Managing accurate financial records is essential for every small business. But keeping up with transactions, reconciliations, accounts payable, accounts receivable, payroll records, and financial reports can take valuable time away from running the business.
Outsourced bookkeeping services give small businesses access to professional bookkeeping support without the expense of maintaining a full-time, in-house bookkeeping department.
From recording daily transactions to preparing financial reports, an outsourced bookkeeping team can handle essential accounting tasks and help business owners maintain organized, up-to-date financial records.
What Are Outsourced Bookkeeping Services?
Outsourced bookkeeping services are professional bookkeeping solutions provided by an external accounting or bookkeeping company instead of an employee working directly for your business.
Depending on your needs, an outsourced bookkeeping provider may manage your financial records on a weekly, monthly, or ongoing basis.
Common services include:
- Recording income and expenses
- Bank and credit card reconciliation
- Accounts payable
- Accounts receivable
- General ledger maintenance
- Financial statement preparation
- Payroll bookkeeping
- Invoicing and payment tracking
- Expense categorization
- QuickBooks and accounting software support
- Monthly bookkeeping and reporting
- Cleanup of historical bookkeeping records
The exact services included depend on the provider and your business requirements.
What Is Included in Outsourced Bookkeeping Services?
A good bookkeeping service should provide more than simply entering transactions. It should help keep your financial records accurate, organized, and useful for making business decisions.
1. Transaction Recording
Bookkeepers categorize and record business income and expenses so your accounting system accurately reflects your financial activity.
This creates an organized record of where money is coming from and where it is being spent.
2. Bank Reconciliation
Bank reconciliation compares your accounting records with your bank statements to identify discrepancies, missing transactions, duplicate entries, or other errors.
Regular reconciliation helps keep your books accurate and current.
3. Accounts Payable
Outsourced bookkeeping may include tracking bills and vendor payments. This helps businesses maintain organized records of what they owe and when payments are due.
4. Accounts Receivable
Bookkeepers can track customer invoices, payments, and outstanding balances. Better accounts receivable management can give business owners clearer visibility into expected cash flow.
5. Financial Statements
Depending on the service package, your bookkeeping provider may prepare reports such as:
- Profit and loss statements
- Balance sheets
- Cash flow reports
- Accounts receivable reports
- Accounts payable reports
These reports can help business owners understand their financial position.
6. Payroll Bookkeeping
Some outsourced bookkeeping companies also support payroll-related bookkeeping, including recording payroll expenses and maintaining payroll-related financial records.
Payroll processing itself may be offered separately, so businesses should confirm what is included in their service agreement.
7. Bookkeeping Cleanup
Businesses sometimes have outdated, incomplete, or inconsistent accounting records.
A professional bookkeeping team can review historical transactions, reconcile accounts, correct categorization issues, and bring the books up to date.
Benefits of Outsourced Bookkeeping for Small Businesses
Outsourcing bookkeeping can provide several practical benefits for small and growing businesses.
Save Time
Business owners can spend less time entering transactions, reconciling accounts, and preparing financial reports.
Instead, they can focus on customers, employees, sales, and business growth.
Reduce Administrative Costs
Hiring a full-time bookkeeper involves more than salary. Businesses may also have costs related to payroll taxes, benefits, software, training, equipment, and employee overhead.
Outsourcing can provide bookkeeping support without maintaining a full-time internal bookkeeping position.
Access Professional Bookkeeping Support
An outsourced bookkeeping company may provide a team with experience across different industries and accounting systems.
This can be particularly useful for businesses that need ongoing bookkeeping support but do not need a full-time accounting department.
Keep Financial Records Organized
Consistent bookkeeping helps businesses maintain organized financial records throughout the year instead of waiting until tax season to address accounting problems.
Improve Financial Visibility
Current financial reports give business owners a clearer picture of revenue, expenses, profitability, and cash flow.
Better financial visibility can support more informed business planning.
Scale Services as Your Business Grows
A small business may initially need basic monthly bookkeeping. As the company grows, it may require additional support for accounts payable, accounts receivable, payroll bookkeeping, reporting, or accounting cleanup.
Outsourced bookkeeping services can often be adjusted as those needs change.
How Much Do Outsourced Bookkeeping Services Cost?
The cost of outsourced bookkeeping varies depending on the size of the business, transaction volume, complexity of the accounts, services required, and condition of the existing books.
