Odds are that you are not running an accounting firm. Still, earning revenue guarantees the need for proper bookkeeping, and that means your business has a decision to make.
Should you handle all your accounting in-house or should you outsource it to a brokerage? Here are a few pros and cons of both solutions.
Should Small Businesses Outsource Their Accounting Duties?
Cheaper is Better
By choosing to handle your own financial records, you save a significant amount of money that would otherwise go to an outside business. Hiring a part-time or salaried employee ensures that when any discrepancy occurs, you know exactly who is responsible for correcting the irregularity. In this way, you also control the amount of resources directed toward bookkeeping. Free software such as Evernote can be a big help in managing your own finances.
The Fall Guy
There is no third-party to blame if such a financial issue transpires. When you hire a firm specifically to handle your accounting needs, they accept responsibility for any issues that arise. Having a fall guy is a positive in some instances. Such organizations also have even more to lose than you if something goes wrong. Their reputation takes a hit if they mess up your books.
Power to Your People
Most people who become successful in business share the same trait. They are natural leaders, capable of making the right decisions at the right times. Since their decision-making skills have helped them build empires, giving up any amount of power to a group of strangers may be a tough decision to make.
Running a company is extremely difficult even in the best of circumstances. Anything that distracts you from managing your daily tasks is a risk. In dealing with your personal finances, you have probably learned that money concerns are disruptive. Imagine how intense the same situation is when your entire business is on the line. Outsourcing allows you to maintain focus on the tasks that determine the overall success of your small business.
Bookkeeping has a scary reputation for requiring a great amount of effort. The truth in the digital era is that many quality software products such as Sage exist. Such programs are user-friendly and need only a limited amount of interaction to update and perfect your bookkeeping. These products are easy to use and take all the guesswork out of the process. Best of all, purchasing quality accounting software products such as Sage requires only a modest expenditure. After that, you can process all of your financial needs yourself or assign them to someone else within the company.
Wasted Time Clock
When you outsource, the only additional consideration occurs when you write checks to the bookkeeper. If you choose to buy an accounting software product, you have to spend man-hours performing the financial data entry tasks. Some enterprises consider this behavior a waste of resources.
In comparing the positives and the negatives of in-house bookkeeping versus outsourcing, there is an obvious choice. Yes, the moderate expenditure of company resources on accounting is a concern and having a professional fall guy if mistakes occur is nice. Still, the advantages of in-house bookkeeping vastly outweigh the disadvantages. With powerful software available at an affordable price, keeping track of your own finances has never been easier.