flexibility
No two businesses are the same, and your bookkeeping needs can change as you grow. That’s the beauty of outsourcing—it’s flexible. Whether you need a little help or a lot, outsourced services can shift along with your business.
This means you’ll always get the right support without overcommitting your resources. This is a win-win situation, especially if your business is growing fast or navigating unpredictable markets.
When to outsource bookkeeping for your small business
How will you know when to hire a bookkeeper? For many small business owners, there are clear signs that the DIY or in-house approach isn’t cutting it anymore.
Here’s what to watch for:
Rapid business growth: If your company is scaling up quickly, your bookkeeping needs will likely be more complex. More transactions, clients, and expenses can overwhelm an in-house team—or yourself.
Complex financial transactions: Are you handling payroll taxes, vendor payments, and complicated invoicing? When financial transactions become too intricate, it’s time to bring experts who can keep things running smoothly.
Lack of in-house knowledge: If financial management feels like a guessing game, outsourcing can connect you with professionals who know their way around financial information and compliance.
Common pain points
Small businesses often hit a wall when they face challenges like:
Cash flow issues: Staying on top of cash flow is critical, but it’s also one of the most common struggles. Outsourcing ensures you have accurate financial reports to keep things balanced.
Missed tax deadlines: Tax compliance is no joke; late filings can lead to penalties. A professional bookkeeper can keep you on track.
When it becomes cost-effective
At some point, outsourcing becomes a no-brainer financially. If you’re spending more time on bookkeeping than running your business—or losing money due to errors—it’s time to make the switch.
Calculating the ROI of outsourced bookkeeping
If you’re on the fence about outsourcing, let’s talk numbers. One of the easiest ways to decide is by calculating the return on investment (ROI). Here’s how to do it:
Add up your current costs: Consider everything you’re spending on bookkeeping: salaries, benefits, software, office space—it all adds up. For example, an in-house bookkeeper might cost around $45,000 annually, plus another 20% for benefits and overhead.
Compare with outsourcing costs: Outsourced services vary depending on your needs, but on average, remote bookkeeping services cost between $3,600 and $24,000 per year. That’s a significant difference from in-house expenses.
Factor in time saved: How many hours are you or your team spending on bookkeeping tasks? Could that time be better spent on growing your business? Saving time is just as valuable as saving money.
A simple example
Here’s a quick comparison:
In-house costs: $45,000 salary + $9,000 benefits = $54,000/year
Outsourced costs: $20,000/year
Savings: $54,000 - $20,000 = $34,000 annually
Long-term benefits
Beyond cost savings, outsourcing provides small business bookkeeping help that gives you an edge in the long run:
Better financial insights: Accurate reports and actionable advice from pros.
Strategic planning: Use insights to set goals and plan for growth.
Flexibility: Adjust services up or down as your business evolves.
How to successfully transition to an outsourced bookkeeping service
Changing to an outsourced bookkeeping service can feel like a big step, but breaking it down into manageable tasks simplifies the process.
Here’s how to set yourself up for success:
Assess your needs: Identify what bookkeeping tasks you need help with. Is it simply managing daily financial records, or do you need support with payroll taxes and tax prep? Knowing exactly what you need will help you narrow down the best bookkeeping options for small businesses.
Choose the right bookkeeping service: Not all accounting firms or services are created equal. Look for providers with strong customer service, industry experience, and solid reviews. Consider their pricing structure, tools, and whether they offer tailored solutions to grow your business. A reliable service will ensure the bookkeeping cost for small businesses remains manageable.
Set clear expectations: Outline responsibilities from the start to avoid misunderstandings. Establish a communication plan and ensure your internal team and the external bookkeeper understand the process. This is one of the best bookkeeping tips for small businesses to ensure a smooth workflow.
Prepare your financial records: Before handing things over, organize your existing financial statements, invoices, and receipts. The more prepared you are, the quicker your outsourced team can get up to speed. You can provide access to your tax documents using Form 8821.
Train your bookkeeper: Every business is unique, so ensure your bookkeeper understands your specific systems, preferences, and goals. This might include onboarding them to your software or walking them through your internal processes.
Best practices for working with an outsourced bookkeeper
Outsourcing your bookkeeping can revitalize your business, but you need to build a solid working relationship to truly reap the outsourcing bookkeeping benefits. Here’s how.
Maintain open communication
Great partnerships start with clear and consistent communication. Set up regular check-ins to discuss your financial reports and address any questions or concerns. Tools like shared dashboards or email updates can help keep everyone on the same page.
Tips:
Share clear expectations from the start
Answer questions quickly to avoid delays
Schedule monthly or quarterly calls to review progress and goals
Regularly review financial reports
Just because you’ve handed over your books doesn’t mean you should stop monitoring them. Reviewing your financial reports regularly ensures you understand how your business is performing and lets you spot potential issues early.
Tips:
Set aside time each month to review reports with your bookkeeper
Focus on key metrics like cash flow, profit margins, and expense trends
Don’t hesitate to ask for clarifications—this is part of quality customer service
Provide feedback
Your bookkeeper is there to make your life easier, but they can only do their best work if you provide feedback. Let them know what’s working and where there’s room for improvement.
Tips:
Be constructive—highlight what’s going well before suggesting changes
Stay open to their recommendations; after all, they’re the experts
Keep the feedback loop ongoing to adapt as your business grows
Following these steps will maximize your outsourced accounting services and effectively address the pros and cons of outsourcing bookkeeping.
Learn more about outsourcing your bookkeeping
Outsourcing bookkeeping services can transform how you run your business. Outsourcing bookkeeping for small businesses saves time, reduces errors, and gains financial clarity for confident planning.
Let's make it happen if you’re ready to focus on growth instead of balancing books. Learn more about Archer Lewis’s bookkeeping services for small businesses and see how we can support your success.