Outsourced bookkeeping is a cost-effective way to streamline your business’s financial record-keeping.
Bookkeepers play a vital role in business operations, ensuring accurate and detailed financial records. As part of the accounting team, they handle various administrative tasks, from creating balance sheets to preparing for tax season and ensuring compliance with financial regulations.
However, maintaining an in-house bookkeeping team can be quite expensive. By hiring remote, external professionals, companies can access a global pool of experts, reduce costs, and gain the flexibility they need to scale their accounting functions as they grow.
Thinking about outsourcing bookkeeping for your business? This guide offers an overview of its advantages, outlines what the process entails, and provides steps for getting started.
What Is Outsourced Bookkeeping?
Outsourced bookkeeping is the practice of delegating a business’s financial record-keeping and accounting tasks to an external service provider. Instead of managing bookkeeping in-house—an approach that can often be costly and time-consuming—companies can rely on third-party professionals to handle essential tasks such as processing daily transactions, preparing monthly financial reports, calculating payroll, and even providing strategic tax planning services.
Thanks to cloud-based accounting software and advanced communication tools, accountants and bookkeepers are now able to work remotely and operate entirely in a digital environment (yes, the days of being buried under piles of paper invoices and receipts are long gone). As a result, remote accounting services—especially remote bookkeeping—have emerged as a strategic choice for businesses of all sizes, from fast-growing startups to well-established enterprises.
As a trusted leader in outsourced bookkeeping, Solvo makes it easy for businesses to access expert talent.
Key Benefits of Outsourcing Bookkeeping
Let’s explore the key advantages of outsourcing bookkeeping services and how it can enhance your company’s operational efficiency:
Cost savings
Hiring an in-house bookkeeper requires not only paying salaries (in the U.S., the average bookkeeper salary is $44,607) but also adding benefits, training, equipment, and other employee-related expenses.
By partnering with an outsourced bookkeeping provider, businesses can achieve significant cost savings. These services provide access to a team of skilled professionals, reduce overhead costs, and allow you to pay only for the specific services you need.
Increased efficiency and accuracy
By outsourcing bookkeeping, you leverage the expertise and specialized software of professional bookkeeping services. This not only translates to lower costs on your side, but it also helps you handle complex or high-volume tasks more efficiently and accurately.
Access to expert knowledge
Bookkeepers need to be on top of the latest tax and payroll regulations, as well as industry best practices. This ensures your business stays compliant and helps you avoid costly penalties. However, staying informed can be time-consuming and require ongoing training.
By partnering with an outsourced bookkeeping service, you can benefit from the expertise of not just one but a team of professional accountants, financial analysts, and tax specialists who will keep your business compliant with evolving regulations, saving you time, money, and stress.
Scalability and flexibility
As your business expands, so do your financial needs. Relying on in-house professionals can be time-consuming, requiring several months of recruiting, hiring, and training to successfully scale your bookkeeping team.
Outsourced bookkeeping offers the flexibility to easily adjust your services to accommodate growth and adapt to changing needs.
Improved focus on core business
By trusting your accounting and record-keeping to a team of expert bookkeepers, you can empower your internal team to focus on strategic initiatives that truly move the needle for your business.
Free from the time-consuming and error-prone aspects of bookkeeping, your employees can make a more meaningful contribution to your core business.
Access to advanced software
For smaller businesses, the costs of purchasing a license for advanced accounting or bookkeeping software, with powerful analytics tools, can be too expensive.
Outsourced bookkeeping services often use cutting-edge software to automate routine tasks, reducing the risk of human errors, and ensuring your financial data is safe, accurate, and reliable.
When Is the Right Time to Outsource Bookkeeping for Your Business?
The optimal time to outsource bookkeeping depends on your specific needs and challenges. While small businesses might find it difficult to justify the cost of hiring an experienced professional, fast-growing startups can benefit from the flexibility and scalability that outsourced bookkeeping offers.
Here are some signs that your business could benefit from outsourced bookkeeping:
- Your team lacks the necessary skills or knowledge to handle complex accounting tasks or stay current with changing regulations.
- Bookkeeping has become a significant time drain, diverting resources from core business activities.
- Inconsistent or late cash flow tracking is affecting financial planning and decision-making.
- Lack of expertise is leading to missed tax deductions and savings.
- Inadequate financial reporting is hindering your ability to make informed business decisions.
- Your industry’s high transaction volume and quiet periods may result in an in-house bookkeeper being either overwhelmed or underutilized.
