Most every business goes through phases as they grow from a start-up to an established enterprise. One thing that any company can benefit from regardless of how long they’ve been in business is outsourcing their accounting & bookkeeping services. Generally speaking, bookkeeping refers to the actual recording of financial transactions into a manually prepared system or, more commonly, software designed for this purpose. Accounting refers to taking that data and compiling it into useful reports to make business decisions from and prepare tax documents from. As a business, you can outsource both accounting & bookkeeping services or do the latter in-house and work with an accountant to do the other.
A startup might look at outsourcing accounting & bookkeeping to free up their time to focus on getting the company noticed and begin the task of capturing market share. It is wise to put the financial end of things into the hands of a professional so that you can get solid, reliable financial statements that can aid in making those critical initial business decisions. Until you reach the magic number in terms of sales and success to hire an in-house bookkeeper and later an accounting department, it makes sense to continue outsourcing your accounting & bookkeeping.
Even after you’ve grown to the point where you could have an accounting department, you could still find it more affordable to outsource when you consider all the labor costs and having sufficient space for a team to work in. You might eventually bring your accounting & bookkeeping inhouse, but be sure to take the time to analyze the costs involved.
