Should you, as a startup or established business, outsource bookkeeping?
It primarily appears as a question of simple math—weighing the costs of in-house bookkeeping against hiring an external firm. It is certainly an essential business decision to cut down payroll expenses when outsourcing proves to be less expensive. However, there are also other factors that weighin.
Let’s begin with the obvious. Depending upon the business’s size, there needs to be at least one bookkeeping lead with respectable experience overseeing the subordinates. This could mean considerable expenses considering indirect benefits, and as the business scales up, the team’s size impacts the finances. Such a situation, along with being cost-intensive, would consume the precious man-hours that could be spent on core business activities.
In contrast, an adroit external firm offering cost-effective, bespoke bookkeeping would have the right resources to precisely suit the requirements. It could easily scramble them into action to ensure the continuity of operations. It could also provide flexible pricing models based on varying requirements.
Additionally, a hired firm would employ mid-level accountants to superintend the accuracy of regular bookkeeping activities. Such activities would include recording transactions, payroll, invoices, petty cash, statutory reports and others, along with deft handling of VAT. They would also be experienced in particular lines of business, and expensive to hire internally by smaller firms.
With maintaining records on paper almost obsolete, bookkeeping software—most of which is cloud-based—rule the roost. This again means more expenditure on buying and renewing the software application licenses and training the staff. The outsourced firms would have all the necessary licenses for the software and also have partnerships with the vending companies. They would also have an army of workers trained in the software.
A LIGHTER HR
An in-house bookkeeping team would also be intensive on HR activities in many ways. Bookkeepers’ qualifications, apart from mandated certifications, are not required to be of a higher level. Retaining such staff on payroll often proves to be a task, as they easily tend to switch to options with higher benefits. Juggling with volatile resources in such a situation could prove costly.
Hiring resources trained inbookkeeping software, and failure to retain those who have been given training, is an avoidable complication. The costs of hiring or outsourcing trainers for untrained resources can also be saved.
RELIABLE EXPERTISE & EFFICIENCY
The outsourced firm would have years of professional expertise and experience to its advantage. They would be reliable in terms of scaling capabilities, quality and efficiency in bookkeeping. The outsourced team could work on-premises or remotely, which lends valuable flexibility depending on individual circumstances.
Another major advantage of outsourcing bookkeeping would be compliance with the legal regulations and norms of HMRC in the UK.This compliance could prove to be complex. Governmental policies and regulations, especially concerning VAT returns, keep changing from time to time.Interpreting them properly to be compliant to a T is something best left to the experts.
In all, a robustbookkeeping firm, preparing error-free periodical financial statements, would lend more probity to accounting and auditing.They would operate with a quicker turnaround time, and help leverage the ease of doing business. To add value, an outsourced firm could throw in basic analyses and insights into business processes to improve decision-making and profitability.
Smartaxaccountancy Limited is a top-rated, cost-effective and reliable bookkeeping and accountancy firm based in Uxbridge, London. Reach us at https://smartaxaccountancy.co.uk/ for the most satisfactory bookkeeping services at great prices.