The Benefits of Using a Bookkeeping Service

Benefits of Using a Bookkeeping Service

There’s a difference between owning a successful business and actually running one. Even if you have huge amounts of capital and plenty of regular customers, your business won’t thrive if you don’t have effective bookkeeping skills if you intend to run the financial side of things by yourself.

Bookkeeping is an essential role that every business owner should be able to handle. If they themselves can’t handle it, it is wise for them to hire someone who is experienced in this field. There is no need to hire an accountant or in-house bookkeeper, if not desired. Most business owners will outsource their bookkeeping needs instead. Here are some of the benefits of and considerations involved with hiring an external bookkeeping service for your business.

You'll Get an Unbiased Financial Opinion

One disadvantage of hiring an internal bookkeeper is that they may become emotionally involved with the day-to-day running of your business. An external bookkeeping service has nothing to do with your business. Their goal is to give you a clear insight of your business's financial position rather than pat you on the back and tell you everything is going to be OK, even when it's not. A bookkeeping service need only do the accounting work required to keep your business up and running and show you its financial strengths and weaknesses.

Avoiding Conflict of Interest

For some businesses, like partnerships, it is risky to entrust the accounting to one of the owners.  Accusations of misconduct could potentially ruin the business relationship, even when the error was unintentional. An owner might be put in the unfortunate position of having to make a choice between what is best for themselves and what is best for the company. This isn’t to say that they wouldn’t put the business first, but others might wonder about their intentions if something should go wrong. Using an independent bookkeeping service avoids this pitfall and can boost confidence among the owners that all accounting statements are true, accurate and without bias.

You'll Lower Costs

One of the key components of running any business is keeping a firm grasp on the overall costs. A business owner's goal is to reduce the total costs of his operation, and one way to do this is to control the wages and salaries of workers — usually by employing fewer people. The salary and benefits paid to an in-house bookkeeper can be significant. A business can run without a bookkeeper on staff if the business owner — or one of the business owners — collects invoices, payments, credit sales and other pertinent financial information. They can then hand the necessary documentation over to the external bookkeeper for accounting purposes. The cost of outsourcing your accounting is typically significantly less than employing a full-time bookkeeper.

What to Look for in a Bookkeeping Service

External bookkeepers are typically individuals with relevant experience in accounting and auditing services provided to a wide variety of business types. Choose one that is well acquainted with your type of business. Look for an external bookkeeper who specializes in working with companies that are similar to yours, but don't overlook basic expertise in the process. The service should also possess excellent overall skills and the experience to determine profits, turnover, and losses among other financial ratios to help you determine the financial position of your business.

Totally Booked is a modern, easy to use bookkeeping service in NYC, get in touch today to see how we can help!