The Pros & Cons of Outsourcing Your Bookkeeping

Often small business owners are troubled by the question of whether to hire in-house bookkeeping personnel or outsource most of the record keeping. The answer to that question must be determined individually for each business owner depending upon numerous factors. A few things to consider when deciding are:

  •   Size of business
  •   Type of business
  •   Number of employees
  •   Size of payroll
  •   Number of weekly invoices & purchase orders

Generally, if you employ 50 or fewer people, then outsourcing your bookkeeping tasks is the best answer. Once your business grows to over 50 employees, it may be time to hire in-house accounting people. There again, the type of business should be considered.

A business like this could make dozens of sales each day, and they will no doubt be ordering new products each week in order to keep the shelves stocked. When your small business generates this much paperwork, then the best idea is to stay on top of it by hiring someone to process receipts, invoices and purchase orders on a daily basis. You could easily outsource your payroll, however, if you wanted to do so. Though there are only 5 employees to pay each week, an accountant should be involved so that when it comes time to file quarterly tax reports, he or she will have all that information already in a computer program.

Small business accountants know exactly when and what to file and will save you time and money by making sure everything is done on time thus avoiding penalties from the IRS. Normally, another good reason to work with a professional accountant has to do with IRS audits. Generally speaking, small businesses who employ a qualified accountant to handle record keeping are audited far less frequently than those who don’t. Remember that the less time you spend minding the record keeping, the more time you can spend growing your business and developing new business relationships.

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