What It’s Like Working With an Outsourced Bookkeeper
Written by Bindi Gethen
You’ve built your business from the ground up, and every decision, every detail has been under your watchful eye. It’s completely understandable if entrusting your financial books to an external party seems downright daunting. It’s a repository of your journey,
The idea of handing over this vital aspect to someone you’ve never met in person, who isn’t ingrained in your daily operations, might feel like a leap of faith. But it’s about time that you understand the balance between control and delegation. This leap could mean the difference for greater growth and focus for you and your business.
So how does outsourced bookkeeping work? You hire an external service to manage your financial records. They handle tasks like categorising transactions, reconciling bank statements, and preparing financial reports. You share your financial data with them, usually through secure, cloud-based platforms. They provide regular financial updates and make tax preparation easier, so you can concentrate on other aspects of your business.
How does outsourced bookkeeping work?
In a nutshell…
An outsourced bookkeeper is like having a virtual assistant for your financial records. Businesses, especially smaller ones or startups, often outsource their bookkeeping to save time and money.
Here’s how it works: Instead of hiring a full-time bookkeeper, you hire a company or a professional externally. This person or team isn’t on-site but works remotely. They use software and digital tools to access your financial data. So you send them all your invoices, receipts, and other financial documents, often digitally.
They handle all the usual bookkeeping stuff – recording transactions, managing accounts receivable and payable, reconciling bank statements, and sometimes even preparing financial statements.
You can choose how often they work for you, be it daily, weekly, or monthly, depending on your business needs. They’ll send you updates that enable you to make decisions on whether you’re making bank or need to tighten the belt.
Arguably the best part is that when tax season hits – you’re golden. Your books are neat and ready, so no last-minute panic.
But, like anything, it has its downsides. You need to have a level of trust, as they’re handling sensitive financial information. Also, communication is key since they’re not physically present. Be clear about mutual expectations and deadlines.
Virtual bookkeepers are a great option for business owners looking to streamline their financial processes without the commitment of hiring a full-time employee.
Related articles:
How Small Businesses Can Avoid Bookkeeping Mistakes
Why Choose a Bookkeeper Over an Accountant?
Step-by-step of working with a virtual bookkeeper
1. Identify your needs
Start by figuring out what exactly you need from a bookkeeper. Do you need help with invoicing, payroll, built-in tax compliance guarantee, or all of the above? Consider the size of your business, the volume of transactions, and any industry-specific requirements. This step helps you clarify what type of bookkeeper will best suit your business.
2. Find the bookkeeper you love
Start by looking for bookkeepers with expertise and specialisations in your industry. You can search online platforms, ask for referrals from other business owners, or consult professional networks. When you find potential candidates, check their qualifications, experience, and reviews from previous clients.
Conduct interviews to gauge their communication skills and compatibility with your work style. Remember, a good bookkeeper is not just about numbers; they should also understand your business goals.
Pro tip
Look for a virtual bookkeeper who not only has the technical skills but also is someone you can trust and communicate with easily.
3. Set up communication channels and expectations
Once you choose a provider, there’s usually a set up phase.
Decide on the primary mode of communication. Will it be through email, phone calls, or a project management tool?
Establish response time expectations and decide on regular meeting schedules. Discuss and agree on deadlines for monthly financial statements, tax submissions, and other important dates. This step helps avoid misunderstandings.
Pro tip
It’s often a good idea to start with a trial period to see how well the service fits with your business before committing long-term.
4. Share financial information
Your bookkeeper will need access to your financial data. This includes bank and credit card statements, receipts, invoices, payroll data, and tax records. Ensure you have a secure method of sharing this information, like encrypted emails or secure cloud storage. Discuss confidentiality agreements to protect your data.
5. Get familiar with bookkeeping software
Most virtual bookkeepers use digital tools like QuickBooks and Xero. It’s beneficial if you understand the basics of the bookkeeping software they use. This knowledge allows you to check your financials independently, make informed decisions, and collaborate more effectively with your bookkeeper.
Pro tip
Basic familiarity will go a long way.
6. Schedule regular meetings
Regular meetings keep you and your bookkeeper aligned. These can be weekly, monthly, or quarterly, depending on the nature of your business and financial activities. Use these meetings to review financial statements, discuss any discrepancies, plan for upcoming expenses, and strategise for financial growth.
7. Make adjustments as your business grows or changes
This is a critical ongoing step. Best believe that once you’re thinking about scalability, your bookkeeping needs will likely change real soon.
Keep your virtual bookkeeper informed about significant changes in your business, like launching new products, changing suppliers, or adjusting business models. They have to be in the loop or else your books won’t reflect the evolving state of your brand.
Your financial goals and priorities might also shift as your business grows. It’s important to revisit and update these with your bookkeeper to ensure your financial strategies and reporting are aligned with your current objectives.
Related articles:
7 Questions You Should Ask a Bookkeeper Before You Hire
Why Good Bookkeepers Are Irreplaceable
Frequently Asked Questions
In summary, it’s all about finding a service that matches your specific needs, falls within your budget, and works well with your business style. Don’t rush the decision – take your time to research and choose the right partner.
Generally, there are four types of outsourced bookkeeping services. First, independent bookkeepers provide more personalised attention and can be more flexible in terms of services offered. However, they might not have access to a lot of resources and have limited availability during peak times.
Second, bookkeeping firms are more likely to be available and responsive. They may also be more extensive.
Third, Certified Public Accountants (CPAs) can offer more than just bookkeeping – like tax preparation and financial advising – but might not be necessary if your accounting needs are relatively simple.
Fourth, you might consider the cost of services of offshore bookkeepers, although some issues you may run into are time zone schedules, language barriers, and cultural differences.
When you outsource your bookkeeping, it’s like handing over the chore of organising your crazy pile of receipts and invoices to someone who actually enjoys doing it.
Ultimately, it saves you a ton of time. Imagine not having to spend your evenings or weekends trying to figure out where every penny went. Instead, you could focus on the fun parts of running your business or, you know, actually have a life outside of work.
One of the biggest advantages is cost savings. With a virtual bookkeeper, you typically pay only for the time they work or for specific services, which is often more budget-friendly than hiring a full-time employee. Plus, you save on overhead costs like office space, equipment, and benefits.
You’re also free to concentrate on growing your business. Instead of spending time on the nitty-gritty of financial record-keeping, you can focus on strategy, marketing, product development, and other core activities.
Work with the best bookkeeping agency in Australia
You wouldn’t want to hand over such a critical aspect of your business to someone with a less than stellar reputation.
Word of advice: Trust your gut. As an entrepreneur, your gut instincts are often built from years of experience and they rarely lead you astray. If something doesn’t feel right, it’s probably worth your time to delve deeper. Maybe it’s a lack of transparency, some red flags or perhaps their promises seem too good to be true. Or it could be just an unexplainable feeling you get when you’re in discussions with them.
Allow us to make this research phase easier for you. As you explore The Bookkeeping Studio’s website, you’ll start to understand why hundreds of business owners across Australia trust us with their books. See if you feel confident and comfortable working with us today.
Hey, my name’s Bindi Gethen! I’m the founder of The Bookkeeping Studio in Australia. With over 15 years of experience in the industry, I have a deep understanding of the challenges that small and medium-sized business owners face when it comes to managing their finances.
I am passionate about empowering my clients with the financial information they need to succeed. My team and I pride ourselves on our commitment to exceptional value, accuracy, and confidentiality. Our virtual bookkeeping services include payroll, budgets, and management reporting, among others.
Not to toot our own horn, but we can assure you that you won’t find a bookkeeping partner like us anywhere else in the Southern Highlands.