Small businesses may pay a monthly flat fee, while other providers charge hourly rates or create customized packages.
Factors that can affect bookkeeping costs include:
- Number of monthly transactions
- Number of bank and credit card accounts
- Payroll requirements
- Accounts payable and receivable volume
- Number of employees
- Accounting software
- Industry complexity
- Historical bookkeeping cleanup
- Frequency of reporting
- Level of bookkeeping support required
For this reason, businesses should compare the services included in the monthly fee, rather than comparing price alone.
Outsourced Bookkeeping vs. In-House Bookkeeping
The right approach depends on your business size, budget, workload, and accounting requirements.
| Outsourced Bookkeeping | In-House Bookkeeping |
|---|---|
| External bookkeeping team | Internal employee |
| Flexible service options | Dedicated employee |
| Potentially lower overhead | Salary and employee benefits |
| No need for additional office equipment | Business provides equipment and workspace |
| Can scale with business needs | Capacity depends on employee |
| Professional support available | Direct day-to-day availability |
For many small businesses, outsourcing can be a practical alternative when they need professional bookkeeping but do not require a full-time employee.
When Should a Small Business Outsource Bookkeeping?
Outsourcing may make sense when:
- Bookkeeping takes too much time from the business owner
- Financial records are consistently behind
- Bank accounts are not reconciled regularly
- Tax preparation becomes difficult because records are incomplete
- The business is growing rapidly
- The company needs more accurate financial reports
- Hiring a full-time bookkeeper is not practical
- The business needs help cleaning up historical records
A business does not necessarily need to wait until its books become difficult to manage. Establishing a consistent bookkeeping process early can make financial management easier as the company grows.
How to Choose an Outsourced Bookkeeping Service
Before hiring a bookkeeping provider, ask about:
Services Included
Make sure you understand exactly what the monthly package covers and which services cost extra.
Accounting Software
Ask whether the provider works with your accounting platform, such as QuickBooks or another accounting system.
Reporting
Find out which financial reports you will receive and how frequently they will be provided.
Communication
Reliable communication is important. Know who will handle questions and how often you can expect updates.
Experience
Consider whether the provider has experience working with businesses similar to yours.
Pricing
Ask whether pricing is fixed, hourly, or based on transaction volume and complexity. Also ask about onboarding, cleanup, payroll, and other additional fees.
Why Accurate Bookkeeping Matters
Bookkeeping is the foundation of a business’s financial records.
When transactions are properly recorded, and accounts are regularly reconciled, business owners have more reliable information for reviewing profitability, monitoring expenses, managing cash flow, preparing for taxes, and planning for growth.
Outsourced bookkeeping can provide the ongoing support needed to keep those records organized without requiring a business to build a large internal accounting team.
Get Professional Outsourced Bookkeeping Support
If your business needs reliable financial recordkeeping without the cost and responsibility of maintaining a full-time bookkeeping department, outsourced bookkeeping services can provide a flexible solution.
Professional bookkeeping support can help keep your books current, organize financial records, and provide the financial information you need to run your business with greater clarity.
Whether you need monthly bookkeeping, accounting cleanup, financial reporting, or ongoing bookkeeping support, the right service can be tailored to your business’s needs. Book your free consultation today!
FAQs
1. What are outsourced bookkeeping services?
Outsourced bookkeeping services are bookkeeping tasks performed by an external accounting or bookkeeping provider. Services can include transaction recording, bank reconciliation, accounts payable, accounts receivable, financial reporting, and bookkeeping cleanup.
2. How much do outsourced bookkeeping services cost?
The cost depends on factors such as transaction volume, number of accounts, payroll requirements, accounting complexity, and services included. Many providers offer monthly packages or customized pricing.
3. Is outsourced bookkeeping good for small businesses?
Outsourced bookkeeping can be useful for small businesses that need professional financial recordkeeping but do not need or cannot justify a full-time in-house bookkeeper.
4. What does a monthly bookkeeping service include?
A monthly bookkeeping package may include transaction categorization, bank and credit card reconciliation, accounts payable and receivable tracking, and monthly financial reports. Services vary by provider.
5. Can a bookkeeper clean up old accounting records?
Yes. Many bookkeeping providers offer bookkeeping cleanup services to correct historical records, reconcile accounts, categorize transactions, and bring outdated books up to date.