Managing your business finances is about so much more than simply keeping track of the amount of money you make each month and the amounts you spend each month. Businesses need to keep a record of all business transactions; they need to maintain and manage their various accounts; they need to create and send out invoices to clients\/customers; and they need to prepare accurate financial reports for their business. If you are finding that these tasks are taking too much time away from your regular daily business operations, then perhaps outsourcing your bookkeeping would be beneficial to you.<\/p>\n
Businesses are able to track and maintain their day-to-day financial transactions by using professional bookkeeping services<\/a> provided by outside contractors without hiring an employee. Depending on what is outlined in the contract, services provided could include recording transaction data, balancing the account against the bank’s records, accounts payable, accounts receivable, payroll bookkeeping, and providing monthly reports.<\/p>\n Outsourced bookkeeping<\/a> is when you use the services of an independent contractor or company to handle the financial records for your business. For example, some of the tasks that would be handled include entering all transactions, monitoring how much money is spent, and reconciling bank accounts. Other duties may include processing payments from customers (accounts receivable), paying suppliers (accounts payable), keeping track of the general ledger, and creating financial reports.<\/p>\n Important points:<\/strong><\/p>\n The company pays a third-party service (or individual) for all financial accounting functions, including but not limited to accounting entries, expense tracking, bank account reconciliation, management of accounts payable\/receivable, maintenance of the General Ledger (a.k.a. Chart of Accounts), and preparation of financial reporting such as balance sheets and income statements.<\/p>\n A consulting firm located in the U.S. may utilize QuickBooks Online to monitor their money. An outside bookkeeper<\/a> will process the company’s transactions, reconcile the company’s funds, categorize the company’s expenditures, and provide the company with reports on a monthly basis. The company\u2019s owner reviews these reports and makes decisions about how to spend the company\u2019s money.<\/p>\n The range depends on the agreement. Some companies are outsourcing merely bank reconciliation or invoice processing; some are using entire accounting outsourcing services for all their periodic bookkeeping duties.<\/p>\n The primary distinction between outsourced vs. in-house bookkeeping is who does the work.<\/p>\n In-house bookkeeping is done by a person that works directly for your firm. Outsourced bookkeeping is done by an outside professional or firm under a contracted service agreement.<\/p>\nWhat Is Outsourced Bookkeeping?<\/strong><\/h2>\n
\n
What Does an Outsourced Bookkeeper Do?<\/strong><\/h2>\n
Outsourced Bookkeeping vs. In-House Bookkeeping<\/strong><\/h2>\n