It is becoming more common for small business to outsource their bookkeeping and accounting services mostly because of cost savings and efficiency. Accurate and timely accounting is important to business success, however hiring someone to do it in-house usually requires some of the business owner’s time and involvement. Unless you are a trained financial professional you may want to focus more on running your business.
Here are some pros and cons to outsourcing:
Pro: Hiring a full employee may require benefits such as health insurance, sick days, and paid vacation. A bookkeeper requires an investment in software, computer equipment, and office space. Outsourcing will reduce your overhead costs.
Con: Less internal control. You should set up policies, procedures, reporting and a communication schedule with the outsourced company
Pro: An outsourced company is specialized and dedicated to the work they do. They keep up-to-date software programs and regulations.
Con: Your employee knows your company better. However, if your in-house employee is not familiar with accounting best practices you could lose money.
Pro: A company has a backup in case of illness, vacations, etc. You have a contract so they cannot quit.
Con: Your employee can leave anytime and unless you have a backup you may fall behind.
Having one person handling the books with limited controls or oversight, unfortunately, could result in fraud. Fraud can always occur, but a reputable bookkeeping business with internal controls and expertise in accounting best practices should put you at ease.