How Does Outsourced Bookkeeping Work?
There are different alternatives for outsourcing bookkeeping. You can either hire an independent bookkeeper or a bookkeeping service, providing access to a team of professionals for a fixed monthly fee.
Your bookkeeping team might be located in the same country as your company, or you might choose to outsource bookkeeping to a nearby country (this model is called nearshoring). Alternatively, you can opt for offshoring, where your bookkeeping team is located in a different country, often with lower labor costs.
Here’s a breakdown of the typical process you’d follow to outsource bookkeeping:
- First steps: You’ll have an initial consultation to discuss your business needs, financial goals, and the specific bookkeeping services you require with a potential outsourcing provider.
- Assessment: The provider will send you a detailed report of your business’s current financial situation, identify areas for improvement, and recommend a tailored bookkeeping solution.
- Organize your process: You’ll securely transfer your existing financial data to the outsourcing provider and set up clear access protocols for software and systems.
- Ongoing bookkeeping: The outsourced team will handle your day-to-day bookkeeping tasks, such as:
- Recording all financial transactions accurately
- Reconciling bank and credit card statements
- Preparing financial statements such as income statements, balance sheets, and cash flow statements
- Assisting with tax preparation and compliance
- Managing payroll, including calculating taxes, deductions, and benefits.
- Communication and reporting: You’ll have regular communication with your outsourced bookkeeping team to discuss financial performance, address any concerns, and ensure your needs are met. You’ll always have access to your financial data through secure online portals or other agreed-upon methods. At the end of each month, you’ll receive accurate financial reports, including balance sheets, income statements, and cash flow statements.
How Solvo Can Help You Outsource Bookkeeping
Outsourced bookkeeping offers numerous advantages for businesses of all sizes, enabling you to scale your accounting operations, reduce costs, and improve efficiency.
Solvo offers comprehensive outsourced bookkeeping solutions tailored to your business needs. We have access to global, qualified professionals with expertise in various industries and can quickly assemble a team that works exclusively for you, ensuring personalized attention and support.
Ready to take the next step? Contact Solvo today to learn more about how our outsourced bookkeeping services can benefit your business.
FAQs
How Much Does It Cost to Outsource Bookkeeping?
Outsourcing bookkeeping costs can vary depending on several factors, including the size and complexity of your business, the specific services required, and the geographic location of the outsourcing provider.
Solvo offers cost-effective, nearshoring solutions that can typically result in significant savings compared to hiring in-house professionals. On average, you can expect to save up to 60% annually when outsourcing bookkeeping to Solvo.
Why Choose Nearshoring Bookkeeping Services?
Nearshoring bookkeeping services involve hiring teams in nearby countries or regions. For example, businesses based in North America could hire talent in Latin American countries such as Colombia, Mexico, or Argentina. This offers several advantages, such as:
- Gaining access to a larger pool of specialized talent
- Saving on recruiting and overhead costs
- Compatible time zones that simplify communication and collaboration
How Does Solvo’s Outsourced Bookkeeping Process Work?
Here’s how Solvo can help businesses outsource bookkeeping:
- Sourcing. We leverage our extensive network to source bookkeeping talent based on your unique business needs and preferred time zone. We share a shortlist of the most qualified candidates for your evaluation, along with their resumes, skills test results, and insights from our recruiting team.
- Onboarding and training. Once you’ve selected your bookkeeping professionals, we help you onboard them, providing training to ensure they are fully prepared to contribute to your team.
- Account support. We provide flexible support options, including managed services if you’d like us to handle your remote workers. We always provide a Talent Replacement Guarantee to ensure you have the right talent in place.
What Is the Cost of Outsourced Bookkeeping?
Bookkeeping services are typically priced by the hour, with an average hourly rate of $21 in the US. However, some providers may offer alternative pricing models, such as fixed monthly fees or value-based pricing. The monthly cost of bookkeeping can vary, falling between $500 and $2500 depending on the volume and complexity of your financial transactions. Additional services, such as tax planning or financial reporting, can often raise bookkeeping costs.
At Solvo, we offer flexible outsourced bookkeeping rates, adapted to your unique business needs. Our pricing model is based on the number of hired employees, and you can easily scale up or down your outsourced bookkeeping services to align with changing business needs. This ensures that you always pay for the services you require, avoiding unnecessary costs.
By partnering with Solvo, companies can expect to save up to 60% annually on their bookkeeping costs.
