Outsourced Bookkeeping Services for Startups | Graphite Financial

Accounting & Finance,

For Startups

Download our Free Financial Model Template

Outsourced Bookkeeping Services:

Everything You Need to Know

Josh Leider

Josh Leider - Head of Growth

March 29, 2024

To outsource or bring bookkeeping in-house? It’s a dilemma for many business owners, especially small businesses or startups. But you might be surprised to learn that more companies are outsourcing these duties – and there are many reasons why.

In this post, we’ll explain everything you need to know about outsourced bookkeeping to help you determine if it makes sense for your business.

What is Outsourced Bookkeeping?

Let’s start by discussing just what outsourced bookkeeping is and how it differs from any bookkeeping or accounting services that are performed in-house.

As the name implies, outsourced bookkeeping is when a company hires someone outside of its own business to handle financial transactions, prep financial statements, and everything else involved in the practice of bookkeeping. It differs from in-house bookkeeping in that a firm is working with an external provider for this service and not relying on one of its own employees to handle this task.

Why You Should Consider Outsourced Bookkeeping

There are many reasons why it makes sense for a business owner to consider outsourcing their bookkeeping and accounting operations. Here’s a look at some of the benefits of doing so:

  • It’s ideal for small or startup businesses to outsource certain tasks so that employees can better focus on the day to day operations of running and growing the business.
  • It’s often more cost-effective to outsource bookkeeping to an external partner than it is to pay an in-house bookkeeper to do this. Besides cost savings, if employees assume bookkeeping duties in addition to any other role they serve, it can limit productivity and lead to bookkeeping mistakes.
  • Outsourcing bookkeeping ensures that this task is in the hands of experts who know all the best bookkeeping software that can apply a tailored set of accounting rules correctly and accurately; something an in-house team member may not be aware of or be able to achieve efficiently. It helps ensure more than just an accurate income statement and balance sheet, but the comfort in knowing that the outsourced company has the extensive experience and tools to get the job done effectively.

When is the Right Time to Outsource Your Bookkeeping?

There’s really no bad time to look into outsourcing your bookkeeping. However, some situations may make more sense to seriously explore this possibility. For instance:

  • Outsourcing bookkeeping may make sense for startups or small businesses when it’s important to have staff focusing on the core business activities.
  • It may make sense to outsource if your business is growing and its financial situation is becoming more complex. Accurate bookkeeping is key to understanding the economics of a business and growth.
  • If you’re interested in cutting overhead costs, it may also make sense to explore outsourcing your bookkeeping. It’s often more cost-effective to outsource such services than it is to hire a full time bookkeeper.

Ultimately, the biggest value of outsourcing bookkeeping is that you can ensure this crucial service will be properly handled by an expert who has the knowledge, experience and tools to do more than just manage your finances, but offer strategic support and advice. Learn more about the value of a trusted financial partner and how to find the right fit for your business here.

Types of Outsourced Bookkeeping

 

Bookkeeping tends to be a fairly broad term, and you might be surprised at how many types of bookkeeping services are available. Here’s a look at the types of outsourced bookkeeping solutions at your disposal:

  • Basic: Basic bookkeeping consists of keeping track of any financial transactions, managing accounts payable and receivable, and more.

  • Payroll: Payroll processing does more than just ensure that any employees are properly paid, it also ensures accurate processing, manages tax withholding and helps avoid errors along the way.

  • Financial reporting: Bookkeeping may also consist of helping a startup with its financial reporting to assist any decision-making in the present and into the future as the business grows.

  • Tax preparation: It’s imperative to stay up to date with any tax laws or regulations, another crucial role that a bookkeeper can help with. Bookkeepers tasked with tax planning and preparation adhere to tax codes, determine the proper deductions and accurately prepare a business’s tax return.

Choosing a bookkeeping firm is strongly recommended for startups over hiring a freelancer or individual bookkeeper. A firm can provide comprehensive and reliable financial management that startups need. A firm like Graphite can seamlessly integrate a team of experts with the capacity to offer continuous support, ensuring your financial operations are handled with the utmost professionalism and in compliance with the latest financial regulations and standards.

