5 Benefits of Outsourced Accounting

Outsourced accounting is a great resource for small-business owners who want to move bookkeeping off their plates for good.

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Being a business owner is hard enough as it is. You're already juggling customers, clients, inventory, marketing, and hiring—so if you don't have the time, energy, or know-how to tackle bookkeeping and accounting on top of all that, who could blame you?

Luckily, you don't have to deal with accounting by yourself. By outsourcing your small-business bookkeeping, you can focus on what you do best—running a business you love—and save yourself the anxiety that comes with juggling finances. 

Below, we explore five crucial ways outsourced accounting can help you keep your books in order and give you essential peace of mind.

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What is outsourced accounting?

Before we dive into the benefits of outsourcing your accounting to a financial team, let's cover what exactly outsourced accounting is. 

An outsourced accounting firm tackles the typical tasks an in-house accounting team would perform for you. These accounting tasks can include: 

Not every business owner needs every one of these services. (For instance, if you don't have any employees, you obviously don't need payroll services.) But you can often tailor virtual bookkeeping and accounting services to your needs.

And no matter what, working with an outsourced accounting service is almost always more affordable than hiring an in-house team.

1. Save money

In-house employees are great, but they're also expensive. Along with paying their salary, paying for an in-house accounting team also means paying for their benefits, equipment, and office space. Plus, while larger, more complex businesses often need in-house HR and accounting teams, these teams aren't always financially practical for small and midsize businesses.

With an outsourced accounting company, you're only paying for their financial services—nothing more. Some accounting companies even charge by the hour, which helps you stick to a strict budget and ensures you don't get stuck in a lengthy contract that keeps you from hiring your own full-time employee. 

2. Save time

When you're doing accounting by hand, you have to budget time (preferably at the end of each day, but at least once a week) to make sure your books are balanced. You should also do a deeper dive into your finances at the end of the month to ensure you've reconciled your accounts and are on track to meet your financial goals. 

If making time for these tasks in your packed schedule sounds somewhere between unbearable and impossible, you could definitely benefit from outsourced accounting services. Bona fide accountants are fully capable of setting (and adhering to) strict financial deadlines.

Along with scheduling set times to update your books, accounting teams will send out crucial financial statements (like income statements and balance sheets) on a neat schedule so you don't have to worry about generating those reports yourself.

3. Avoid critical financial mistakes

When it comes to small-business bookkeeping, the stakes are undeniably high. Recording a transaction incorrectly, failing to list an expense under the right tax category, and missing a tax-filing deadline all have huge negative repercussions for your livelihood—up to and including putting your company out of business.

Unlike the average non-accountant business owner, an outsourced accounting department has the time, resources, money, and training to focus solely on your business's finances. Working with the professionals lowers your risk of making a crucial bookkeeping error that sinks your business for good. 

It's also worth remembering that as a business owner, you're responsible not just for your business's success but also for your employees' ability to put food on their own tables. An outsourced accounting solution helps you avoid payroll mistakes that can negatively impact your employees' lives—which means outsourcing can give them just as much peace of mind as it gives you.

Find Your Money—and Keep More of It

With plans starting at $15 a month, FreshBooks is well-suited for freelancers, solopreneurs, and small-business owners alike.

  • Track time and expenses
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4. Take advantage of expert insights

It's entirely possible to track your own finances, generate financial statements, and do your best to interpret the results. But nothing beats the insights you'll get from a true financial expert.

Accountants are used to creating the most crucial financial documents for businesses, such as profit and loss statements, cash flow statements, and balance sheets. Not only that, but they can help you interpret the results so you can make wise financial decisions for your business's future.

5. Reduce tax season stress

Filing taxes as a small-business owner is even more complicated than filing as a private citizen. Along with filing end-of-year taxes, business owners also need to file quarterly taxes, fill out a slew of additional tax forms, and correctly categorize expenses to take advantage of tax write-offs

Business owners also need to stay on top of multiple tax deadlines, and missing just one filing deadline can have devastating consequences. While accounting software from QuickBooks Online and other providers can help you file taxes and send you tax deadline reminders, nothing beats the help you'll get from a dedicated accounting team.

Along with keeping you on track to file taxes on time, most outsourced accounting advisory services offer tax preparation services, which means preparing your tax paperwork and filing taxes for you.

Again, it's possible to file business taxes on your own—but we don't recommend it (especially your first few years in business). Even if you don't work with an accountant during any other time of the year, we strongly recommend meeting with a financial professional when tax time rolls around. Remember, working with tax professionals saves you not just time but also the extra stress many business owners find themselves under when dealing with the IRS.

Find accounting software that meets your needs

If your business isn't quite big enough to need an outsourced accounting firm, accounting software can streamline your bookkeeping processes and help minimize your risk of errors. Not sure which accounting tools will work best for you? Enter some basic information about your business's financial needs and we'll send you up to five personalized accounting software quotes.

The takeaway

Outsourcing your accounting operations is an excellent way to save time, money, and (perhaps most importantly) stress. Instead of worrying about how you'll fit bookkeeping into your day while remembering to file taxes on time and triple-checking documents to ensure they're mistake-free, you can focus on doing what you do best: running the best business you can.

Looking for a more affordable accounting solution? Free accounting software can help you navigate bookkeeping basics without requiring you to spend a cent.

Related reading

Kylie McQuarrie
Written by
Kylie McQuarrie
Former Business.org staff writer Kylie McQuarrie has been writing for and about small businesses since 2014. Her work has been featured on SCORE.org, G2, and Fairygodboss, among others. She's worked closely with small-business owners in every industry—from freelance writing to real-estate startups—which has given her a front-row look at small-business owners' struggles, frustrations, and successes.
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