Bookkeeping and accounts
The benefits of outsourced bookkeeping
Outsourced bookkeeping can save you time, money, and stress. Learn how to find the right service for your business and enjoy the benefits of outsourcing.
Bookkeeping is an essential business activity. It helps to:
- Keep track of your business’s income and expenses, which is necessary for tax purposes and for making informed decisions. Numbers drive you and your business
- Monitor the performance and profitability of your business, which you need to do to evaluate your brand’s strengths and weaknesses
- Maintain the accuracy and integrity of your financial records to comply with legal rules.
However, doing all your bookkeeping in-house can be challenging. That’s where outsourced bookkeeping can help. This post explains what it is, the benefits, and why you should consider handing it over to professionals.
What is bookkeeping?
Bookkeeping involves recording and organising the financial transactions of your business. Accountants keep track of various metrics, such as income, expenses, assets, liabilities, and cash available.
Bookkeeping is essential for businesses looking to create accurate financial records, tax statements and budgets. It also lets you meet statutory requirements, reducing the risk of fines and HMRC audits.
Outsourced bookkeeping means getting someone else to do your bookkeeping for you. Professionals handle the accounting and financial tasks on your behalf, calculating your accounts manually or using professional software.
What are the benefits of outsourced bookkeeping?
Outsourcing your bookkeeping can generate numerous benefits for your business.
It reduces costs
One of the benefits of outsourcing bookkeeping is that it reduces costs. Hiring, training, and maintaining an in-house bookkeeper can cost five figures or more annually, while outsourcing is often substantially less expensive. Furthermore, outsourcing often means you don’t need to purchase accounting software or pay subscriptions.
It saves time
Outsourced bookkeeping can also free up your time and resources, helping employees to focus on their core competencies and strategic goals.
Every year, Limited Companies and Limited Liability Partnerships must submit financial statements to Companies House. They are also required to submit tax returns to HMRC. Additionally, unincorporated entities or sole practitioners may be required to submit tax returns to HMRC. However, this process is complex and requires a detailed understanding of accounting. Some business owners can waste days filling in online forms, losing time that could be spent driving their business forward.
By contrast, trained accountants understand the procedure in depth. This means that they can complete tax returns and financial statements quickly, saving you the hassle.
It improves quality
Outsourcing bookkeeping may also improve the quality of your accounts. Qualified and experienced professionals have the knowledge and skills to handle complex and changing accounting standards, helping your business to remain compliant.
Outsourced bookkeeping may also be more accurate and reliable. Auditors, investors and executives may find comparing accounts from different years easier, helping you gain valuable insights into your financial situation.
Outsourced bookkeeping can also include the provision of management accounts and financial Key Performance Indicators. Management accounts present a current picture of how a business is performing. These are prepared in line with UK accounting principles so that the business principals can make educated decisions about the company, with relevant KPIs to support these.
It’s more scalable
A final benefit of outsourced accounting is its scalability. Handing bookkeeping responsibilities to external agencies makes it easier to scale your operations and get the services you need, when you need them.
For example, as a bookkeeper and/or management accountant, Gerald Edelman can also provide businesses with access to tax and VAT experts, corporate finance specialists, payroll managers and business growth advisers, meaning as your business grows, we can connect you with the people you need. As such, outsourcing bookkeeping is also a strategic move for small and medium-sized entities looking to expand across more locations and jurisdictions. As an accountancy practice established for over 70 years, we have the experience to support businesses, regardless of their size.
Outsourcing can also help you benefit from a greater variety of services. These include:
- Managing day-to-day accounts
- Preparing tax returns
- Organising payroll and ensuring proper pay and benefits tax calculations
- Managing foreign currency transactions
- Sending out invoices and maintaining accounts receivable
When should you outsource your bookkeeping?
Primarily, it comes down to your circumstances. For many business owners and leaders, internal bookkeeping is a hassle and a significant source of stress.
It could be time for you to outsource your bookkeeping if:
- You are spending too much time on it and neglecting other aspects of your business, such as marketing, product development, and sales.
- You are unfamiliar with tax laws, accounting rules, regulations, or bookkeeping software. Failure to understand these aspects of business accounting could result in missing Companies House or HMRC deadlines or failing to comply with reporting standards.
- Consequently, you might have to pay fines and penalties and submit to audits.
- Your business is growing and you need more comprehensive financial reports and support. Reporting requirements often become more complex as companies grow.
In summary, outsourced bookkeeping offers a host of benefits compared to doing it in-house. It’s cheaper and saves you time, and the quality is often higher. Plus, if you have a growing business, you can scale faster.
Most small to medium-sized businesses choose to outsource their accounting for these reasons.
If you’re ready to outsource your bookkeeping, get in touch with one of our team. You can contact Gerald Edelman by filling out a form or calling +44 (0)20 7299 1400.