Outsourced Bookkeeper Cost

As we’ve noted throughout this post, it’s often much more cost-effective to outsource your bookkeeping tasks than it is to hire someone to do it in-house. However, the cost of outsourced bookkeeping tends to vary by the scope of services performed (see the above section) and the level of expertise that you’re seeking.

So what are some tips for budgeting and managing bookkeeper costs effectively? Here’s a look at some pointers:

  • Scale up with bookkeeping as you scale up your business, especially if you’re a startup. Small businesses don’t require the same type of financial attention that larger companies do. That said, start with the basics and add on services as your operations grow. A good bookkeeper will scale with you and serve as a long-term extension of your business.

  • Remember that you can make money by spending money – and this is perhaps most true when it comes to working with a good bookkeeper, who can maximize your tax deductions and set your course on a good financial path.

  • Regularly assess and adjust as necessary. Chances are the bookkeeping services that you needed at one period are not the same that you need now. That said, make sure you’re regularly assessing and adjusting the level of bookkeeping service that you need to ensure you’re getting the most for your dollar.

Benefits of Outsourced Bookkeeping Services

We’ve already ticked off many of the benefits that can be realized from good bookkeeping – but there are more that are worth mentioning as well. Here’s a look at some of the value-added services that a good bookkeeper can provide for your business:

  • Better accuracy and compliance
  • Better financial forecasting and insights to help you make better money-related decisions.

In the next few sections, we’ll dive deeper into these additional benefits:

Streamlining Financial Processes

One of the biggest benefits of outsourcing bookkeeping is how it can help streamline financial processes. It can help automate routine tasks, reduce errors and take any guesswork out of financial management by handing such duties off to a professional accounting team that you know you can trust. On a personal level, you might work with a top CPA firm to do your income taxes. Why? Because you don’t trust yourself to do them, but you do trust professionals. Think of bookkeeping for your business in the same context.

Strategic Financial Insights

A good bookkeeper or accounting firm won’t just help keep your books up to date, but offer value-added service as well. Perhaps the most significant value-added service is providing an accurate financial picture of your business. A good bookkeeper can deliver customized reporting and analysis and help support better-informed business decisions based on this financial data. Such insights can offer a thorough, well-rounded view of your business and where it has the potential to go.

Final Thoughts

It’s easy to see the benefits of partnering with the best outsourced bookkeeping firm and why it makes sense to pursue a partner in this space, especially for small and growing businesses that need the guidance that such a service can also offer. And when you consider that businesses can likely save money by partnering with an external firm rather than bringing such services in-house, it makes the proposition of a bookkeeping partner that much more attractive. The biggest hurdle is finding the right partner that can help you meet your goals.

Graphite Financial for Outsourced Bookkeeping

If you’re serious about finding the right bookkeeping partner, contact Graphite Financial today to get in touch with a bookkeeping expert. Let us show you how we can customize our solutions and service offerings to the specific needs of your startup and how we work with you to become a true extension of business. We also offer many value-added services that go beyond the standard tasks that are involved with bookkeeping.

Contact Graphite Financial for more information today and to schedule a consultation to learn more about how we can help take your business to the next level.

Most people already know and understand the importance of having a capable CFO for the financial health of a startup. CFOs manage, track and predict the financial actions of a company. They are the leaders and decision-makers for major financial activity and strategies within an organization. In addition to their core duties, they also often provide risk management reporting and advise the CEO and the board on a business’ financial health so key decisions can be made.

Early startups typically don’t have a need or the budget for a full-time in-house CFO. Fractional CFO firms are an ideal fit and a common practice for startups to partner with. They can guide companies through various funding rounds as well as growth stages. When you work with a qualified fractional CFO firm, you can rely on them for the financial expertise your startup needs to effectively scale up operations and revenue generation without the unnecessary cost of hiring a full-time in-house CFO.