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Why SMEs Should Use an Outsourced Bookkeeping Service

The last few years have been tough for small businesses in Australia and New Zealand. One study found that 63% of small businesses in Australia were negatively affected by COVID-19. 

In New Zealand, 43% of small businesses said they either had used or planned to use government wage subsidies to survive. When times are uncertain and cash flow is less reliable, it’s more important than ever to stay on top of bookkeeping to grow your business

Asking small business owners to manage their general ledger and strategise their recovery is a tall order. If you’re running a small- to medium-size enterprise (SME), outsourced bookkeeping service help can keep you on track. 

In this article, we’ll cover everything you need to know about outsourced bookkeeping services, including: 

  • What does an outsourced bookkeeping service do?
  • How an outsourced bookkeeping service can help your SME
  • When to outsource your business bookkeeping
  • How to choose an outsource bookkeeping service

What does an outsourced bookkeeping service do? 

You may be hesitant to start looking for an outsourced bookkeeping service because you’re uncertain of the benefits. Perhaps, you’re unsure how an outsourced bookkeeper will work within your existing business processes. 

Many outsourced bookkeeping solutions handle your day-to-day bookkeeping and back-office tasks. They also provide valuable insights that help you make better business decisions.

An outsourced bookkeeping service can free up time in your back office by tackling:

1. Bookkeeping  

Visory’s outsourced bookkeeping services optimise cloud accounting software usage, with clear workflows and platform integrations to create a connected workspace for you to access. Businesses get a dedicated bookkeeping team with industry-specific experience, to take care of bank reconciliations, journal entries, financial statements, and much more. 

2. Payroll 

With Visory’s payroll services, your staff will always be paid on time. An expert will prepare pay runs for you with clear review structures and automated payments where possible, whilst making sure your business is single touch payroll compliant. As a result, you’ll cut down the time you spend on payroll and free up more time for other parts of your business. 

3. Invoices and accounts receivable

An outsourced bookkeeper also makes sure you get paid. They keep your accounts receivable (AR) updated, so you don’t wind up with bad debts. Also, a bookkeeper will put best practices in place to stay on top of your AR, including:

  • Structured payment terms
  • Automated follow-ups 

4. Bills and accounts payable

Your bookkeeper handles accounts payable to make sure you pay supplier invoices in a timely manner. Staying on top of your accounts payable helps you maintain healthy relationships with vendors. Optimising payment schedules will also improve cash flow and reduce late payment fees.

5. Financial statements 

Quarterly reports and financial statements are time-consuming but they reveal how your company is performing. As a business, you’ll use them to help make informed decisions and monitor the financial health of your company. Also, investors, banks, and partners look over financial statements, so it’s important to have accurate reports. 

Outsourced online bookkeeping services can prepare profit and loss statements, balance sheets, and cash flow reports for you.

6. Ongoing reconciliation

Visory ensures that all transactions are accurately recorded through ongoing reconciliation. An outsourced bookkeeper matches bank statements with financial records to identify discrepancies and correct errors promptly. 

7. Budgeting 

An outsourced bookkeeping service can help you create realistic budgets and track performance against them. Budgeting can help you identify areas of improvement, lower costs, and allocate resources effectively to your business.  

8. Forecasting 

Bookkeeping experts can generate financial forecasts that provide insights into future revenue and expenditure. A bookkeeper will look at past performance or historical data and use that to better predict the future. 

With forecasting, you can anticipate financial challenges and adjust strategies. For example, a short-term cash flow forecast can tell you how much money you’ll have to keep your business running or invest back into it. 

9. Customer analysis 

A bookkeeper can analyse where your biggest sales are coming from. Visory’s bookkeepers can look at sales and revenue data to identify the most valuable clients and customer segments. 

10. Prepare for tax season

You don’t want penalties after lodging your tax returns. At Visory, we ensure compliance with tax regulations, accurate record-keeping, and timely filing. So, you minimise the risk of penalties and audits and focus on growing your business with confidence. 

How an outsourced bookkeeping service can help your SME

There are many benefits that come with outsourcing your bookkeeping and other business finances. For example, Visory can run a financial health check, so you know where your business stands. 

Here are some other benefits of outsourcing bookkeeping: 

  • Save timeBookkeeping is time-consuming. Taking shortcuts for data entry and report running may lead to mistakes, and accounting mistakes can get costly. Your time is valuable—outsourcing your bookkeeping helps you focus more on running and growing your business.
  • Gain an objective view – You may be too close to your business to admit when one part isn’t working anymore. An outsourced bookkeeper may serve as a reality check by offering a new set of eyes. 
  • Get access to expertise – A company like Visory can match you with a bookkeeping team that knows your industry in and out. As you grow, an expert may be more helpful than a general bookkeeper. 
  • Save money – You may also save money on staffing when you outsource bookkeeping. You can reinvest those funds into research and development, marketing, and other company initiatives.
  • Better understand your cash flow – With an in-depth analysis of your spending, you can better manage your cash flow and stay in the black at the end of each month. 
  • Plan ahead with detailed forecasting – Bookkeeping is more than knowing what’s in your bank account. It’s also about keeping it full. Bookkeepers who are embedded in your business, even remotely, can update you regularly on your financial health. 

When to outsource your business bookkeeping

When your business grows quickly, you have more bookkeeping needs. These are a few signs that an outsource bookkeeping service is right for you

  • Bookkeeping and financial recordkeeping take more time than you can afford
  • Books are always out of date and in need of catching up
  • Your business isn’t taking full advantage of potential tax write-offs
  • You’re struggling to track your cash flow
  • Your accounts receivable and payable processes aren’t running smoothly

This isn’t an exhaustive list of signs that your business could benefit from using a bookkeeping service. Visory’s team helps businesses at all stages streamline their processes so you can stay focused on growth.

How to choose an outsource bookkeeping service

Selecting a competent and reliable outsourced bookkeeping service is key. The right provider will contribute to your company’s success and growth. Here are some qualities to look for when deciding on bookkeeping services: 

  • Qualifications – Ask if the bookkeeping service employs certified professionals with relevant accounting or bookkeeping qualifications and experience. These include CPAs or certified bookkeepers.
  • Industry expertise – Look for bookkeepers with experience in your specific industry They’ll understand the unique financial requirements and regulations that apply to your business.
  • Value – Is the cost worth the money and time you’ll save by outsourcing bookkeeping to an expert? Typically, outsourcing is more cost-effective than hiring in-house. 
  • Communication and support – Make sure the service in question offers clear channels of communication and timely assistance when you need it.
  • Integrations – Check whether the bookkeeping service integrates with your existing accounting software and other business tools, ensuring seamless data exchange and streamlined processes.
  • Flexibility – Will they be able to handle your bookkeeping and other back office needs as your business grows? As your business grows and evolves, your bookkeeping needs change.
  • Other services – What services do they offer outside of bookkeeping? For example, Visory also handles payroll. 

Outsourced bookkeeping keeps robust financial reporting affordable and reliable. Visory can match you with an expert who understands your industry and grants you 24/7 access to your double-entry bookkeeping, tax records, and more. Bookkeeping is a lot easier with a financial expert on your side.