Outsourcing your bookkeeping can be a game-changer for small business owners, freeing up time, reducing stress, and ensuring accurate financial records. However, the decision to hand over control to an outside provider often comes with questions and concerns. Will it really save money? Can I trust someone else with sensitive data? Will they understand the unique needs of my business?
In this blog, we’ll tackle the top 5 issues business owners face when outsourcing bookkeeping—and show you how to address them. From costs and control to communication and security, we’ll help you make an informed decision and show how the right provider can turn challenges into advantages. Let’s dive in!
1. Cost: Is Outsourcing Bookkeeping Worth It?
Many small business owners initially think they’re saving money by managing their own bookkeeping. While it might seem like a cost-effective choice on the surface, the reality is that DIY bookkeeping often ends up costing more—both financially and personally—than outsourcing to a professional. Here’s why:
Costly Errors: Without proper accounting training, business owners frequently make mistakes that lead to inaccurate financial statements. These errors can result in overpaying taxes, expensive tax amendments, and misleading financial statements.
Loss of Work-Life Balance: For many business owners, bookkeeping becomes a late-night task squeezed in after a full day of running their business. This often results in Lost Sleep and Family Time and burnout.
Lack of Timeliness: Bookkeeping is frequently postponed in favor of more pressing business tasks. When financial data isn’t updated regularly, missed insights and opportunities to take advantage of trends that could save or make money. Tax estimates are sometimes inaccurate without current data and this can result in costly underpayment penalties and interest.
When comparing options, it’s also important to consider the cost of hiring an in-house bookkeeper, which is typically the most expensive route. Not only do you have to account for salary, benefits, and payroll taxes, but you must also prepare for potential turnover. Replacing and retraining an employee can be time-consuming and disruptive, leaving your books in limbo. This can be a good fit for some businesses, however. For example, if your business uses a unique accounting system, needs someone to handle complex tasks such as job costing or managing inventory, you prefer paper-reliant processes, or are uncomfortable with cloud-based solutions.
There are also, of course, situations where a DIY approach does make the most sense. Small service-based businesses with minimal expenses and no employees may not have enough transaction volume or complexity to justify the cost of a bookkeeper.
2. Loss of Control and Personalization
One of the most common concerns business owners have about outsourcing bookkeeping is the perceived loss of control over their financial records. They might worry that a professional won’t provide the same level of detail they would if they managed the books themselves, or that the nuances of their industry won’t be understood. These are valid concerns—but they can be addressed with the right approach and perspective.
Industry-Specific Expertise Matters: By partnering with someone knowledgeable in your industry, you gain insights and strategies tailored to your business, ensuring compliance and efficiency.
Do You Really Need That Level of Detail? Some business owners fear that outsourcing will mean losing access to the granular level of detail they’re used to tracking. However, for many small businesses, hyper-detailed bookkeeping often creates unnecessary complexity and misses the bigger picture. While it might feel reassuring to manage your books in-house for control and personalization, this often leads to wasted time and effort on tasks that don’t drive growth. A skilled bookkeeping professional, especially one familiar with your industry, can provide the perfect balance of detail and strategic insight to keep your business on track.
Alternately, if your budget allows you may find that an in-house bookkeeper is the right fit for you if you do want to maintain a more complex set of books and have the time and inclination to invest in training.
3. Data Security: Protecting Your Financial Information
When outsourcing bookkeeping, one of the top concerns for small business owners is the safety of their sensitive financial data. This concern is valid, especially in an era of increasing cyber threats. However, with the right bookkeeping firm, outsourcing can actually improve your data security by leveraging established policies, procedures, and technology that many small businesses might not have in-house.
Many small businesses lack robust security measures due to budget constraints or limited technical knowledge. By outsourcing to a professional bookkeeping firm, you can benefit from advanced security measures already in place. Professional firms use purpose-built software designed with security as a top priority and stay on top of the latest security protocols.
At Balance Point, Our staff is trained on best practices for data handling and cybersecurity, and we continually update our procedures to align with the latest security standards.
By outsourcing your bookkeeping to a firm with strong security protocols, you’re not just delegating financial tasks—you’re safeguarding your sensitive information. For many small businesses, the level of protection provided by a professional firm far exceeds what they could implement internally.
4. Time Commitment and Communication Challenges
When outsourcing bookkeeping, a common worry for small business owners is the time required to communicate with an external provider. Business owners may fear that explaining their needs, providing information, and addressing questions will take too much of their already limited time.
While these tasks do require some initial effort, the time saved by not having to manage day-to-day bookkeeping more than compensates. Additionally, a good bookkeeping provider will streamline these processes through clear communication and proactive systems.
To ensure smooth and efficient communication with an outsourced bookkeeping provider, look for firms that prioritize clear and consistent processes. For example:
Defined Points of Contact: A dedicated bookkeeper or team member should handle your account, so you always know who to reach out to with questions.
Regular Updates: Scheduled check-ins, whether monthly or quarterly, help keep you informed without constant back-and-forth emails.
Efficient Systems: Secure portals and automated workflows reduce the need for frequent manual communication while keeping everything organized.
At Balance Point, we prioritize proactive communication by setting clear expectations from the start. Our team checks in regularly, provides timely updates, and uses efficient technology to ensure minimal disruption to your day-to-day operations.
5. Overcoming Onboarding Challenges
Transitioning bookkeeping responsibilities to an external provider can feel overwhelming for small business owners. Concerns about missing information, disruptions to daily operations, or prolonged setup times often make the onboarding process seem daunting. At Balance Point, we understand these challenges and have developed a 30-day onboarding timeline with a clearly defined process to ensure a seamless transition for our clients. Our experience in onboarding clients ensures that the process is as smooth as possible. Here’s how we make it easy for you:
Defined Roles: Our team handles the heavy lifting, so you can focus on running your business while we manage the transition.
Proactive Communication: You’ll receive regular updates throughout the onboarding process, so you’re always in the loop.
Tailored Solutions: We customize workflows and processes to meet your business’s specific needs, minimizing disruptions.
While onboarding might feel like an initial time investment, it sets the foundation for a successful, stress-free partnership. Our clients find that a well-executed onboarding saves time in the long run and improves accuracy from the start.
At Balance Point, our onboarding process doesn’t just focus on transitioning your bookkeeping smoothly—it’s also an opportunity to deliver immediate value to your business. Within the first 30 days, we typically uncover key areas for improvement that can have a significant impact on your financial health. For example, we can identify compliance gaps such as missing tax filings, incomplete documentation, clean up un-resolved bookkeeping errors, and identify immediate tax savings.
These insights can result in tangible savings that offset the cost of outsourcing—and sometimes exceed it—within the first month.
In conclusion, outsourcing bookkeeping isn’t for everyone, but for many small business owners, it offers cost savings, enhanced security, and strategic insights that drive growth. Whether you’re exploring options or ready to make the leap, choosing a provider with clear communication, proven expertise, and a seamless onboarding process is key.
At Balance Point, we specialize in turning bookkeeping challenges into opportunities for success. Ready to explore if outsourcing is right for your business? Contact us today to learn more about our tailored bookkeeping solutions.
Comments